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		September 2007 Arizona's Employer Sanctions Law among the Nation's Toughest Employers that knowingly or intentionally hire unauthorized aliens face revocation of business licenses Sharon B. Shively

On July 2, 2007, Arizona Governor Janet Napolitano signed into law HB 2779, creating one of the toughest state laws yet on illegal immigration. Set to take effect January 1, 2008, the new "employer sanctions" law requires employers to verify that the people they employ are in the country legally. 

A knowing or intentional violation can result in a 10-day suspension of the employer's business licenses. A second offense can result in permanent revocation, if the offense is committed while the employer is on a three- or five-year probation for an earlier knowing or intentional hire of an unauthorized alien. "Unauthorized alien" means an alien who does not have the legal right or authorization under federal law to work in the U.S., as described in 8 United States Code section 1324a(h)(3). 

The Arizona law makes a distinction between "knowing" and "intentional" hires. "Knowingly" means actual knowledge or knowledge through notice of facts and circumstances that would lead a reasonable person, through reasonable care, to know of a certain condition. A failure to investigate suspicious circumstances can be deemed "constructive knowledge." While the more severe penalty is reserved for an "intentional" hire of an unauthorized alien (i.e., it is the employer's objective to engage in the prohibited conduct), in both cases the employer must fire the worker and sign a declaration that it has done so and will not again knowingly or intentionally hire undocumented workers. Refusal to sign the affidavit can result in varying terms of business license suspension. 

Employee verification is made using the federal government's Employment Eligibility Verification System (EEV), formerly called the Basic Pilot Program. (Employers can register for EEV at https://www.vis-dhs.com/employerregistration.) At the end of the registration process, the employer is required to sign a memorandum of understanding providing terms of agreement among the employer, the Social Security Administration (SSA), and the Department of Homeland Security (DHS). This program is designed to determine whether an individual is authorized to work in the U.S. by determining whether a Social Security number is valid. 

The Department of Homeland Security has issued new regulations to guide employers that: 

• submit a W-2 form in which the combination of name and Social Security number does not match the SSA records, and 
   

• receive a "no-match" letter from the SSA. 

The employer might also receive a "Notice of Suspect Documents" letter indicating that DHS has been unable to confirm that an immigration status document or employment authorization document used by an employee in completing an I-9 form was assigned to that person. Receipt of either of these DHS letters will result in the employer having constructive knowledge that it is employing workers that may not be authorized to work in the U.S. As noted above, this constructive knowledge may serve as a "knowing" violation of the Arizona Employer Sanctions law. 

Safe harbor. The federal rules provide a "safe harbor" process for an employer to follow to avoid the allegation that it had constructive knowledge. In the event a no-match or Notice of Suspect Documents letter is received, an employer should check internal records for clerical errors within 30 calendar days and have the employee verify or correct information within 30 calendar days. If the discrepancy is not resolved by either of these steps within 90 days, the employer can complete a new Form I-9 for the employee no later than three days following the 90-day period, using the same procedures as if the employee were newly hired. At that point, if an employer cannot resolve the discrepancy it should terminate the employee or risk sanctions for violating federal law if it is later shown that the employee is in fact not authorized to work in the U.S. 

In Arizona, proof of verifying the employment authorization of an employee through the EEV creates a rebuttable presumption that an employer did not intentionally or knowingly employ an unauthorized alien. Moreover, an employer that establishes it has complied in good faith with the requirements of federal law I-9 requirements establishes an affirmative defense that the employer did not intentionally or knowingly employ an unauthorized alien. 

Legal challenges. The future of both the state law and federal rule is difficult to predict. On August 31, 2007, a federal district court judge granted a nationwide temporary restraining order placing a hold on the new Social Security no-match regulations, which were to take effect on September 14, 2007. The ruling also puts a hold on the federal government's plan to start sending out no-match letters. The order is scheduled to stay in effect until October 1, 2007, when another judge will consider whether to grant an injunction preventing implementation of the rule until trial. Similarly, two lawsuits have been filed in Arizona, one seeking an injunction alleging irreparable harm to employers, and the other alleging that the new law is unconstitutional and violates federal immigration law.

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