Arizona's "Employer Sanctions" Law Upheld as Constitutional
February 2008

The federal district court has upheld Arizona’s Fair and Legal Employment Act (often referred to as “the Employer Sanctions law”) as constitutional. The law therefore remains in effect.

The plaintiffs have stated they intend to appeal the ruling, and have already filed an appeal of an earlier dismissal in December.

What this Means for Employers

Under the Act, Arizona employers are required to enroll in and utilize the federal E-Verify program, and may face suspension or revocation of business-related licenses if found to have knowingly or intentionally employed unauthorized workers.

County Attorneys are currently receiving complaints pursuant to the Act, and are investigating non-frivolous complaints. The County Attorneys have collectively stated that they do not believe they will commence any enforcement proceedings before March 1.

The entire Act remains in effect, and employers may be charged with knowingly or intentionally employing unauthorized workers. “Knowing” employment can be found if there is “constructive knowledge” based on the facts and circumstances of a situation (i.e. the employer “should have known” about a worker’s unauthorized status).

Precautions and Considerations

Arizona employers should therefore engage in the following precautions:

  • If you have not already done so, conduct an audit of all I-9 paperwork to ensure it is complete and accurate. Remember, there are specific retention requirements and you should have an I-9 form for all current employees and employees who left employment, as required by the federal regulations.
  • If you have any employees who you know are not authorized to work in the United States, terminate their employment immediately.
  • DO NOT terminate or decline to hire persons solely on the basis of their national origin, linguistic background, or citizenship status. This may expose you to liability for discriminatory employment practices. Be sure you are applying policies even-handedly. For example, if you are auditing I-9 forms, you should either audit the forms of all employees or audit a sampling of forms selected at random. It is important not to select only the forms of workers from a particular ethnic or linguistic group.
  • Be aware that E-Verify has important restrictions and limitations. For example, you may not pre-screen job applicants or verify employment eligibility for current employees on the E-Verify system. There is also a shorter list of documents you may accept for the I-9 form and to use the program, you must grant the federal government the right to view certain employment records without a court order.
  • The Act requires the use of E-Verify for all newly hired employees, though the only consequence of failing to do so is that you will lose the presumption (given to those who successfully use the program) that you did not knowingly or intentionally hire an unauthorized worker.
  • If you are an employer with work sites outside of Arizona, you need not use E-Verify in all locations. You have the option of registering individual work sites in E-Verify, and therefore may opt to register only your Arizona work sites in E-Verify.
  • The law will remain in effect unless ultimately overturned on appeal or amended by the legislature. If the law is later overturned, you can terminate your participation in E-Verify with 30 days’ written notice if you choose to do so. There is some concern that terminating participation may raise an employer’s visibility and increase the chance of an investigation. While those suspicions may or may not be justified, it is important to consider these risks.
  • If you have not yet enrolled in E-Verify, you can learn more about it at www.uscis.gov. The E-Verify icon is on the left of the webpage.
  • You can register for the program online. To do so, you must enter a Memorandum of Understanding.
  • If you are already enrolled in E-Verify, adhere to all terms listed in the E-Verify Memorandum of Understanding.
  • Some companies are considering restructuring their businesses to minimize the impact of the act. There are pros and cons to such measures and you should carefully consult with corporate counsel to help avoid unintended consequences.
  • If you have any questions about any of these—or other—issues surrounding the Fair and Legal Employment Act, please consult with an attorney.

This Client Alert has been prepared by Lewis and Roca LLP for informational purposes only and is not legal advice. Readers should seek professional legal advice on matters involving these issues.

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