Businesses Challenge Arizona's Immigration Law

Arizona Gov. Janet Napolitano backed a state law punishes businesses that hire illegal immigrants.

hide captionArizona Gov. Janet Napolitano is among the backers of a state law that seeks to punish businesses for knowingly hiring illegal immigrants.

Alex Wong/Getty

The federal government may be putting the squeeze on illegal workers, but a number of states are targeting the other side of the employment equation.

Business owners in Arizona could be facing the nation's harshest law against employers who knowingly hire illegal immigrants.

It isn't known yet whether a federal judge will allow Arizona's employer sanction law to take effect Jan. 1. The law says any business that knowingly hires a worker who is in the country illegally will have its business license suspended. For a second offense, the business' license could be revoked.

That is a far stiffer penalty than the rarely imposed federal fines for similar offenses.

Burden on Businesses?

Dry wall contractor Bill Valenzuela said that, as a business owner, he already has a lot of work to do before the end of the year. He must collect money to make payroll and fill out all of the records for the Internal Revenue Service, the city and the county. Having to meet additional state mandates would be a burden, he said.

Valenzuela said the legislators who thought up the law have never run a business.

"What experience have these people had that are passing these laws in Phoenix?" he asks. "Have they given it a thought? Have they lived it?"

Tim Bee, president of the Arizona Senate, said there is a lot of uncertainty because the law is unprecedented. He said Arizona voters want stronger workplace enforcement. And he said the law will be simple for employers to follow.

"The problem for a business comes in if they accept documents for an employee, and they know that those documents are fraudulent; if they have an employee or an applicant that comes that has no documentation, and they send that applicant to get documentation," Bee said.

Bee said all employers have to do is file the standard federal forms and check a job applicant's documents against the federal government's Basic Pilot, or E-Verify, program. That's an online database that tells an employer whether a Social Security card or work permit is valid.

Challenging Constitutionality

But E-Verify is a voluntary pilot program that the federal government is still fine-tuning, and the Arizona law makes participation in the program mandatory.

"We have 140,000 businesses in Arizona. Every time they hire someone, they have to go through this procedure, and it was never meant to be mandatory," said Julie Pace, a Phoenix attorney who represents 12 major business groups opposing the law — contractors, farmers, hotel owners and state and local chambers of commerce.

The groups sued to stop the law from taking effect, arguing that it is unconstitutional because only the federal government can make immigration law. And they say the law's economic consequences are being felt even though it hasn't taken effect.

"People are concerned about starting businesses in Arizona. We've already seen a loss of companies coming here. They're shutting down, or they're taking their money to different states to open their businesses," Pace said.

State legislators and Arizona Gov. Janet Napolitano said they passed the law because it is what voters want.

Bee said they also passed the law to avoid an even more restrictive ballot initiative that anti-immigration activists were pushing.

"If it passed by the ballot, the legislature's restricted from making any changes to it. And since this is kind of cutting-edge legislation in the country, we wanted to keep it within the realm of the legislature, so that we could continue to work on it," he said.

Even Arizona legislators and the state's governor admit that the employer sanction law has problems. They have vowed to revise it during the next session — whether or not a federal judge in Phoenix lets it take effect on New Year's Day. The judge could rule as early as next week.

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