Employers are offering creative perks to attract and retain today’s workers.
Plus all the HR resources you need to be more efficient and effective this fall!
SHRM Seminars will host HR education every month in San Francisco this fall! Select the program that meets both your scheduling and development needs.
September 27 - 28.
A growing list of state and local governments are adopting diverse immigration policies, requiring businesses to take more care in hiring.
Jason LeVecke says he's fighting mad--and scared to death. The Arizona franchisee of 68 fast-food restaurants employs almost 1,300 workers and faces the cataclysmic effect of a 2007 state law that threatens to close down his business and put employees on the street if one manager hires an illegal alien.
The Arizona law, an Illinois law and recent measures in other jurisdictions come in response to Congress' inability to pass comprehensive immigration reform. Lacking federal direction on a constitutional issue, some state and local officials have stepped into the void by enacting immigration laws of their own. As a result, the melting pot boils over, with immigration-- its very foundation--fanning the flames. And, because the workplace remains chief draw for most immigrants, employers, caught between conflicting mandates, sit at its whitehot center.
"It would make me personally and professionally bankrupt," if, for example, "one of my hiring managers, unbeknownst to me, hires an illegal," says LeVecke of Arizona's Chapter 279 of the Laws of 2007. "The knowledge of the hiring is imputed to me, and the state can take away my license to operate." Arizona employers mounted a massive court challenge, claiming that only the federal government can regulate immigration. Last month, U.S. District Court Judge Neil Wake dismissed the lawsuit, ruling that the lawsuit was premature because the law had not yet taken effect, and that it did not directly impact the employer plaintiffs. Also, the court ruled that the challenge should have been filed against county prosecutors rather than the governor. County prosecutors then were sued, but no preliminary relief had been issued at press time.
In the first six months of 2007, 43 states enacted 182 laws related to immigration, according to the National Conference of State Legislatures. Legislation affecting employers falls into two main groups: laws penalizing employers of illegal immigrants, and measures that give some status to undocumented immigrants already in the workforce. This patchwork of laws creates serious challenges for employers, especially multistate companies.
While Arizona requires employers to use E-Verify, the federal system for checking work status, and bars them from hiring unauthorized workers, Illinois lawmakers in 2007 barred employers from using E-Verify until it becomes more accurate. A legal challenge focusing on federal pre-emption has been stayed for 60 days, as of Dec. 14, 2007, to give legislators time to reconsider the law. State officials agreed not to enforce the law during that period.
Meanwhile, on July 26, 2007, in Hazleton, Pa., a federal judge struck down a local 2006 law that penalized landlords who rented to undocumented aliens and employers who hired illegals. The judge said the U.S. Constitution reserves immigration issues for the federal government. And in Oklahoma, the stringent Taxpayer and Citizen Protection Act of 2007 took effect on Nov. 1, despite court challenges by unsuccessful civil- and Latino-rights groups and church leaders. The law bars employers from discharging even one legal worker while retaining an undocumented one.
Employers on the March Arizona's porous border with Mexico "is the flash point," says David Selden, a Phoenix attorney with Ballard Spahr, the firm representing employers challenging the state law. On July 2, 2007, Gov. Janet Napolitano, a Democrat, signed the Fair and Legal Employment Act, probably the nation's harshest crackdown on hiring illegal aliens.
The law creates a volatile tinderbox for employers: fear of workplace violence and the threat of business closures, the administrative burden of enforcement, labor shortages, and resistance to spending resources to hire and train employees who may not be able to work legally. Fear of workplace violence and the threat of business closures. Anyone can make a complaint, "and that scares people," says Michelle Bolton, state director of the 10,000- employer Arizona chapter of the National Federation of Independent Business. One restaurateur recently told her that an affiliate of the Minuteman Project--whose members monitor business and immigration--threatened him, saying, "I have my eye on you; I'm going to close you down." "Employers are scared," Bolton adds.
In October, Ballard Spahr attorney Julie Pace trained 100 fast-food restaurant managers about the law. Seventy-two reported receiving complaints from customers, including some who told managers they thought Spanish-speaking workers were undocumented and that the restaurants needed to be investigated. Restaurant owners also receive complaints via web sites, e-mails and phone calls.
LeVecke even faced extortion: "A manager turned out to be a poor performer, and as we started to document his work performance, he quit," LeVecke recalls. The former employee later "asked me for $20,000. When I refused, he told me he knew he hired illegals and he could turn me in." Careful paperwork protected the owner.
