AD HOC Committee on Business Owners and Work Site Enforcement

Speakers Present

Steve Moortel, Policy Advisor to the Majority

OPENING STATEMENT

Chairman Weiers stated that this is the second meeting of this ad hoc committee assembled to provide input to the worksite encroachment law passed several months ago; he reiterated his belief that this is a law that is constitutional and can work. He stated that he welcomes suggestions to make a good law better and thanked the committee members for their time and involvement.

PRESENTATION ABOUT THE E-VERIFY SYSTEM

Ms. Clarke described Salt River Project’s (SRP) experience with the E-Verify system: SRP opted to begin the program when it was still voluntary in May of 2006, found the training to be easy and has had very few problems with it. She stated that SRP has now processed 800-900 people and that anticipated problems with technical and accuracy issues did not occur; she added that there has been little downtime with the E-Verify system.

Mr. Sanders informed the committee that the Greater Phoenix Chamber of Commerce has signed up for E-Verify and is generally happy with the results. He stated his concern that, if an illegal individual steals a citizen’s ID, the system will indicate that the illegal is then eligible to work. Ms. Clarke replied that a picture ID would be used as well, which would reveal the discrepancy. Discussion ensued that acknowledged the stolen ID problem.

Mr. Rios related a personal situation when he was approached by someone who wished to purchase his young son’s social security number; he wondered if age was also checked.

Chairman Weiers stated that Arizona is first in the nation in identity theft and described examples of plans that are used.

Mr. Bark stated his belief that E-Verify would reveal the age discrepancy if a youth’s social security number was stolen and used by an adult.

Chairman Weiers stated that Department of Administration has been using E-Verify and that he would obtain more information on their experiences.

Chairman Weiers recessed the committee at 3:15 p.m. so that technical difficulties with the sound system could be fixed; he reconvened the committee at 3:22 p.m.

Mr. Nye stated that he is with Sun Construction, which has used E-Verify and had no difficulty with it.

DISCUSSION OF THE HANDLING OF COMPLAINTS AS DESCRIBED BY HB2779 (Laws 2007, Chapter 279)

Mr. Cook explained that the Arizona Prosecuting Attorneys Advisory Council (APAAC) membership is set by statute, that the group works together to achieve consensus, and that it has been reviewing Chapter 279, the worksite law. He stated that the goal was to look at potential issues with the law and to identify any changes or adjustments to make the law work, and to assure implementation of the legislative intent. He commented that the Maricopa County Attorney’s office opted to pursue its own policies and process, so APAAC represents the consensus of the fourteen other county attorney offices.

Mr. Cook handed out an example of the initial complaint form (Attachment 1). Chairman Weiers asked how someone would know all of the information requested, and how a complaint could be investigated if there is very little information filled out; Mr. Cook replied that this is to begin a process and that the individual making the complaint must make a best effort to provide information. Discussion ensued about the notary requirement, which would remove anonymity from the complainant.

Mr. Rios asked if an unsigned complaint would be investigated; Mr. Cook replied that the fourteen counties outside Maricopa would not allow an anonymous complaint. Mr. Rios stated his belief that business owners would be in agreement with that.

Mr. Bark asked about the Pima County requirement of a meeting with a detective; Mr. Cook replied that this is specific to the county.

Mr. Bark asked if anyone other than Maricopa County is looking at an IGA (intergovernmental agreement) with the sheriff; Mr. Cook replied that there is an MOU (memorandum of understanding) in Maricopa County, and that there is a question if a county attorney can delegate such a responsibility. He went on to discuss that this is for civil not criminal enforcement.

Mr. Laird stated that Mr. Cook’s suggestions and safeguards should be incorporated into statute.

