While Arizona has enacted SB 1070 to make the state a less attractive place for illegal workers, Arizona has operated and will continue to operate under the Legal Arizona Workers Act as amended in May 2008, and this is the statute with the most direct impact on business owners.  This state statute places responsibility on employers to ensure that their employees are eligible to work in the United States.  This law requires Arizona employers to comply in good faith with Form I-9 requirements and confirm a worker's eligibility to work in the U.S. using the E-Verify System.  This requirement applies to independent contractors as well as employees.  The employer possibly may use the Social Security Number Verification Service for a worker's status if the E-Verify System fails to confirm a worker's status.  However, the confirmation of status should be continued through the E-Verify System, despite its shortcomings.   An employer should regularly determine that its paperwork is in order and up-to-date.

Failure to make sure a worker's status allows employment in Arizona will subject the employer to the loss of its Arizona business license.  Intentional and knowing acceptance of false identification from a worker exposes the employer to criminal sanctions.  Over and above these legal consequences, there are the economic costs of training and educating employees who may not have proven their legal status to maintain employment.  After discharging undocumented employees, the employer will have to expend costs to recruit and train replacement employees who do have legal status.  The employer's business will also suffer possible disruption.  The Arizona legislature contemplated that if employers strictly complied with the Legal Arizona Workers Act as amended, the demand for immigrant workers could be controlled.   Unfortunately, this has not been the result.

Business Impact of SB-1070

Until the enactment of SB 1070, it was not unlawful to be an illegal immigrant in Arizona.  It is, of course, against federal law, but because of the federal government's poor enforcement of that law, the illegal immigration problem has not diminished.  SB 1070 makes it a violation of Arizona law to be in Arizona and the U.S. illegally.  It does no more than mirror the federal law at the state level. 

For the Arizona business owner, SB 1070 should not be noticeable from the aspect of imposing more screening obligations.  It does not delete any of the sanctions under the Legal Arizona Workers Act.  SB 1070 is essentially a law enforcement statute.  State and local police officers now will be authorized, under the application of certain safeguards to the public, to inquire of a person's immigration status.  The practical impact of SB 1070 for the employer will likely be to ratchet up the employer's attention to its workforce and whether all workers have legal status.  Until law enforcement starts enforcing the statute and the courts interpret the specific provisions, one can only speculate as to the true effect and impact.  For example, SB 1070 makes it illegal for someone to conceal, harbor or shield an illegal immigrant from detection if the person knows or recklessly disregards the fact the immigrant is in the country illegally while also committing another criminal offense.  Could an employer or landlord be charged with "harboring" an illegal immigrant under the circumstance described above?  Most likely not, but it is premature to draw any firm conclusions.

Summary

For the Arizona business owner, caution should be used in the hiring process to prevent state law sanctions being applied for employing undocumented aliens under the Legal Arizona Workers Act.  The business owner should regularly determine that employee paperwork is up-to-date, particularly the I-9 Forms.  In light of the existing Legal Arizona Workers Act and SB 1070 bringing the immigration issue to a high priority in our state, the required inquiry as to the legality of the employee's presence in Arizona is not only appropriate for an employer, but a necessity, in light of the potentially negative criminal and economic consequences for engaging employees and independent contractors without proper immigration status.