New State Immigration Compliance Mandates Include Harsh Penalties for Non-Compliance

On June 9, 2011, and after more than a half decade of attempting to do so, Alabama joined numerous other states by enacting a state immigration enforcement law, "the Beason-Hammon Alabama Taxpayer and Citizen Protection Act" (the "Alabama Immigration Law"). The state law was enacted at a time when employment authorization compliance measures are at an all-time high: the Immigration and Customs Enforcement Office (ICE), the principal investigative arm of the U.S. Department of Homeland Security (DHS), conducted audits of more than 2700 companies in fiscal 2010, nearly double that of the previous year, and levied a record $7 million

The Alabama Immigration Law is considered by both its supporters and critics to be one of the toughest in the nation and was enacted just weeks after Arizona's state immigration enforcement law survived Constitutional scrutiny before the United States Supreme Court. Alabama's law contains a number of requirements intended to both empower law enforcement and limit economic and other incentives that encourage illegal immigration. Employment opportunity is the leading incentive for illegal immigration and we have regularly noted in our training seminars that employers are easy targets for the federal and now state enforcement entities. Among other provisions, the Alabama Immigration Law echoes federal law and makes it illegal (1) for undocumented aliens to be employed in Alabama and (2) for Alabama employers to employ undocumented workers. Although these requirements duplicate federal requirements, significant state criminal and civil monetary penalties are added to the federal punitive scheme.

In addition to reiterating the federal requirements, the Alabama Immigration Law includes additional requirements for Alabama employers. Effective September 1, 2011, (the effective date for most provisions of the law) an employer is prohibited from either failing to hire an applicant who is a legal worker or discharging a legal worker, while otherwise retaining or hiring an employee that the employer knows, or reasonably should have known, is an illegal worker. Similar to the law in neighboring Mississippi, an aggrieved applicant or discharged employee has a private cause of action - i.e., a new employment cause of action - against an employer for violating this section and can recover attorneys fees and costs subject to certain limits. In an interesting departure from current standards that might discourage frivolous suits, the statute requires that the losing party pay the other party's attorneys fees up to the amount paid by the prevailing party and both sides must declare their attorneys fees prior to a verdict being rendered.

State contractors, defined in the law as any employer who receives "any contract, grant, or incentive" from the state or "any state-funded entity" must participate in DHS's electronic employment authorization (E-Verify) program beginning January 1, 2012. Effective April 1, 2012, the E-Verify mandate is extended to all Alabama employers. Unlike the immigration enforcement laws in other states, there is no exception for smaller employers. Rather, by December 1, 2011, the Alabama DHS must create and maintain an "employer agent service" for all Alabama employers with 25 or fewer employees to use the E-Verify program. Although E-Verify is free to employers, the new mandate adds an additional step to the employer's on-boarding process. The use of E-Verify does come with certain advantages including that, similar to federal law, an employer's good faith compliance with the E-Verify program affords the employer a defense to establish that it did not knowingly hire or employ an illegal worker and likely will also immunize an employer from liability in a state court lawsuit brought by an aggrieved applicant or discharged employee. It is important to note that the E-Verify requirement applies to new employees

Effective April 1, 2012, state law will join federal law and prohibit an employer from "knowingly" employing an illegal worker. "Knowingly" includes both actual knowledge and constructive notice, i.e., circumstances where an employer should be "reasonably aware" that it is employing an illegal worker. The Alabama Immigration Law adds penalties to those currently in place under the federal system: upon a first violation, a court must order, among other things, that the appropriate state agency suspend the employer's business license for up to ten days and place the employer on a three-year probationary period with accompanying reporting requirements to the local District Attorney's office. A second violation results in the permanent revocation of all business licenses/permits at the location where the illegal worker performed work. A third violation results in permanent revocation of licenses/ permits for all of the employer's Alabama locations. The Alabama Immigration Law includes provisions by which contractors can insulate themselves from liability for their subcontractors' failure to comply. Compliance with these provisions will be of particular importance in industries, including construction, where there is a heavy reliance on subcontractors.

Similar to reaction in other states, various civil rights groups, including the ACLU, have indicated that they will sue challenging the constitutionality of the Alabama Immigration Law. In the meantime, it is apparent that the law's sweeping requirements, particularly E-Verify compliance, demand the attention of Alabama's managers and HR personnel to plan for compliance well in advance of the effective date. Please watch for notice of an educational webinar from Lehr Middlebrooks & Vreeland in the near future. In the meantime, please contact any member of the Lehr Middlebrooks team with any questions.