Immigration and Employers

Previously, I reviewed some of the provisions relating to illegal immigrants in Arizona’s recently signed immigration law 1070.  Today, I’ll review several items in the law relating to employers.

In the past few years, employers have been subject to a number of recent state initiatives to ensure that they are not hiring illegal workers.  Morgan, Lewis and Bockius, an international law firm, recently released a report detailing state immigration laws as they apply to employers. In recent years,  Congress has failed to enact clear immigration standards. Many states have enacted laws which specify employer responsibilities under federal immigration guidelines and give state officials and agencies clear authority to ensure employer adherence to Federal law.

The recently passed Arizona immigration law 1070 codifies into state law some specific details that would be in accord with Federal law and state penalties for anyone violating the law.  Many laws have two key features: the granting of authority, and the specification of penalties.  In short, power and money.

Section 5, paragraph A of the new Arizona immigration law 1070 makes it illegal for anyone to stop and hire people on the street but only if the motor vehicle “blocks or impedes the normal movement of traffic.”  Most cities have several locations where people of all types, both legal and illegal, can gather for day labor.  A contractor or homeowner pulls up, picks out as many people as they need who typically hop in the contractor’s or homeowner’s pickup or van and drive off to the job site.   As long as the contractor or homeowner pulls over to the curb and gets out of the flow of traffic, it is still legal in Arizona to hire people off the street, as long as they are legally allowed to work in the U.S.  More importantly, it gives a police officer authority to do more than simply give someone a traffic ticket for obstructing traffic when the police officer is well aware that there is a good chance that immigration laws are being violated. 

Section C make it specifically illegal for any illegal immigrant to “solicit work in a public place”.  Included in the  conventional legal definition of a public place is that it can be either public or private property.  This section of the law specifically prohibits illegal immigrants from soliciting work at a home improvement center.  More importantly, it gives police officers a clear legal authority on publicly accessible private property.  However, this section of the law does not explicitly prohibit a homeowner from hiring an illegal immigrant at a home improvement center.  That is contained in Section 6.

Most homeowners do not consider themselves to be an employer when they hire someone for a few hours.  A  definition of an employer is “A person or business who pays a wage or fixed payment to other person(s) in exchange for the services of such persons.” (

Section 6 prohibits an employer from “knowingly” employing an unauthorized alien.  That one word may protect a homeowner but it provides little protection for employers who are often held to a higher standard. Unlike other state laws, Arizona has at least specified in Section 6, paragraph I, what is clear evidence that an employer has not “knowingly” hired an unauthorized worker:  that the employer has used the Federal e-verify program to check the employee’s lawful status. Paragraph J provides the more usual non-specific protections found in law that an employer can “[establish] that it has complied in good faith” with the requirement of law.

Paragraph A of Section 6 also makes employers responsible for the legal status of any subcontractor’s workers.  Again, there is that legal keyword “knowingly”.  From my reading of the text, the general prohibitions largely follow existing federal guidelines but with specific penalties and forfeitures that convey the message loud and clear to employers, especially construction contractors, that Arizona means business when it comes to enforcement of immigration law.

Paragraph K and L of Section 6 details an employer’s affirmative defense of entrapment by law enforcement but the details are contradictory.  To establish entrapment, it is the burden of the employer to prove that law enforcement officers “urged and induced” (K3) the employer to commit a violation and that the employer was not already “predisposed” (L) to violate the law. Without a mind reading device, how does an employer prove that they were not “predisposed” to violate the law?  The employer must convince the court that the “idea of committing the violation” (K1) must have started with law enforcement.  Like other provisions of this law, the intent is to empower law enforcement, not protection of anyone’s rights, including employers.

Section 7 contains some rather severe penalties for Arizona employers who violate Arizona immigration law. Some are quite appropriate: an offending employer is ordered to terminate all other unauthorized aliens in its employ.   The more severe ones are found in paragraph F:  On the first violation, an employer has all its business licenses suspended for at least 10 days.  A second violation results in permanent revocation of all licenses (F2), essentially putting many offending employers out of business.

Arizona’s message to employers: WE MEAN BUSINESS.

Immigration Law

You can find lots of opinion about Arizona’s new immigration law, SB1070.  If you would like to form your own opinion, here is the text of the law.

