•Section 2(B) requires local law enforcement to verify the immigration status in any lawful stop, detention, or arrest any time in which they have “reasonable suspicion” that someone is unlawfully present.  This has been labeled as the “show me your papers” provision;

 •Section 6 authorizes warrantless arrests for individuals presumed (based on “reasonable suspicion”) to have committed a deportable offense;

 •Section 3 creates a state crime for failure to carry immigration status papers at all times (this provision mirrors a longstanding but seldom enforced federal law); and

 •Section 5 creates a state criminal penalty for those found working while unlawfully present. 

Enforcement of these four contested provisions of the law, officially known as the Support Our Law Enforcement and Safe Neighborhoods Act, had been enjoined by a temporary injunction issued by the US District Court for the District of Arizona in 2010.  The Court declared that three provisions were preempted by federal law and cannot be enforced.  However, the controversial “show me your papers” provision, requiring state officers to make a “reasonable effort” to determine the immigration status of anyone they stop, detain or arrest, and as to whom there is “reasonable suspicion” of unlawful presence in the US, was not found to be preempted by federal law and will now be enforced by Arizona law enforcement officers.  For additional details regarding the case, see our recent alert [pdf].

How this law will be enforced is the subject of much discussion and controversy. In fact, in its majority opinion, the Court indicated that its decision does not foreclose other preemption and constitutional challenges after the law goes into effect.  Shortly after the decision, a spokesman from the Maricopa County Sheriff’s office declared that officers will not be expected to allow contact with ICE to impede investigations, and communication with federal officials will not mean suspects are unnecessarily detained.   Phoenix Police Chief Daniel Garcia attempted to make similar reassurances declaring that Phoenix was prepared to “err on the side of protecting civil rights.”  Moreover, US Attorney General Holder indicated that the federal government is going to be watching how Arizona and other states implement the “show me your papers” laws.  In a post-decision statement, he stated:  

I want to assure communities around this country that the Department of Justice will continue to vigorously enforce federal prohibitions against racial and ethnic discrimination.  We will closely monitor the impact of S.B. 1070 to ensure compliance with federal immigration law and with applicable civil rights laws, including ensuring that law enforcement agencies and others do not implement the law in a manner that has the purpose or effect of discriminating against the Latino or any other community.

Although the case addressed only Arizona’s law, many states are impacted by the decision as they have enacted or are considering similar legislation.  Alabama, Georgia, Indiana, South Carolina, and Utah have all passed laws modeled after S.B. 1070.  Further, 24 other states have similar bills introduced in their legislatures.  Although the ultimate fate of these laws has not yet been completely determined, any provisions modeled after Sections 3, 5(C), and 6 of S.B. 1070 are unlikely to be enforced. 

In the wake of the decision, employers should be aware that although states cannot create new immigration laws or attempt to bolster the penalties for existing federal immigration laws, many states can and will encourage their police to determine the immigration status of individuals who are detained.  Moreover, several states can be expected to push the limits of this ruling, encouraging their officers to enforce existing federal law under the auspices of consultation and communication with the federal government.  In addition, last year’s Supreme Court decision in Chamber of Commerce v. Whiting  upheld state enactment of laws requiring employers to register with the federal government's web-based E-Verify program for I-9 employment authorization verification purposes.  At present, 9 states require (or are in the process of implementing legislation that will require) private employers to register in E-Verify and another 6 states require state contractors to register.  Employers should ensure that they are complying with all federal laws and E-Verify requirements, especially when employing foreign national employees in states that have enacted immigration legislation and E-Verify requirements.   

However, not all is lost when it comes to employment-based visas.  Employers still have options to get through the second half of the calendar year with the following:

Cap exempt H-1B petitions may still be filed.  This includes extension, amendment or change of employer filings for current H-1B holders.  In addition, certain non-profit petitioners that are or affiliated with institutions of higher education or research may be exempt from the Cap as well as foreign national physicians that have obtained a J-1 waiver. 

• There are still cap subject H-1B1s for Singaporean and Chilean nationals;
• E-3 visas are also available for Australian nationals;
• NAFTA (TN) visas have no limit for nationals of Canada and Mexico;
• Many graduating foreign national students are eligible for Optional Practical Training (OPT) work authorization which can last from 1 year to 29 months for “STEM” graduates of US institutions whom are hired by employers enrolled in E-Verify.  These students may be eligible to change to an H-1B next year;
• Employers may utilize interns or trainees under various J visa exchange programs;
• Multinational or treaty investor/trader employers may take advantage of the L-1 or 
  E-1/E-2 visa for eligible executive, manager, supervisor, specialist or essential skills employees; and
• Employers hiring individuals who are considered extraordinary or outstanding in their respective field may be eligible for an O-1 visa. 

