On May 26, 2011, the Supreme Court upheld Arizona’s recent law that imposes sanctions on employers who “knowingly or intentionally” employ undocumented workers and requires employers to use federal government’s E-Verify program to verify the status of its workers. One of the sanctions contained in the Arizona law allows, and in certain circumstances, mandates, the suspension or revocation of the business “license” of violating employers. “License” is defined under the Arizona law as any authorization that is issued for the purposes of operating a business in Arizona and includes articles of incorporation, certificates of partnership, articles of organization, and grants of authority to companies organized outside of Arizona to transact business in Arizona. The suspension or revocation of a these types of formation documents or authorizations can ultimately deprive a company of its separate legal existence which can have numerous adverse affects on the company, including the inability to enter into contracts or file lawsuits.
Originally implemented in 1997, E-Verify is an internet-based free program operated by the Department of Homeland Security that provides employers with a way to verify an employee’s work-authorization status. It compares information from an employee’s I-9 form to data from federal records and informs the employer whether it matches up. In the case of a mismatch, the employer is alerted and the employee is allows to continue working while the problem is resolved, provided that they must contact the appropriate agency to resolve the mismatch within eight (8) work days.
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