Mr. Sanders stated that he concurs, and also suggested that race-based complaints be investigated. He asked about due process and how it will work with employees who are incorrectly deemed illegal and not authorized to work (a false negative result), are fired, and are then discovered to be legal. Mr. Cook replied that the protocol for that is not yet complete, but that the county attorney’s office (the enforcing agency) still has to prove that the hiring was either knowing or intentional. He stated that if the individual has completed an I-9 form (Employment Eligibility Verification form for the Department of Homeland Security), then the business does have that proof.

Chairman Weiers asked if Mr. Sanders was asking from a business or from an employee perspective; Mr. Sanders replied that he was asking from a business perspective. Mr. Bark clarified that the task is to define the process if a legitimate citizen is denied work; Mr. Sanders replied that the process is to investigate.

Mr. Cook stated that the issue is how to prove a knowing violation by an employer; Mr. Laird reiterated the importance of incorporating that safeguard in the statute. Mr. Bark stated that he would like to hear from Maricopa County first; Mr. Cook concurred that it is important to hear their rationale. Chairman Weiers stated that the County had not been included in these early meetings, but that he will get those answers soon.

Mr. Rios asked about the appropriateness of changing the penalty for making frivolous complaints from Class III misdemeanor to Class I misdemeanor.

Mr. Cook explained that:

· Class III misdemeanor punishment can range from a suspended sentence to a $500 fine, one year probation, and 30 days in jail, and

· Class I misdemeanor punishment can range from a suspended sentence to a $2,500 fine, three years probation, and 180 days in jail.

Chairman Weiers stated that the initiative may be amended to make the submission of frivolous complaints a felony; Mr. Rios stated that he and the business owners he represents would have no problem with it being a felony.

Mr. Quelland asked about item 4 in Attachment 1, the complaint form; he asked if an individual’s rights may be violated by the requirement to obtain specific and detailed information. Mr. Cook stated that he could not imagine that context because, if a crime has been committed, any information gained is subject to prosecution. He further stated that if a crime is committed to obtain the information, then that too is subject to prosecution. Discussion ensued regarding the complaint form and how much information is required and how far it will be investigated.

Mr. Rios opined that stricter penalties would deter the occurrence of frivolous or false complaints.

Mr. Bark quoted from the guidelines of Pima County whereby a valid complaint form must include:

complainant’s name, address, social security number, date of birth
employer’s name and address
address where alleged unauthorized work took place
name of unauthorized worker, address, date of hire, date of birth
description of the facts and circumstances that led the complainant to conclude that the employee is not authorized
description of the facts and circumstances that led the complainant to conclude that the employer knew that the unauthorized worker was not legal

Mr. Cook clarified that to establish an “intentional or knowing violation” there must be some factual basis, and the complaint form is asking for as much information as possible to provide a starting point for an investigation.

Ms. Strunk stated that a complainant must be able to articulate reasons (other than language or displaying flags or such) for believing that an employee is unauthorized. She then asked about the penalty for filing false information with the police; Mr. Cook replied that the false information statute lists a Class I misdemeanor.

Mr. Nye stated his belief that there is an anomaly here in the standard of proof: enforcing the statute is a civil matter, requiring a preponderance of the evidence, but a Class I is a criminal matter requiring proof beyond a reasonable doubt. Mr. Bark replied that federal law preempts state law and prohibits criminal enforcement of employer sanctions.

Chairman Weiers reminded the committee that two topics are being discussed: the act of hiring illegal workers and the act of false reporting.

IMPACT OF HB2779 (Laws 2007, Chapter 279) ON CONTRACTORS AND SUBCONTRACTORS

Mr. Nye, as a representative of Sun Construction Company, stated that he is very interested in the application of this law because finding skilled labor is a big problem; he explained that the median age of construction craft workers in 1988 was 33 years, and has now increased to 39 years. He opined that his biggest concern with this bill is the effect it may have on the industry as it tries to find skilled workers (Attachment 2).

Mr. Sanders asked how this law will apply to subcontractors.

