Arizona Amends E-Verify Law

On May 1, 2008, Arizona enacted a bill (HB 2745) that amends the Legal Arizona Workers Act (LAWA). The amendments took effect immediately upon enactment. Clarifications on Outstanding LAWA Issues. The bill amends LAWA to specify that its penalty provisions do not apply to employees hired before January 1, 2008.

The bill makes it clear that independent contractors are "employers" under LAWA and not "employees." If an employer is found to have employed an unauthorized worker, it will only have its license suspended at the specific location where the unauthorized worker was employed, not state-wide (unless the employer does not hold a license specific to that location, in which case the license for its primary place of business will be suspended).Expansion of Enforcement Provisions.

The bill expands the offense of knowingly or intentionally employing an unauthorized worker to include the use of contracted labor with knowledge that unauthorized workers will perform labor under the contract. The employment of an unauthorized worker, even if he or she no longer works for the employer when a complaint is filed, is now actionable (provided the worker was hired after December 31, 2007). In addition, the bill authorizes law enforcement officials to assist in investigations under LAWA.

Broadened Good Faith Defense. LAWA provided a defense to employers that make a good faith effort to comply with federal I-9 requirements. The bill broadens this good faith defense to include "isolated, sporadic or accidental technical or procedural failure to meet the requirements."

In addition, the bill prohibits the Attorney General or county attorneys from investigating complaints that are based solely on race, color, or national origin.Additional Provisions. The bill adds a provision to LAWA requiring proof of E-Verify use from all state contractors and state economic development incentive applicants. State contractors are also required to allow the state to make random verification audits of their employment records. The State Attorney General is now required to post a list of Arizona employers enrolled in E-Verify on its website.

The bill requires the creation of a new voluntary enhanced compliance program for employers. Participants will be required to use both the E-Verify and SSNVS systems and meet additional reporting requirements. Program participants that fully meet these requirements will be presumed to be in compliance with LAWA. Finally, the bill requires all business license applicants to prove they are lawfully present in the United States.As we reported earlier, LAWA prohibits the unauthorized employment of foreign nationals in Arizona, and as of January 1, 2008, requires all employers doing business in the state to verify the work authorization of all new hires using E-Verify.

The law also specifies penalties for employers who knowingly employ unauthorized workers. First-time offenders may have their business licenses suspended, and a second offense could result in the permanent revocation of an employer's license to conduct business in the state. The law was challenged in federal court, but in February 2008, the U.S. District Court in Arizona dismissed the lawsuit. An appeal of that decision is currently pending before the U.S. Court of Appeals for the Ninth Circuit.