Selden says "knowing" employment of an unauthorized alien can be based on gossip or rumors. Also, the law deems employers to have "constructive" knowledge of the employment of an unauthorized alien even if only a supervisor, as opposed to an executive, knows about it. "In the construction industry," he states, "crew leaders may be considered supervisors. Under this law, the knowledge of a crew leader becomes the knowledge of the employer."
Administrative burden. The law makes employers enforcers of immigration law. Fifty-two percent of employers in Arizona are small businesses, and "It's not like they don't want to follow the law," says Bolton. "They want to do the right thing, but the tutorial for using E-Verify is 90 pages long." Dealing with E-Verify makes tax forms seem simple, adds Rick Robinson, president of DLC Resources in Phoenix, a landscaping company with 270 employees. LeVecke centralized hiring in Phoenix and created a department of legal hiring compliance. "It costs a lot of money to do that. But the stakes are that high," he says, because a violation "could close us down."
Labor shortages. With unemployment at about 3.3 percent in September, "the state already has a labor shortage," says Robinson, who adds that the law will "shrink the labor force dramatically."
Robinson notes that some legal workers have spouses who aren't legal. If one has to leave, both leave. "I'm going to lose a lot of legal workers that way," he predicts. "Employers who use unskilled labor are at a significant disadvantage under the new law," says Phoenix attorney Bonnie Gibson. Workers who "pass the screen" are more expensive. Hiring workers who will pass E-Verify will raise wages and prices. "In Arizona, how many of those companies will stay in business once they start charging three times as much?" she asks.
Employers involved in the court challenge are labor intensive, says David Jones, president and chief executive officer of the Arizona Construction Contractors Association, the lead plaintiff. The Arizona Department of Commerce conducted a January 2005 study that found that by 2015, the construction industry will be short 40,000 employees.
"We can't find people, even though wages keep going up," agrees Joe Sigg, director of government relations for the Arizona Farm Bureau. "Growers are paying $17 to $19 an hour to harvest lettuce. Raising wages doesn't increase the supply of workers." Recruitment and training costs. Employers worry about hiring and training workers they may have to let go. E-Verify compares new hires' documentation to Social Security and U.S. Department of Health and Human Services databases and can usually confirm work authorization within 24 hours for about 90 percent of the names submitted. But for the names that can't be confirmed in 24 hours, the employer receives a tentative nonconfirmation notice and must tell the new hire, who may contest the finding. If not contested or resolved in 10 days, E-Verify issues a final nonconfirmation, but may take up to 30 days to deliver the notice. Once delivered, an employer has to let the employee go.
The issue divides Arizona's Republican Party by splitting the laissez-faire economy camp from the law-enforcement camp. "There are pro-business Republicans who say, 'We need more workers because baby boomers are retiring,' " says Selden. "But the social conservatives among the Republicans are anti-immigration and favor these laws." Normally, the Arizona business community has good relations with the heavily Republican legislature, "but on this they were steam-rollered," he complains. "This bill was passed at the end of the session," explains Gibson. "It wasn't vetted and calibrated as a bill usually would be. It was the result of a political push to get something done. It went around the employer community and struck a grass-roots chord. It's a talk-radio issue, and company owners don't usually talk on talk radio."
Meanwhile, in Illinois, an urban state with a vocal immigrant community and a strong labor presence, Gov. Rod Blagojevich, a Democrat, on Aug. 13, 2007, signed Public Act 95-0138, amending the state's Right to Privacy in the Workplace Act. After Jan. 1, 2008, the amendment bars employers from using E-Verify until it's 99 percent accurate and bars local governments from requiring employers to use the system as a condition of receiving a government contract or business license. Illinois lawmakers put enforcement authority with the state Department of Labor (DOL), whose officials must first try to resolve any complaint by conciliation and, if those efforts fail, take the offending employer to court. The U.S. Department of Homeland Security (DHS) challenges the law as pre-emptive. The Illinois Chamber of Commerce supported the law, says Jay Shattuck, director of its Employment Law Council. Employers' motives, Shattuck says, were a combination of distrust of E-Verify and the need for workers in skilled trades. Shattuck cited a February 2006 U.S. Chamber of Commerce study pointing to E-Verify's high error rate.