To paraphrase Emily Dickinson, we will dwell in the Possibility. 

What is this case about and what does it mean for employers doing business in Arizona and other states that have adopted similar legislation?

The case arose from the State of Arizona’s appeal of an injunction blocking four parts of the immigration law.  The four provisions are summarized as follows: 

• Requiring local law enforcement to verify the immigration status in any lawful stop, detention, or arrest any time in which they have “reasonable suspicion” that someone is unlawfully present.  This  has been labeled as the “show me your papers” provision;
• Authorizes warrantless arrests for individuals presumed (based on “reasonable suspicion” ) to have committed a deportable offense;
• Creates a state crime for failure to carry immigration status papers at all times (this provision mirrors a longstanding but seldom enforced federal law); and
• Creates a state criminal penalty for those found working while unlawfully present. 

While reading the oral argument tea leaves is never a foolproof way to predict the likely outcome of a case before the U.S. Supreme Court, the majority of commentators and court observers seem to conclude that the first two provisions have the strongest chance to survive constitutional scrutiny.  The impact of such a holding could be significant because states such as Alabama, Georgia, South Carolina and Utah have enacted similar provisions.  Moreover, a ruling in favor of Arizona is likely to lead to further proliferation of state immigration laws.

Should the Court uphold any of the four provisions, then individuals and employers alike will be put on notice that state immigration law is here to stay.  Such an interpretation would be an extension of last year’s Supreme Court decision in Chamber of Commerce v. Whiting which permitted state enactment of laws requiring employers to register with the federal government's web-based E-Verify program for I-9 employment authorization verification purposes.    As the well-publicized arrest of a legal foreign national auto executive in Alabama for failure to carry immigration papers demonstrated, those visiting and conducting business in multiple states will have yet another set of divergent laws to follow. 

Assembly Bill 1136: IIPP Update for Health Care Facility Employers (Effective Jan. 1, 2012):  AB 1136 [pdf] requires a health care facility employer to update its injury and illness prevention programs to adopt and include safe patient handling policies meaning that the IIPP should include patient protection and health care worker back and musculoskeletal injury prevention plans.

Assembly Bill 22:  Limitations on Employee Screening in Employment (Effective Jan. 1, 2012):  Previously, California law generally allowed employers to request credit reports for employment purposes so long as written notice was presented to the applicant or employee for whom the report was sought.  AB 22 [pdf] now prohibits employers and prospective employers from using consumer credit reports to screen applicants or to make other personnel decisions.

Eight positions are exempted from this requirement including certain financial institutions, managerial positions (those which qualify for the executive employee overtime exemption), law enforcement positions, positions that involve sensitive information or access to $10,000 or more of cash including where the employee would be a named signatory on the employer’s bank or credit card account or otherwise be an agent in financial transactions, and positions for which credit information is otherwise required by law to be disclosed or obtained. If an exception applies, the employer must provide the employee or applicant with written notice specifying the basis for requesting the report, informing the person of the source of the report, and providing a box to check to request a free copy of the report.

Senate Bill 757: Discrimination in Health Insurance for Domestic Partners (Effective Jan. 1, 2012):  Under the California Insurance Equality Act, insurance companies must provide the same coverage for registered domestic partners as for spouses. SB 757 [pdf] closes a gap in that law as, for the past several years, out-of-state policies issued to employers who maintain their principal place of business and the majority of employees outside the state did not provide the same benefits to registered domestic partners.  Now, every group health insurance policy provided to a California resident, regardless of where the contract is entered into, must offer equal coverage for spouses and registered domestic partners.

Assembly Bill 1236:  Limits on Employer Use of E-Verify (Effective Jan. 1, 2012):  Under AB 1236 [pdf], the “Employment Acceleration Act of 2011”, California employers cannot be required by a state, city, county, or special district, to use a federal electronic employment verification system (specifically E-Verify) to verify their employees are authorized to work in the United States in order to receive a government contract or obtain a business license, or as a penalty for violating licensing laws.  There are certain exceptions, for instance when the employer is required by federal law to use E-Verify or as a condition of receiving federal funds.  The stated purpose of the law is to save employers costs and expenses.