Section 2 of the new law is getting a lot of attention and I’ll look at that today.  Subsequently, I’ll look at the impact on employers,as well as the general public, detailed in Sections 5 through 8 of the new bill.
Arizona Statutes, Title 11 is amended with Article 8. Section A of this article states (original text is all caps): “NO OFFICIAL OR AGENCY OF THIS STATE OR A COUNTY, CITY, TOWN OR OTHER POLITICAL SUBDIVISION OF THIS STATE MAY ADOPT A POLICY THAT LIMITS OR  RESTRICTS THE ENFORCEMENT OF FEDERAL IMMIGRATION LAWS TO LESS THAN THE FULL  EXTENT PERMITTED BY FEDERAL LAW.”  This section is aimed to prevent any city in Arizona from adopting a “sanctuary city” immigration policy.  Phoenix, AZ has adopted such a policy.  You can read a short history of sanctuary cities at Wikipedia.

Section B reads (highlights are mine): FOR ANY LAWFUL CONTACT MADE BY A LAW ENFORCEMENT OFFICIAL OR AGENCY OF THIS STATE OR A COUNTY, CITY, TOWN OR OTHER POLITICAL SUBDIVISION OF THIS STATE WHERE REASONABLE SUSPICION EXISTS THAT THE PERSON IS AN ALIEN WHO IS UNLAWFULLY PRESENT IN THE UNITED STATES, A REASONABLE ATTEMPT SHALL BE MADE, WHEN PRACTICABLE, TO DETERMINE THE IMMIGRATION STATUS OF THE PERSON. THE PERSON’S IMMIGRATION STATUS SHALL BE VERIFIED WITH THE FEDERAL GOVERNMENT PURSUANT TO 8 UNITED STATES CODE SECTION 1373(c).”  What is a lawful contact?  It is undefined by  Arizona state law but it could reasonably be construed to include people suspected of any minor infraction as well as witnesses to a crime or misdemeansor, or any person asking for help from a police officer.  What is “reasonable suspicion”?  In a 1968 case, Terry v. Ohio, the U.S. Supreme Court ruled that suspicion must be based on “specific and articulable facts” and not just a hunch.  In New York City at that time, the police had reasonable suspicion to stop and frisk a male  with long hair. I was one of many who endured these friskings while walking down the street or about to get on the subway.

Sections C, D, E concern the transfer and transport to federal custody of those who can not prove their immigration or citizenship status.  Paragraph F authorizes local and state communications with Federal agencies.

Section G reads in part (highlights are mine):  A PERSON MAY BRING AN ACTION IN SUPERIOR COURT TO CHALLENGE ANY OFFICIAL OR AGENCY OF THIS STATE OR A COUNTY, CITY, TOWN OR OTHER POLITICAL SUBDIVISION OF THIS STATE THAT ADOPTS OR IMPLEMENTS A POLICY THAT LIMITS OR RESTRICTS THE ENFORCEMENT OF FEDERAL IMMIGRATION LAWS TO LESS THAN THE FULL EXTENT PERMITTED BY FEDERAL LAW. The initial words of this section, “A person”, does not limit challenges to Arizona residents.  Anyone anywhere can file a challenge against the state of Arizona, a city or town in the state, and, if successful, the law requires that the state, city or town pay the court and attorney fees of the person bringing the action. (Paragraph G, Subsection 1)

Section I indemnifies police officers from any costs resulting from a judgment.

Tomorrow, I’ll look at how Sections 5 – 8 of this law affect homeowners and small employers in Arizona

Playing House

 NPR radio recently featured a show on Magnetar, a hedge fund that bought CDOs on mortgage backed securities (MBS).  For an in depth look at the MBS and CDO creation process and a clear, simple explanation of what a tranche is, you can can read the several part article at Pro Publica’s web site.

Federal Philanthropy

The tea party, Libertarians, and conservatives of both the fiscal and social ilk have made repeated calls for “limited government”, meaning the federal government.  In detail, what does limited government mean?  As always, the devil is in the details.

Below are several federal grants to the states that the federal government has no business being involved in – in my opinion.  Many of these are good programs but simply do not need to be administered at the federal level.  However, the federal income tax brings the money from individuals to the federal government where the power brokers in Congress and the lobbyists decide on how to dole it back out to the states and individuals, which is where the money came from in the first place.  Countless federal agencies dilute that tax money before it gets doled out.  The complete list is here.