E-Verify can be helpful, Shattuck says, yet "it should be a quality system." Shattuck says the 2007 amendment is about making a statement. In fact, even though the 750 Illinois employers already enrolled in E-Verify will be in violation of state law if they continue with the program, Shattuck doubts that they will stop using it. State Sen. Iris Martinez, a Democrat, who sponsored the original bill, now numbers among co-sponsors of legislation that would amend it because of the federal suit. And the grant of a DHS and the Illinois attorney general joint motion to stay the legal challenge will give legislators time to consider this amendment. According to Martinez's e-mail statement, the amendment would discourage, but not bar, Illinois employers from using E-Verify.
Problems, Potential Solutions
Experts tick off a list of problems with E-Verify, starting with inaccuracy, mismatches, an inability to detect fraud and a required memorandum of understanding (MOU) with the Social Security Administration and the DHS. The MOU allows federal officials to search workplace records; otherwise, they would need a warrant, says Selden.
"You have to sign it. It eliminates employers' right to privacy," adds Robinson. "It's one thing if it's voluntary, but the Arizona law makes it mandatory." And, the MOU commits an employer to use the program at all its locations--something an Illinois company won't be able to do without violating state law.
Selden supports comprehensive immigration reform that allows the existing workforce to work, solves border-control issues and addresses labor-supply problems. "Employers would then have greater confidence that there will be peace," he says. "We need more visas for all kinds of labor," argues attorney Linda Zengerle of Steptoe and Johnson.
"The politicians are behind this," complains Florida-based diversity consultant Pegine Echevarria. "They're responding to a public that doesn't want illegal immigrants. But we're a nation of immigrants. Employers and entrepreneurs are the basis of the American dream."
Diane Cadrain is an attorney and has been covering workplace legal issues for 20 years. She is amember of the Human Resource Association of Central Connecticut.
Online Sidebar: A Sampling of State Laws on Immigration
SHRM toolkit: The I-9 Form and Illegal Workers
Study: A Workforce Needs Assessment of the Arizona Construction Trades Industry(Arizona Department of Commerce)
Web site: Arizona Employers for Immigration Reform
Report: Report of the Task Force on Oklahoma Illegal Immigration Issues (Oklahoma Senate Task Force)
Testimony: Immigrant Employment Verification and Small Business (U.S. Chamber of Commerce)
Arizona's Chapter 279
Under Arizona Chapter 279, the Fair and Legal Employment Act, anyone may file a complaint alleging that a company employs illegal aliens, and the state attorney general has the power to investigate, starting with verifying the person's work eligibility. If the attorney general decides that the complaint isn't frivolous, he or she notifies local lawenforcement authorities, who begin prosecution.
Employers found guilty of a first violation may be ordered to terminate the illegal worker. They also face suspension of their legal authority to do business and being placed on probation for knowingly or intentionally hiring an illegal; probation can result in permanent license revocation. For both "knowing" and "intentional" offenses, license suspension decisions are based on the number of unauthorized aliens employed, prior misconduct, the harm resulting from the violation, good-faith efforts to comply, duration of the violation and the role of managers in the violation.
The law gives employers three defenses:
If the employer can prove that it used E-Verify for employment authorization, there is a rebuttable presumption that the company did not intentionally or knowingly employ an unauthorized alien.
If an employer can prove that it complied in good faith with the federal immigration law, it has an affirmative defense that it did not intentionally or knowingly employ an unauthorized alien.
If an employer believes in good faith that its actions would violate some other state or federal law, such as antidiscrimination laws, it is not required to take that action.
As of Dec. 31, 2007, the law requires every employer to use E-Verify.
How To Stay Legal
"Have employees fill out the W-9 form," advises Ballard Spahr attorney Julie Pace in Phoenix. The W-9 is a federal form, usually used for vendors or third parties, but it can also be a tool for every employer to use with every employee.
Have the employee check the "individual" box. The form asks for Social Security numbers, under penalty of perjury. "Avoid a charge from the federal government that your company knowingly hired an illegal," says Pace. "Fully complete the I-9 [employment eligibility verification form]. Have all the documentation, but don't keep photocopies. Federal immigration officials know if a document is counterfeit even if it is a photocopy. They can say, 'Look at this--you should have known.' If you don't keep photocopies, they can't be used against you. Establish procedures for responding to federal investigations. Teach employees how to respond to nomatch letters. "Bar discussions of legal status at work," Pace continues. "It should be a private topic."
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 3,200 companies