Court Upholds Arizona 's Immigration Law; Employers Face Tough Sanctions - Webinar

You are invited to join us via teleconference and web presentation on December 12, 2007 at 1:00 PM for an informative session on the court's ruling and the Arizona Legal Worker's Act presented by Sandra Sanders of Steptoe & Johnson LLP.  For more information, call Jacquelyn Baczynski at 602-257-7708 or e-mail jbaczynski@steptoe.com. 

In the meantime, if you have questions about this new development, contact Sandra Sanders, Labor & Employment special counsel, at Steptoe & Johnson LLP at ssanders@steptoe.com.

Court Upholds Arizona 's Immigration Law;
Employers Face Tough Sanctions 

A federal district court has dismissed a legal challenge to Arizona 's Legal Arizona Workers Act, clearing the way for the immigration law to take effect on January 1, 2008.  The Act threatens the business licenses of an employer who knowing or intentionally hires an unauthorized worker.  It also requires that all Arizona employers verify the work authorization of new employees through a federal computer system.

Issued late December 7, 2007, the court ruling held that business and civil rights entities cannot challenge the Act now because they do not admit to employing unauthorized workers, and therefore do not face a current and specific threat of prosecution.  The court also stated that Arizona employers do face economic harm arising from the requirement that they participate in E-Verify, a federal system that confirms the work authorization of new employees.  However, because the challengers to the Act sued Arizona 's Governor, Attorney General and Director of the Department of Revenue, rather than the county attorneys who will enforce the Act, the court dismissed their claims.

With dismissal of the legal challenge, Arizona businesses face increased enforcement and harsher penalties for employing unauthorized workers after January 1.  The substance of the Act mirrors federal law by prohibiting an employer from "knowingly" or "intentionally" employing an unauthorized alien.  However, the Act reaches further than current federal provisions by threatening the business licenses of Arizona companies who are found to have violated the law -- permitting a 10-day suspension of a business license for a first offense and mandating a permanent revocation of the license for a second offense.

The Act also mandates the use of the federal government's E-Verify system, formerly called the Basic Pilot Program, which is voluntary under federal law.  Participants in E-Verify must confirm the work authorization of all new employees with information from the U.S. Social Security Administration and Department of Homeland Security.  While the Act contains no independent penalty for a failure to utilize E-Verify, an employer who forgoes the system will lose a valuable defense to a claim that it knowingly or intentionally employed an unauthorized worker.  Indeed, the court's ruling suggests that an arguably independent defense to such a claim -- good faith compliance with the federal I-9 process -- will not be available if an employer fails to also use E-Verify.  The court observed that a failure to use E-Verify may leave an employer who is found to have hired an unauthorized worker with "no good faith defense to the Act's harsh sanctions."