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Employer Sanctions Law Amendments

Our legislature recently made important changes to the employer sanctions statutes (HB 2745) for employees hired after December 31, 2007.

Unauthorized Aliens
Employers that knowingly or intentionally hire, directly or indirectly, unauthorized aliens are subject to liability. Penalties include: terminating all unauthorized aliens, employer probation and terminating business licenses.

Economic Development Incentives
To receive government economic development incentives, employers must participate in the E-Verify program. If you do not comply, you must repay all monies received within 30 days. Incentives are defined as any grant, loan or performance-based consideration from any government entity awarded after September 30, 2008.

Independent Contractor Definition
It amended the employee definition to specifically exclude independent contractors. An independent contractor is any individual or entity that contracts to do work without contractor supervision except as to results. Generally, an independent contractor is someone who: (a) Supplies the tools or materials; (b)Makes services available to the general public; (c) Works or may work for a number of clients at the same time; (d) Has an opportunity for profit or loss as a result of labor or service provided;(e) Invests in the facilities for work; (f) Directs the order or sequence in which the work is completed; and (g)Determines the hours when the work is completed.

Voluntary Employer Enhanced Compliance
To enroll in this program, employers must submit a signed sworn statement to the Attorney General agreeing to comply with various requirements including verifying the employment eligibility of the employee through the E-Verify program. Employers who comply with the requirements of the program may not be penalized for knowingly or intentionally hiring an unauthorized alien. This program is voluntary and ends on July 1, 2018.

Government Entity Requirements
They also added two requirements for government entities:

Licenses
Effective October 1, 2008, an agency or political subdivision in Arizona cannot issue a license to an individual who does not present proper documentation confirming their presence in the United States is authorized under federal law. An agency is any agency, department, board or commission in Arizona or any political subdivision in Arizona that issues a license for the purpose of operating a business in Arizona. A license is any agency permit, certificate, approval, registration, charter or similar authorization required by law and issued by any agency to operate an Arizona business.

Government Entity Contracts
New provisions affecting government contracts become effective October 1, 2008.

First, a government entity cannot award a contract to any contractor or subcontractor that fails to comply with the E-verify program.

Second, every governmental entity must include provisions in every contract that the contractor or subcontractor must: (i) comply with the E-verify program; (ii) state the penalty for failing to comply; and, (iii) permit the government to inspect the contractor's or subcontractor's papers to ensure compliance with the E-verify program.

Third, governmental entities must also establish procedures to conduct random verification of the employment records of contractors and subcontractors with whom they contract.

For your convenience, click here to view a sample contract provision containing these provisions.

Full Text
To view the full text of the amended statute,click here.
Contact Us
Please feel free to contact us if you have any questions.

Scott Ruby
602.257.7432
sruby@gustlaw.com

Chris Schmaltz
602.257.7480
cschmaltz@gustlaw.com

Andrew McGuire
602.257.7664
amcguire@gustlaw.com

Roger Frazier
520.388.4786
rfrazier@gustlaw.com

Sarah Smith
602.257.7458
ssmith@gustlaw.com

Robert Haws
602.257.7976
rhaws@gustlaw.com

Jennifer MacLennan
602.257.7475
jmaclennan@gustlaw.com


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