Mr. Quinn explained that he does not know if he, as a contractor, would be in violation if one of his subcontractors hired unauthorized workers. He further explained that his company is incorporated in Delaware and only has franchises in Arizona.

Mr. Bark asked what “employment relationship” means and if independent contractors were excluded, as they are under federal law. Chairman Weiers added that his understanding is that E-Verify cannot be run unless the employer is hiring someone, not contracting that person.

Mr. Quinn stated that if a contract is signed at the corporate level, he does not know what business entity is to be shut down if an illegal worker is used by a subcontractor.

Ms. Strunk stated that she concurs, that language is needed to define the employment relationship, and that what works in the immigration context may not work in workers’ compensation context.

Ms. Clarke asked if an out-of-state employer is required to use E-Verify; Chairman Weiers stated that he thought not but that further research is needed.

Mr. Quelland asked if an employer could obtain a competitive advantage by circumventing the law and how can that be avoided; Mr. Bibee replied that the subcontractor issue is not clearly defined and is a very critical piece of this issue.

Steve Moortel, Policy Advisor to the Majority, addressed the out-of-state subcontractor issue and stated that E-Verify must be used if these three requirements are met:

the company transacts business in the state
the company holds a license issued by an agency of the state
the company employs one or more individuals to perform services in the state

DISCUSSION OF THE DEFINITION OF “KNOWINGLY” AS USED IN HB2779 (Laws 2007, Chapter 279)

Chairman Weiers introduced the topic of “knowingly” and distributed a document with information lifted from federal law (Attachment 3). He explained that federal law is very restrictive and that the only thing a state can do is lift the business license that it has granted. He discussed the impact of that single option.

Mr. Laird stated his concern with the constructive knowledge aspect of the law.

Chairman Weiers stated that “knowingly” is extremely hard to prove. He stated that this is the most difficult legislative issue in his experience and he reminded the committee that the goal here is to air views, not to solve problems. He stated that while he does not intend to run a bill, there may be recommendations from this committee that other legislators may incorporate into bills.

Mr. Sanders asked if the county attorneys have looked at or discussed the actual vs. constructive knowledge issue; Mr. Cook replied that constructive knowledge is imputed notice and can be used to prove actual knowledge and that the consensus appears to be that actual knowledge must be proved.

Mr. Laird stated that Mr. Cook’s approach is reasonable, but that the state incorporates federal standard with allows constructive notice to be “knowing”; he stated his concern that the statute does allow constructive knowledge to amount to a violation. Mr. Cook reiterated his belief that the standard will be actual knowledge.

Ms. Strunk asked who, in a large corporation, the knowledge is imputed to; Mr. Cook replied that he did not know the answer to that. Mr. Nye stated his belief that the knowledge is imputed to the corporation, not to an individual.

Mr. Bark stated that statute says that “knowingly” means constructive as well as actual knowledge.

Mr. Cook commented that circumstantial evidence indicating actual knowledge would mean that the consensus interpretation seems to be actual knowledge.

Mr. Bark spoke of affirmative defense if there was an innocent mistake while doing I-9s.

DISCUSSION OF AGENDA ITEMS FOR NEXT MEETING

Ms. Strunk suggested that the definition of “license” be taken up at the next meeting. Chairman Weiers added the definition of “professional license”.

Mr. Quinn requested that E-Verify be discussed as to how it affects a business which currently employs an unauthorized worker. Chairman Weiers stated that E-Verify is to be run on new hires only, and cannot be run on past and present employees. Mr. Quinn reiterated that his concern is identifying his liability if he has contractors and subcontractors which employ unauthorized workers.

PUBLIC TESTIMONY

There was none.

Without objection, the meeting adjourned at 4:49 p.m.

___________________________________

Jane Dooley, Committee Secretary

October 24, 2007

(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov/)

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AD HOC COMMITTEE ON BUSINESS OWNERS

AND WORK SITE ENFORCEMENT

October 24, 2007

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Members Present

Members Absent

Speakers Present