Assembly Bill 1401: Minors in the Entertainment Industry (Effective immediately):   Currently, the labor commissioner must furnish his or her written consent in order for a minor under the age of 16 to participate in certain projects.  AB 1401 [pdf] establishes a temporary work permit program for minors in the entertainment industry, to be administered by the Labor Commissioner, that allows the parent or guardian of a minor performer to obtain a temporary permit for the minor's employment under certain circumstances.

And A Few Were Actually Vetoed!!   Some may find it instructive to see some key bills the Governor did veto.  Probably most notable was AB 325, a bereavement leave bill that would have prohibited employers from refusing to grant employees up to three days of unpaid bereavement leave.  The Governor noted that the vast majority of employers already voluntarily provide such unpaid leave, but codifying the practice would have created yet another private right to sue.  Similarly, the Governor vetoed SB 931, which would have authorized payment to employees using a payroll card on the ground that the law would have created costly, complicated new requirements for use of payroll cards by employers.  The Governor also vetoed AB 267, which would have made choice of law provisions in employment contracts void as a matter of public policy, on the ground that California law already prohibits application of laws that substantially diminish California employees' rights.

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Shortly after the Court’s decision was published, House Judiciary Committee Chairman Lamar Smith announced that he would introduce a mandatory E-Verify bill. This bill, titled the "Legal Workers Act" [pdf] (H.R. 2164), was rolled out this past Tuesday.  It would modify the voluntary E-Verify program by mandating a new Employment Eligibility Verification System (EEVS) nationwide. The largest employers would be required to use EEVS within six months from enactment while most employers would have to comply within two years. Agricultural employers would be given a three year reprieve from compliance after enactment. This bill would also make significant changes to the I-9 compliance and employer sanctions laws including a tenfold increase in some fines, criminalizing misuse of a social security number or other documentation, expanding the Social Security Administration’s enforcement duties, and providing safe harbor protections for employers from liability for unauthorized employment if actions were taken in good faith reliance on EEVS.

A second bill, introduced by Representative Zoe Lofgren who hails from Silicon Valley, California, would foster highly skilled immigration and entrepreneurial investment.  Entitled the Immigration Driving Entrepreneurship in America (IDEA) Act 2011(H.R. 2161), this bill would help U.S. companies attract and retain highly skilled foreign graduates from U.S. universities who studied in the “STEM” fields of science, technology, engineering and math by easing current restrictions to applicable nonimmigrant and immigrant visa categories.  The bill would also establish a new green card program for entrepreneurs who are able to secure venture capital funding or who establish a business that creates jobs for U.S. workers.  It would also free up  more green cards by exempting dependents and outstanding researchers and professors from the current quotas while eliminating employment-based per country limits and recapturing hundreds of thousands of green cards that went unused in prior fiscal years.  On the flip side, it would implement additional restrictions to the H-1B and L-1 visa categories by imposing new prevailing wage, attestation and recruitment requirements. 

What should employers do while Congress engages in the proverbial backyard squirt gun fight over immigration and employer sanctions policy?   If you do business as a federal contractor or in one of the states which mandates E-Verify such as Arizona, Utah, Mississippi, South Carolina (and soon to include Alabama and Georgia), then consult with counsel to determine if your organization should register in E-Verify.   Otherwise, get ready to weather the Summer “ICE” storms.  The Department of Homeland Security, Immigration Customs Enforcement (ICE) just announced that another 1000 companies will be audited for I-9 and immigration compliance.  Therefore, employers should ensure their “house in order.”  For more information on preparing for and responding to an ICE Notice of Inspection (NOI), see our March 3, 2011 post. 

Despite this, foreign investors have traditionally had serious difficulties in getting established in Spain, due to rigid immigration laws that seek (sometimes seemingly without sense or logic) to protect its own employment market.  These laws, and their strict and subjective application by the Immigration Authorities, can easily be argued to block the entry of foreign capital and therefore actually to damage Spain’s national economy.

When a company applies for a work and residence permit in Spain, the Immigration Authorities will consider the national employment situation.  Taking this into account – especially during this recession – means it is really difficult to obtain a permit.  The applicant company has to put the job into the local market and then must be able to show that there were no Spanish candidates who could fit the job description.  In practice this is very difficult – fitting the job description is often a question of degree, sometimes forcing companies to take on people who may be technically adequate but are still not as expert as could be found externally.  

