Arizona employers are on alert: Effective immediately upon the Governor's signature, which is considered likely in early May, new changes to the Arizona employer sanctions immigration law clarify some aspects of the law and add new uncertainties and risks for the state's businesses. On April 28, 2008, the Arizona Legislature passed HB 2745 to amend the 2007 Legal Arizona Workers Act (LAWA). Additionally, a lawsuit regarding LAWA's constitutionality is currently pending before the Ninth Circuit Court of Appeals with oral argument scheduled to occur on June 12.

The primary changes to LAWA are the following:

  • Effective date. The employer sanctions law applies only for employees hired on or after January 1, 2008. LAWA will no longer apply to individuals who started employment at a company prior to January 1, 2008.

  • Possible liability for independent contractors' hiring practices. Employers may now be liable for intentionally using independent contractors who employ unauthorized workers. 

  • Changes to investigation procedures. A new official written complaint form was developed.  Complaints submitted on these forms must be investigated by the applicable county attorney or attorney general.  The law also provides that anonymous complaints are "not prohibited," but does not require mandatory investigation for anonymous complaints.

  • Sheriffs’ Offices Authorized to Investigate. In the original law, only the county attorneys and attorney general could investigate complaints under LAWA.  The new amendments add that the sheriffs and other local law enforcement agencies may participate in investigations under LAWA.

  • Limitation on exclusively race-based complaints. Complaints based "solely" on race or national origin shall not be investigated, but complaints based partially or primarily on race and national origin can be investigated.

  • Sanctions may be limited to the specific location where a violation occurred. If a business has a license specific to the location where an undocumented employee worked, only that license would be suspended or revoked. If a business has only general licenses, however, all of its licenses are still at risk.

  • Good faith defense for occasional technical violations. Employers who make a good faith attempt to comply with LAWA should not be found to have committed a violation for "isolated, sporadic or accidental, technical or procedural failure[s]."

  • New voluntary opt-in defense created regarding existing employees. Employers are given a new defense to sanctions under LAWA if they enroll in a voluntary employer-enhanced compliance program that includes Social Security Number Verification Service, with certain mandated follow-up steps, for existing employees. Employers who enroll in this voluntary program must submit an affidavit to the Attorney General stating that the employer will verify new hires in E-Verify and will verify its SSNs of employees at the company who have not been processed through E-verify. The SSNVS by federal law can only be used for certain purposes, and adverse employment action is not supposed to occur if a person's name does not match his or her SSN.

  • Mandatory E-Verify as a condition of government contracts and grants.  Those companies who enter into contracts with state or local governments or receive financial assistance must enroll in the E-Verify Program and use it for new hires

  • Clarification of second violations. A violation cannot be considered a second violation unless it occurred while a company was on probation for a first violation.

  • Penalties for employers who pay in cash. Employers face new penalties if they pay workers in cash and fail to withhold taxes, report new hires for child support garnishment, pay unemployment insurance or workers compensation premiums.

Copyright © 2008 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This newsletter is a periodic publication of Ballard Spahr LLP and is intended to alert the recipients to new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and specific legal questions you have.