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State Immigration Legislation Update: South Carolina and Arizona

Monday, May 12, 2008

(American Meat Institute)

The South Carolina Senate has introduced a new employment verification system, SC-Verify. It is a paper-based system subject to random audits and supported by South Carolina business groups. If the bill passes, new verification requirements would begin in July 2009 for employers with 100 or more workers and extend to smaller employers in 2010.

The measure allows for  citizen complaints to  be made against employers alleged to be hiring unauthorized workers. These complaints must be in writing and signed.

Three other components of  the new law include: 1. Legal U.S. workers would have a statutory right to sue if they were fired and replaced by an unauthorized immigrant; 2. Wages over $600 paid to unauthorized workers could not be counted as business expenses; 3. Employers would be required to withhold 7 percent of an independent contractor's wage if the employee did not provide a valid tax identification number.

Companies found to be employing unauthorized workers would be penalized for each worker on the payroll in the amount of $2,500 for the first offense, $5,000 for the second and $10,000 for a third violation. An employer could also be sentenced to up to five years in prison if convicted of helping a worker obtain false documents.  Lawmakers are expected to debate the legislation in coming weeks.

Meanwhile, in Arizona, Democratic Gov. Janet Napolitano signed a bill last week amending enforcement legislation that passed last year but is now tied up in federal court.

The most significant change in this year's enforcement measure clarifies the uncertainty in last year's law about when employers are required to use the federal E-Verify system to check workers' employment eligibility. According to the new law, only workers hired after January 1, 2008 must be checked through the E-Verify system.

The new measure also establishes a program that would provide protection for  employers from the punitive penalties in last year's law - sanctions that would effectively shut down businesses found to be hiring unauthorized workers by suspending and then revoking their business licenses.  The amended law clarifies how the state's employer sanctions apply to businesses with multiple locations.  Under the new measure, immigration violations at separate branches or offices of a larger company will not necessarily have consequences for other branches.

This year's measure also introduces a new provision supported by business groups that target employers operating in the cash economy. Last year's measure did not differentiate between employers making good-faith efforts to avoid hiring unauthorized workers and those who blatantly bypass the law in order to exploit a foreign labor force. The new statute imposes additional penalties on employers who pay in cash and fail to keep a paper trail for all employees.

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