Perhaps in recognition of this, from 30 June the law will introduce a new procedure “authorising the entry, residence and work of foreigners in Spain whose profession meets the country’s economic, social or labour demands, or who intend to undertake research or developmental or educational work which requires highly qualified personnel, or who will carry out performances of special cultural interest”.  If a company can show that the role satisfies these criteria it will not then have to demonstrate that there are no Spanish candidates who would fit the job description. 

My preliminary thoughts are that these reforms will be insufficient to achieve their stated aims.  Why?  Mainly because the new legislation will be limited to:

• so-called “large and medium companies”, namely those with either (i) over 500 workers in Spain; (ii) investments in Spain of over 200m Euros or net shareholders with equity of over 100m Euros; or (iii) investments into Spain of at least 1m Euros per annum, funded entirely from abroad;  
• medium and small companies in limited strategic areas: information and communications technology, renewable energy, environment, water and water treatment, health sciences, biopharmaceuticals, biotechnology, aeronautics and aerospace; and 
• companies that can prove that hiring a particular manager or highly qualified individual is part of a business project that is in the public interest because it will result in (i) a significant increase in the number of jobs at the company applying for the permit; (ii) a significant increase in the number of jobs in the company's particular sector or geographic area; (iii) a significant financial investment with a positive socio-economic impact in the company's geographic area; or (iv) a relevant contribution to a scientific and/or technological innovation.

Let's see if in practice this new legislation can help foreign investors do business in Spain.  At least it's a starting point and a move forward from the previous legislation. Enough to reverse the recession? Time will decide…

The thinking was that the verification process would operate mostly through USCIS reviewing the applicant company’s Dun & Bradstreet records.  However, even after submitting that record and much other data besides, recent experience suggests a high likelihood of receiving nonetheless a lengthy Request For Evidence asking for more documents than Carter has liver pills.  The RFE usually states that USCIS has found “inconsistencies” between the corporate information you provided in your petition and the D&B report it is looking at.  You ponder, how can that be?  After all, you consulted your client’s D&B report in preparing its visa petition, and perhaps even attached that report as an exhibit.  There were no inconsistencies at that stage.  Could USCIS possibly be looking at something different?  Does D&B have another corporate report it creates only for USCIS that is not available to its paying clients?

So you set out on this Sherlock Holmes adventure, only to discover that D&B have never heard of the VIBE programme and, with the best will in the world, are simply at a loss as to how to help you.  Why not ask USCIS to provide you with its VIBE D&B report so that you can compare the two?  It would seem only common sense that before the client is put through all the expense of collecting the additional documentation requested (even though its petition satisfied all the regulatory and legal requirements for the visa), USCIS should share the report upon which its RFE is premised.  But then again, the cynics might ask, is common sense necessarily the touchstone when dealing with Immigration law and regulations?

Good luck.  It is too soon to know how USCIS will respond.  In the meantime, we have little choice but to respond to the RFE and to advise our clients that updating their D&B reports to remove the scope for inconsistencies created by the passage of time is not really an option.  In not very veiled terms, USCIS warns in its RFE letter that while it cannot require our corporate client to update its D&B report, not doing so “will” (not even may) affect any of its future filings.  A lesson there for us all, I think.

The audits consist of Notices of Inspection (NOI) or administrative subpoenas which command employers to produce, generally within no more than three business days, the I-9 employment eligibility verification form for all their active employees and those terminated within the past 1 to 3 years.  They can also require:

• payroll reports;
• quarterly tax statements (IRS 941);
• prior correspondence from the Social Security Administration relating to social security number no-matches; and
• evidence of participation in E-Verify or the Social Security Number Verification System.

 After you receive a NOI or subpoena, remember:

• ICE must provide at least 3 days’ notice to inspect I-9s.
• Production of documents other than I-9s is voluntary unless served with a subpoena.  A subpoena can be challenged in Federal court. 
• Notify management and contact outside counsel immediately.
• Do not alter or dispose of any I-9s.

 What to do now:

• Review or establish an I-9 compliance policy.
• Conduct an internal I-9 audit.

Considering that I-9 related fines can range from $110 to $16,000 per violation and that the Government can also prosecute for criminal violations, retaining specialist outside counsel to assist with an audit or a compliance program is not only prudent but also cost effective.