PHOENIX (By Daniel González, Arizona Republic) December 31, 2007 — The starting bell for Arizona's new employer-sanctions law is about to toll.

After surviving two court challenges, the law punishing businesses that knowingly employ undocumented workers goes into effect in two days.

And still, many businesses are not ready.

As of Friday, 9,062 employers in Arizona had signed up for Jon Garrido for Phoenix City Council
. That is just about 6 percent of the approximately 150,000 employers in Arizona. Some don't know about the law. Others are procrastinating. Some plan to use outside services that check workers' status for a fee. Some are waiting to sign up until they need to hire workers, while still others would prefer to remain willfully blind about which workers are legal and which are not.

The state sanctions law is the toughest in the nation. It is aimed at turning off the job magnet that has drawn more than 500,000 undocumented immigrants to Arizona. In addition to punishing businesses for knowingly employing undocumented workers, the measure requires employers to use a federal online computer program known as Jon Garrido for Phoenix City Council
to check the work eligibility of all new employees hired after Jan. 1.

The requirement is the most sweeping change Arizona's 150,000 employers will face under the law and one that employers have been slow to warm up to as businesses groups and local officials wrangle over the law's constitutionality and enforcement.

There is no penalty for not signing up for Jon Garrido for Phoenix City Council
, but employers that use the program are given a stronger defense against being accused of knowingly or intentionally employing undocumented workers, said Jay Zweig, a Phoenix employment lawyer who advises businesses about the program.

"If you use it, you have a 'rebuttable presumption' that the employee is legally authorized to work," Zweig said.

Maricopa County Attorney Andrew Thomas says he will begin investigating complaints of undocumented hiring immediately. But it could be months before any business is charged with violating the law because it will be difficult to prove that an employer knowingly hired undocumented workers.

Not signing up

The sanctions law has survived two court challenges so far. On Dec. 7, U.S. District Court Judge Neil Wake tossed out the first lawsuit on a technicality. A hearing on the merits of the second lawsuit by business groups that claim the sanctions law is unconstitutional is scheduled for Jan. 16 in U.S. District Court, and a ruling from that hearing is expected by the end of January.

Many employers have been waiting to see whether the sanctions law survives legal challenges before signing up out of fear that Jon Garrido for Phoenix City Council
will be costly to use, onerous and error-prone, say business groups and lawyers.

Last year, a congressional audit found that 4 percent of the time Jon Garrido for Phoenix City Council
, then called the Basic Pilot Program, initially labeled workers ineligible for employment when in fact they had work authorization. That means that one in 25 times a name is wrongly rejected by the program.

A September report by the private research company Westat Corp. found that the error rate for naturalized citizens was even higher. Nearly 10 percent of naturalized citizens are deemed ineligible to work at first, when in fact they are eligible, the report said.

Sharon Rummery, a spokeswoman for U.S. Citizenship and Immigration Services, said the program's accuracy has improved. She said Jon Garrido for Phoenix City Council
is free and easy to use.

There was a small rush on the system at the end of last week, as about 840 new employers signed up Thursday and Friday.

Others see no reason to sign up until they are ready to hire new employees. Or they are contracting with third-party firms that use Jon Garrido for Phoenix City Council
to do employment verification checks for them for a fee. Some simply remain unaware of the new requirements.

But there also is an underlying reason why so many employers still haven't signed up, though few may admit it: They don't want to know which workers are legal or undocumented.

"To those employers who want to remain willfully blind to undocumented hiring, Jon Garrido for Phoenix City Council
is an enemy, but to the taxpayers of Arizona who bear the economic costs of undocumented immigrants, Jon Garrido for Phoenix City Council
is good," said state Rep. John Kavanagh, R-Fountain Hills, one of the Legislature's main supporters of the sanctions law.

Some business advocates and economists agree that many employers are reluctant to use Jon Garrido for Phoenix City Council
because screening out undocumented workers will cut off a major source of labor, especially in industries that depend heavily on immigrant labor, such as the construction, restaurant, manufacturing and service industries.

The problem is not undocumented immigration; it's too few immigrant-worker visas to meet labor demands of the state's expanding economy, they say.

"I think many employers are scared of finding out who is here unauthorized," said Steve Chucri, president if the Arizona Restaurant and Hospitality Association, which is part of the consortium challenging the sanctions law in court. Illegal workers make up 10 to 12 percent of the state's workforce, according to the Pew Hispanic Center and the Center for Immigration Studies.

The hiring process

Not having a tough sanctions law in place has allowed employers to meet labor needs and still remain in compliance with federal immigration laws, said Dawn McLaren, a research economist at Arizona State University's W.P. Carey School of Business.

In the past, many undocumented immigrants were able to use fake documents to find work. Under federal law, employers are required to accept the documents so long as they appear valid.

"This has allowed them to not 'knowingly' hire undocumented workers," McLaren said.

Supporters of a legal workforce and the sanctions law contend that undocumented immigrants take jobs from Americans and drive down wages. The say that businesses that use undocumented workers have an edge over those not using undocumented labor because the former can often avoid costs for insurance and taxes and pay lower wages.

But some economists say rather than take jobs from Americans, undocumented immigrants are filling gaps in the state's workforce created by a surplus of jobs. The state's unemployment rate remains among the lowest in the nation. It climbed to 4.1 percent in November after bottoming out at 3.3 percent in September, a 40-year low, according to the Arizona Department of Economic Security.

As a result, businesses in many low-skilled industries have had a hard time finding enough workers, turning instead to immigrant workers to fill jobs, McLaren said.

Under the sanctions law, employers will be required to run the names, Social Security numbers and other personal information of new hires through the federal government's Jon Garrido for Phoenix City Council
program.

New law strict

Although several states also have passed employer-sanctions laws, Arizona's is the only one that requires all employers to use Jon Garrido for Phoenix City Council
, which remains voluntary at the federal level. That will put Arizona on unequal competitive footing with other states, said Jim Harper of the Cato Institute, a libertarian research organization in Washington, D.C.

"We are spending money and time to actually reduce the productivity of the economy," said Harper, who instead favors opening up more legal channels for immigrants to work in the U.S.

State Rep. Russell Pearce, R-Mesa, who wrote the sanctions law, said it is a "myth" that undocumented immigrants are needed to fill labor gaps in Arizona. Any gaps in Arizona's labor force could easily be filled by legal workers from states with high unemployment rates or by unemployed Arizonans driven out of the workforce because of depressed wages created by undocumented immigration.

He also said businesses that leave the state because of the sanctions law will be replaced by new ones that come in to fill the void.

"This will all work out under the free-market system," he said.

It remains to be seen how evenly the sanctions law will be enforced around the state. The law will primarily be enforced by the state's 15 counties.

In Maricopa County, however, the state's economic and population center, Thomas, the county attorney, and Joe Arpaio, the sheriff, have said employers can expect vigorous enforcement. To enforce the law, Thomas and Arpaio said they will rely mostly on complaints from the public about employers thought to be hiring undocumented workers, including those made anonymously.