On Thursday, May 1st, Governor Janet Napolitano signed into law HB 2745, a bill that significantly modifies portions of the Legal Arizona Workers Act (LAWA), the Arizona law that prohibits employers from hiring workers not legally authorized to work in the United States.  Although LAWA has been in effect for less than five months, throughout its brief history, numerous business, Hispanic, and civil rights organizations have vigorously fought to strike it down.  So far, those efforts have been unsuccessful. 

Now, the legislature has retooled the statute, in part, to clarify some of the ambiguities contained in the original version.  Although the amendments do not go far enough (for example, the law still does not grant exceptions for employers that provide critical infrastructure to Arizona communities, such as hospitals, nursing homes or power plants), they impose new and potentially more onerous liability on employers.  However, the statute does create a number of safe harbors for employers that in “good faith” attempt to follow LAWA and applicable federal immigration laws.

The following is a summary of the significant amendments:

  • LAWA only applies to employees hired after December 31, 2007.  This means that employers are not liable under the statute for any employees hired before 2008.
  • Business license suspensions or revocations are limited to the location(s) in which the unauthorized alien worked.  However, if no licenses are required at that location, then suspensions will apply at the employer’s “primary” place of business in Arizona.
  • Independent contractors are not “employees” under LAWA.  However, independent contractors may be “employers” under LAWA.
  • Criminal liability (class 4 felony) is imposed on persons who knowingly accept false identification from an applicant and use that false identification to verify legal work status.
  • After September 30, 2008, any Arizona governmental entity (state or political subdivision) is prohibited from awarding a contract to any contractor or subcontractor that does not comply with federal immigration laws and E-Verify requirements.  Such governmental entities must ensure that their contractors comply with those requirements.
  • Employers seeking to obtain an economic development incentive from a government entity must first register for and participate in E-Verify, and show proof of the same.
  • Employers may participate in a Voluntary Enhanced Employer Compliance Program (the “Program”), which provides employers with a “safe harbor” from liability under the statute.  Employers that enroll in the Program would be required to submit a signed affidavit to the Attorney General that includes the employer’s agreement to do the following:

    Verify new hires through E-Verify;

    Verify the accuracy of Social Security numbers (SSNs) through the SSN Verification Service (the “Service”) for any employee not verified through E-Verify;

    Within 30 days after enrolling in the Program, submit to the Service the full name, SSN, date of birth and gender of each employee;

    On receipt of a failed verification result, notify the employee of same and instruct employee to resolve the discrepancy with the Social Security Administration within 90 days (further requirements also apply);

    Verify the accuracy of SSNs and resolve failed verification results in a consistent manner; and

    In response to a written request from the Attorney General or a county attorney regarding a LAWA complaint that the employer has knowingly or intentionally hired an unauthorized alien, provide documents indicating that the employee was verified through E-Verify or that the accuracy of the employee’s wage report was verified through the Service.

  • Even those employers that do not enroll in the Program now have a “safe harbor” from liability under LAWA, if they can demonstrate that they made a “good faith attempt to comply with the requirements” of the applicable federal immigration laws, “notwithstanding an isolated, sporadic or accidental technical or procedural failure to meet the requirements” of those laws.
  • Added A.R.S. § 41-1080 to prohibit governmental entities, including the State of Arizona and its political subdivisions, from issuing business licenses to individuals who cannot provide proper documentation indicating that their presence in the U.S. is authorized by federal law.  This statute becomes effective September 30, 2008.
  • Neither the Attorney General nor the County Attorneys may investigate complaints that are based solely on race, color or national origin.  However, the amendment now expressly authorizes the filing of anonymous complaints with the Attorney General or County Attorneys.

Additional Information

Ogletree Deakins previously prepared and distributed written materials explaining the specific requirements of the Act, as well as instructions on how to enroll in the E-Verify program.  If you would like to receive a copy of those materials, or would like further assistance on compliance with the Act, contact Kerry Martin at (602) 778-3715 (Phoenix) or Erica Rocush (Tucson) at (520) 575-7443.  If you have other immigration-related questions, contact Jay Ruby in our Immigration Practice Group, or our Client Services Department at 866-287-2576 or via e-mail at clientservices@ogletreedeakins.com.

Note: This article was published in the May 5, 2008 issue of the Arizona eAuthority.

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