What You Can Learn from Arizona's Immigration Experiment

Every business operator should be aware of a new law in Arizona because similar legislation could be heading to a state near you. The Arizona law passed in July imposes sanctions on employers who knowingly hire illegal workers. The penalties include suspending a business license for up to 10 days on a first violation and revoking the license on the second.

The law also requires every business in the state to verify employment authorization of new hires using the federal E-Verify program. Arizona was first in the nation to enact legislation at the state level with such sweeping regulations and strict penalties for employers.

The constitutionality of Arizona’s law has been challenged in Federal District court and has made its way to the 9th Circuit Court of Appeals. The question remains, do states have the authority to set immigration policy, a responsibility reserved for the federal government? The answer to this question bears significance for every employer in the nation.

While we wait for the answer, a number of states are following Arizona’s lead and setting their own immigration laws. Long one of the country’s greatest challenges, illegal immigration impacts every sector of our nation’s economy. A great opportunity to repair our broken system presented itself last year, when the U.S. Senate crafted a comprehensive plan that reflected a bi-partisan compromise approach.

The compromise identified core areas that require reform, including enhanced border security, a temporary worker program, an accurate and non-discriminatory way to verify work eligibility, and increased availability of work visas. Additionally, the proposal provided a way to settle the legal status of undocumented immigrants. It required tough fines, background checks, and well over a decade wait before citizenship would even be possible.

Unfortunately, Congress failed to gather the political will to tackle this most important issue. Predictably states, fed up with federal inaction, have stepped in to fill the void.

The resulting Arizona law has left businesses concerned for a number of reasons. First, it sets a precedent for states to craft a patchwork of immigration policies, making it confusing for businesses that operate in multiple states. Second, businesses are concerned about the law’s definition of “knowingly.” With identity theft running rampant in the state, it’s easy for companies to employ illegal workers without their knowledge. But proving what you knew or didn’t know about an employee’s status could put your business license in jeopardy.

Third, Arizona businesses are required to use E-Verify to check the status of new employees. This puts additional burden on an already cumbersome HR process. It could also perpetuate the crime of document fraud.

Some states are following in Arizona’s footsteps and introducing similar measures. Georgia, Colorado and Oklahoma, for example, require use of E-Verify either for all employers or public sector employers only. The business community in Missouri is currently engaged in a battle as to whether E-Verify should be mandatory. Other state laws sanction employers in a manner similar to Arizona. Oklahoma and Tennessee offer an extra security for employers who use E-Verify, something Arizona businesses would like to see incorporated into the existing state law.

This year, the Arizona legislature also is considering a measure to create a state temporary guest worker program. If this is successful, other states may look to it as a pilot program.

Businesses in Arizona are uncertain about how they should respond to the new employer sanctions law. Companies want to be careful, but don’t want to discriminate. They want to follow the law, but don’t want to deal