Legal Arizona Workers Act

By Roxanne Bacon

Reprinted from the Arizona Journal of Real Estate and Business

On July 2, 2007, Governor Janet Napolitano signed House Bill 2779, the Legal Arizona Workers Act, into law.  The statute takes the most aggressive state action in the country against employers who “knowingly” or “intentionally” hire undocumented workers.  HB 2779 requires employers to verify that new employees have valid work authorization; the first conviction for a knowing or intentional failure to do so will cause the employer’s business licenses to be suspended.  A second offense can result in the “business death penalty” – permanent revocation of the employer’s licenses to do business in Arizona.

Major Provisions of HB 2779:

Effective January 1, 2008, the statute “requires” Arizona employers to use the federal government’s “E-Verify” Program to verify the employment authorization of all newly hired employees.  The statute does not contain a penalty for not using E-Verify; under federal law the program is voluntary.

Employers must not “knowingly” or “intentionally” employ unauthorized workers.  “Intentionally” means that the objective is to cause a certain result or to engage in certain conduct.  “Knowingly” includes not only actual knowledge, but also constructive knowledge (knowledge which may fairly be inferred through notice of certain facts and circumstances which would lead an employer, through reasonable care, to know about a certain condition).  The definitions of “knowingly” are specifically attached to the federal definitions at 8CFR 27a. 1 (1)(1).  “Intentionally” has the meaning set forth in A.R.S.  §13-106.

A complaint by anyone that an employer has hired unauthorized workers in violation of the law triggers a duty of the Attorney General or County Attorney to investigate.  (Knowingly filing a false or frivolous complaint against an employer is a class 3 misdemeanor.)  If a complaint is not frivolous, the Attorney General or County Attorney must notify Immigration and Customs Enforcement (ICE) and request verification of the identified employee’s status.  The county attorney must also notify local law enforcement, and, if the alien is unauthorized, file charges against the employer.

The first time an employer is found to have “knowingly” employed and unauthorized worker:

q  The employer must terminate the worker, and must sign a sworn affidavit within three days that it has terminated the employment of all unauthorized aliens and will not, in the future, knowingly or intentionally hire undocumented workers.  All business licenses will be suspended if the affidavit is not timely filed, until the affidavit has been filed.

q  The Court may order the employer’s business licenses to be suspended for up to 10 days.

q  The employer will be subject to a three-year probationary period, during which it must file quarterly reports with the County Attorney listing each new employee hired by the employer at the specific location where the unauthorized worker performed work.  If the employer knowingly or intentionally employs an unauthorized worker during the probationary period, the employer’s business license(s) will be permanently revoked.

If an employer is found to have “intentionally” employed an unauthorized worker:

q  The employer must terminate the worker, and sign a sworn affidavit within three days that it has terminated the employment of all “unauthorized aliens” and will not, in the future, knowingly or intentionally hire undocumented workers.  All licenses will be suspended if the affidavit is not timely filed, until the affidavit is filed.

q  The Court must suspend the employer’s business license(s) for at least ten days.

q  The employer will be subject to a five-year probationary period, during which it must file quarterly reports with the County Attorney listing each new employee hired by the employer at the specific location where the unauthorized worker performed work.  If the employer knowingly or intentionally employs an unauthorized worker during the probationary period, the employer’s business license(s) will be permanently revoked.

Licenses subject to suspension or revocation include “any agency permit, certificate, approval, registration, charter, or similar form of authorization that is required by law and that is issued by any agency for the purposes of operating a business” in Arizona, including articles of incorporation, certificates of partnership, and transaction privilege tax licenses.

The statute exempts three categories of licenses:

q  Any professional license.

q  Any license issued pursuant to Arizona Title 45 (water).  Any license issued pursuant to Title 49 (environment). 

An employer is entitled to a rebuttable presumption that it did not knowingly or intentionally employ an unauthorized worker, if the employer demonstrates that it used the federal E-Verify program to verify the employment eligibility of a worker later determined to be unauthorized, or an employer establishes an affirmative defense that it did not knowingly or intentionally employ an unauthorized worker, if:  The employer can show that it, in good faith, was in compliance with the federal I-9 employment verification process at 8 U.S.C. §13246.

Governor Napolitano indicated that the fill contains certain flaws which should be addressed:

Ø  The bill does not protect critical infrastructure.  Hospitals, nursing homes and power plants could be shut down for days because of a single wrongful employment decision.

Ø  The revocation provision is overbroad and could cause a business with multiple locations to face shutdown of its entire operation based on an infraction that occurred at only one location.

Ø  The bill is underfunded.  Even though the Attorney General’s office must establish an entirely new database and must investigate complaints statewide, only $100,000 is appropriated for that purpose, and only $70,000 is appropriated to notify employers of the change in the law.

Ø  There is no express provision protecting Arizona citizens or legal residents from discrimination under the terms of this bill.

Ø  The bill contains several typos, mis-citing a federal law.  Governor Napolitano indicated willingness to call a special session later in the year in order to “fix” the bill before its effective date of January 1, 2008.  She emphasized, however, that the special session would be aimed at clarifications, omissions and corrections, not at undercutting the underlying strength of the bill.  To date, the Governor has not called a special legislative session to correct the listed flaws.

Ø  Several lawsuits contesting the validity of HB 2779 have been filed alleging that federal law preempts the state law, and thus, any state regulation of work authorization sanctions is improper, especially when the state must make determinations about an employee’s immigration status.  As of this date, the outcome of the lawsuits is undetermined.

  [ Home ] [ Up ] [ Practice Areas ] [ Attorney Profile ] [ Consultations ] [ Representative Clients ] [ Articles ] [ Links & Resources ] [ Contact Us ]

Copyright © 2001-2008 The Bhandhusavee Firm, PLC

DISCLAIMER:  The information provided on The Bhandhusavee Firm, PLC web site is offered purely for informational purposes.   It is not intended to create or promote an attorney-client relationship, and does not constitute and should not be relied upon as legal advice.   It is not intended to seek professional employment in any state where lawyers in the firm are not admitted to practice, or in any state where this web site would not comply with applicable requirements concerning advertisements and solicitations.  We strive to make every attempt to keep this information current. We do not promise or guarantee, however, that the information is correct, complete or up-to-date, and internet subscribers and online readers should not act based upon this information without seeking professional counsel from an attorney admitted to practice in your location.   Transmission of information from The Bhandhusavee Firm, PLC web site is not intended to create, and its receipt does not constitute, an attorney-client relationship with The Bhandhusavee Firm, PLC or any of its individual attorneys or personnel.   If you elect to communicate with the firm, or any of its attorneys, through this web site, do not transmit any information about any matter (and particularly not any confidential information) that may involve you until the firm has agreed to represent you, and you have received confirmation of that fact in the form of a written engagement letter.