These are 2007 figures, rounded to the nearest billion dollars:
Medical Assistance Program $203B – the states can take care of this on their own.  Why do the Feds need to get involved?

Unemployment Insurance $36B – We already have state unemployment.  Federal unemployment kicks in when a state runs out of money or the Congress decides to extend benefits.  Why can’t the states simply charge more and let’s get the Feds out of the picture.

Supplemental Nutrition Assistance Program – $30B.  Are the states so incompetent at administering their own affairs that the Feds have to step in on this?

Temporary Assistance for Needy Families (TANF) $16B – Instead of helping needy families in our own states, our tax money helps families in other states.  Federal employees working in Health and Human Services (HHS), not state agencies, get to decide who is deserving of this assistance and who is not.

Federal Pell Grant Program $14B – are the states really that bad at managing the educational needs of their residents that we need the wisdom of a federal agency to administer this needs-based program for college and graduate students?

Title 1 Grants $13B – here’s another program where big daddy in Washington, DC helps the states help disadvantaged school children.  Evidently the states suck at this too.

Special Education Grants $11B – this federal program for disabled school children helps states who evidently weren’t taking care of these less fortunate kids.  Why bother having any state governments?  Evidently, most state governments are incompetent and need federal help.

National School Lunch Program $8B – the states can’t even adequately feed the kids who attend school in their state.

Head Start $7B – this program for pre-schoolers is needed because the states can’t take care of their own.

State Children’s Insurance Program (SCHIP) $6B – another example of the feds having to step in because there was a perceived need that the states weren’t taking care of.

Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) – $6B – more nutritional help for the states, who can’t do anything right.

Federal Transit Formula Grants $6B – urban taxpayers pay most of the federal income tax in this country so this is a way for the Feds to give back some of that tax money to the cities to help them get their residents to and from work so that those residents can continue to foot the Federal tax bill.

Foster Care Title IV-E $5B – another great program to help foster kids but why does it need to be at the federal level?

Above are only several of the 160 or so federal programs that are listed on 4 pages in this report from the Census Bureau.  Maybe we should disband all the states and become one state run by the folks in Washington, DC.  We would get rid of a lot of duplicate state agencies, who are evidently incompetent or negligent.  Then, when I call my state governor’s office, they will answer the phone “Hello, this the Colorado Division of the Executive Branch of the U.S. Government.”  That is where we have been slowly heading for the past half century or more.  I hope that we will take another road.  I don’t like what I see up ahead on this road.

March Unemployment

A few days ago, the Bureau of Labor Statistics (BLS) released their state by state unemployment report for March and it is uglier than the proverbial junkyard dog.  The stock market is only 8% below its level of 3 years ago, before the loss of over 8 million jobs.  If you live in one of the worst hit states – California, Nevada, Michigan, Florida, Rhode Island and S. Carolina – the real unemployment, or U6 rate, is probably over 20%.  That rate includes people working part time because they can’t find a full time job and those who have given up looking.  Here’s the ugly picture based on data from the BLS.  Click to enlarge.

Consumer Price Index

The Consumer Price Index is a yardstick of changes in everyday expenses. It is used to recalculate Social Security payments each year and governs a wide range of employment and union contracts, affecting the paychecks of millions of Americans. 

How it is measured is a source of disagreement among economists.  The task of trying to replicate the buying habits of a country is difficult, almost as difficult as picking a winning bracket in the NCAA basketball tournament.  There are a number of CPI measures but the CPI-W is the one most widely quoted.  This index aims to replicate the cost of living for urban wage earners and clerical workers.  Even though many seniors are not working, the cost of living adjustment (COLA) for their Social Security check is based on this index.  Since the 1980s there has been a separate index, the CPI-E, that more accurately reflects costs for seniors, but it has not been adopted for one simple reason – cost.  Rising health care and housing costs for seniors make this index about 1% higher than the commonly used CPI-W.  

Although the index includes computer software and accessories, the cost of computers themselves do not seem to be covered.  That cost has dropped dramatically.  As I was cleaning out some files, I came across this nugget of nostalgia from a computer magazine in 1996.  Below you will see a “Desktop Workhorse” probably designed for a small businessperson and priced at over $2300 for a computer that is 1/10th as powerful as a cheap $500 computer today. (Click to enlarge)