Individual states that have passed laws aimed at preventing undocumented illegal aliens from obtaining employment within the state is a hot political topic. The Supreme Court recently upheld a decision by the Ninth Circuit Court of Appeals that legitimized a state’s law imposing harsh penalties for businesses in the state that knowingly and willingly violate the Federal law. California is one of the states in the Ninth circuit, thus it behooves business owners to be aware that California could implement a similar statute that would survive judicial scrutiny and significantly impact a company’s bottom line and operational capability if intentional violations occur.
Arizona Law
In 2007, Arizona passed into law the Legal Arizona Workers Act (“LAWA”), which provides that where an employer knowingly or intentionally employs an unauthorized alien, Arizona courts are authorized to suspend or revoke those licenses necessary to do business in the State of Arizona. As with the federal law addressing this issue, good faith I-9 compliance by an employer provides that employer with an affirmative defense to an alleged violation of this statute.
Under the Arizona law, various sanctions are imposed depending on the extent of the violation. When the employer has had one instance of “knowingly employing an unauthorized alien,” the licensing law requires that the court order the employer to terminate the employment of all unauthorized aliens and file quarterly reports on all new hires for a probationary period of three years, as well as “order the appropriate agencies to suspend all licenses . . . that are held by the employer for” not more than ten business days. A second violation requires the court to “permanently revoke all licenses that are held by the employer specific to the business location where the unauthorized alien performed work.”
Supreme Court Ruling
In the case of Chamber of Commerce of the United States of America, et al., v. Michael B. Whiting, et al., decided by the Supreme Court of the US, the Court held that the Arizona licensing law imposing penalties on employers knowingly or intentionally employing unauthorized aliens was not expressly or impliedly preempted by the Immigration Reform and Control Act (“IRCA”) provisions prohibiting States from imposing additional sanctions under the Act. The Court found that the Arizona licensing law fell under IRCA’s reservation of States’ rights through a savings clause to impose sanctions “through licensing and similar laws.” The licensing laws fell under this savings clause, thus they were upheld and found to be valid. Furthermore as an additional basis for its holding, the Supreme Court did not find an indication of implied or express preemption by Congress in the IRCA for the Arizona licensing law.
Current Impact on California Employers
California currently does not have any similar law likened to the Arizona licensing law; therefore, this recent ruling by the Supreme Court does not have any immediate impact on California employers. Rather, only compliance with the current federal scheme- the Immigration Reform and Control Act is required with respect to documentation of new workers. Compliance with the federal law requires that all employers must review certain documents establishing an employee’s eligibility for employment. Eligibility may be confirmed by review of the potential employee’s United States passport, resident alien card, alien registration card, or other document approved by the Attorney General; or by review of a combination of documents prescribed in 8 U.S.C. § 1324a. Further, the employer “must attest, under penalty of perjury and on a form designated by the Attorney General by regulation, [the Supreme Court names the I-9 as this designated form,] that the employer has verified that the individual is not an unauthorized alien by examining” the requisite documents. Several other states have similar licensing provisions to Arizona. Support from this recent ruling may have the effect of encouraging similar more stringent employment procedures by other states looking to preserve jobs for legal citizens.
In addition to Arizona, three states-Utah, Mississippi, and Virginia, have passed statutes mandating the use of E-Verify, but California is not one of them. (E-Verify is a voluntary Internet based system that allows an employer to verify an employee’s work authorization status through the submission of a request to the E-Verify system about a potential employee. The employer receives either a confirmation of the employee’s authorization to work or a non-confirmation indication from the system.) While the recent Court decision allowing Arizona to mandate use of the E-Verify system is significant, it marks no significant change for California employers in its use of E-Verify. In California, an employer’s use of the E-Verify system remains optional. Though the recent U.S. Supreme Court ruling regarding Arizona law does not have an immediate bearing on California employers, this decision still may affect California employers to the extent that it encourages similar legislation in California. As a business owner, if you require guidance with employee verification requirements for new employees in compliance with the federal immigration laws referenced above, then contact Ronnie Gipson at (415) 655-6820 or by email at info@higagipsonllp.com.
