From the perspective of Missouri employers, House Bill 1549, an attempt to rein in illegal immigration, was one of the most significant pieces of legislation passed this session.

The bill, a dense 18 pages at its final passage, packed in many provisions from other bills that had been debated during the legislative session. During the spring, the Missouri Chamber successfully fought off several proposals that would have been particularly onerous to the state’s business community.

However, the provisions included in the final bill, which will become law upon a signature from Gov. Matt Blunt, remain a source of confusion for many business leaders.

Among the questions being asked by Missouri employers, are: Will I now have to use a federal work authorization program when I hire a new employee? What penalties could my business face if we make a mistake? When does the law go into effect? How will the new OSHA training requirements affect my business?

To help answer these questions, the law firm Armstrong Teasdale LLP has analyzed the bill and has provided an excellent, clearly worded description of its provisions. The analysis also looks at how the new state law interacts, and in some cases conflicts, with federal law.

The law firm’s analysis is printed below, with the intent of helping Missouri Chamber members better understand this new law.

If you have unanswered questions or concerns, please contact the Missouri Chamber as we work together to ensure Missouri employers are able to smoothly transition into these new requirements.

 

 

MISSOURI H.B. 1549: WHAT EMPLOYERS NEED TO KNOW ABOUT THE EMPLOYMENT OF UNAUTHORIZED ALIENS

AND OSHA TRAINING REQUIREMENTS

On Friday May 16, 2008, Missouri lawmakers enacted a bill (H.B. 1549) to address a wide range of issues to help the state of Missouri deal with illegal immigration.  The bill was delivered to Governor Blunt on May 29, 2008.  Governor Blunt applauds the lawmakers for passing comprehensive immigration legislation.  However, employers, contractors and subcontractors, and business entities that are awarded state, county or local contracts, grants or state-administered tax credits, tax abatements, or loans from the state in excess of $5,000, may not share the Governor's praises as it places another burden on these employers.

Missouri's immigration bill cracks down on employers who knowingly hire unauthorized aliens and enacts provisions to punish employers who hire illegal immigrants.  In addition, the bill requires verification of legal employment status of every public employee, and allows for cancellation of state contracts for contractors who hire illegal immigrants.  Although the legislation primarily focuses on immigration, it also imposes new OSHA training requirements.  Once signed by the Governor, the immigration related provisions will become effective January 1, 2009 and the OSHA training requirements will become effective August 28, 2009.  This article will address both the immigration and OSHA provisions.

I.          Overview of Federal Immigration Reform and Control Act 

Since Congress passed the Immigration Reform and Control Act of 1986 ("IRCA"), the employment of illegal immigrants has been handled by the Federal government.  IRCA prohibits an employer from knowingly hiring or continuing to employ an individual who is not authorized to work in the United States.  Under IRCA, employers are responsible for verifying the identity and employment eligibility of its employees.  The employer must examine the employee's original documentation evidencing the employee's employment authorization and establishing their identity.  After reviewing an employee's original documents, the employer must complete and maintain a Form I-9 for that employee.  An employer that complies with the IRCA requirements has a valid defense if an employee is later found to be working without authorization.

II.        Missouri Immigration Provisions

A.        Prohibition of Employment of Unauthorized Aliens

Similar to the provisions set forth under IRCA, the Missouri bill provides that, "no business entity or employer shall knowingly employ, recruit, hire for employment, or continue to employ an unauthorized alien to perform work within the state of Missouri."  The Missouri bill, however, imposes additional requirements and/or restrictions on public employers, certain business entities, and contractors.

For instance, all public employers in Missouri must enroll and actively participate in a federal work authorization program ("FWAP").  A public employer is defined as any department, agency, or instrumentality of the state or political subdivision of the state.  A public subdivision is any agency or unit of the state that is authorized to levy taxes or cause taxes to be levied.  A FWAP includes any of the electronic verification of work authorization programs operated by the United States Department of Homeland Security ("DHS") – such as E-Verify.

In most circumstances a non-public employer has the discretion to enroll in a FWAP.  Indeed, under the Missouri bill, a non-public employer may enroll and participate in a FWAP.  If a non-public employer elects to participate in such a program it shall verify the employment eligibility of every employee whose employment commences after the employer enrolls in a FWAP.  The good news is that any business entity that participates in a FWAP shall have an affirmative defense to a claim the business entity knowingly hired or continued to employ an unauthorized alien.  In that case, a FWAP can serve as a safe harbor of sorts.

In some instances, however, a non-public employer may have to enroll and participate in a FWAP.  For example, as a condition for the award of any contract or grant in excess of $5,000 by the state or by any political subdivision of the state to a business entity, or for any business entity receiving a state-administered or subsidized tax credit, tax abatement, or loan from the state (collectively referred to as the “Project”), the business entity shall, by sworn affidavit and provision of documentation, affirm its enrollment and participation in a FWAP for the employees working "in connection with" the Project.  In addition to enrolling in a FWAP, every business entity must also sign an affidavit affirming that it does not knowingly employ any person who is an unauthorized alien in connection with the Project.

General contractors and subcontractors may also need to participate in a FWAP.  The bill provides that a general contractor or subcontractor of any tier shall not be liable for employing an unauthorized alien if such general contractor or subcontractor contracts with its immediate subcontractor who violates this bill.  For this defense to be applicable, the contract binding the contractor and subcontractor must affirmatively state that the subcontractor is not knowingly in violation of the Missouri law andor the contractor receives a sworn affidavit under the penalty of perjury attesting to the fact that the direct subcontractor's employees are lawfully present in the United States.  The required contract language and sworn affidavit from all lower tier contractors appears to apply in all construction settings, not just on a Project. that the subcontractor is enrolled in a FWAP with respect to the services provided under the contract

B.        Enforcement by Attorney General

The Missouri Attorney General is charged with the responsibility of enforcing the provisions prohibiting the employment of unauthorized aliens.  The Attorney General shall initiate an enforcement action upon receipt of a written, signed complaint under the penalty of perjury from a state official, business entity, or state resident.  The complaint shall include an allegation which describes the alleged violator, the actions constituting the violation, and the date and location where such actions occurred.  A complaint that alleges a violation primarily on the basis of national origin, ethnicity, or race shall be deemed invalid and shall not be enforced.

The Attorney General has 15 business days to request identity information from the business entity regarding any persons alleged to be unauthorized aliens.  The business entity has 15 business days to respond to the Attorney General's request.  If the business entity fails to respond within the 15 business day period, the Attorney General shall direct the applicable municipal or county governing body to suspend the business entity's applicable license(s), permit(s), or exemption(s).

Upon receipt of the information, the Attorney General shall verify the employee's identity data and immigration status with the federal government, and provide the business entity with written notice of the results of the verification request.  The employer is not required to take any further action if the verification confirms the employee is authorized to work in the United States.

If the federal government notifies the Attorney General that the employee is not authorized to work in the United States and the employer participates in a FWAP, there shall be a rebuttable presumption that the employer has met the requirements for an affirmative defense.  The employer, however, will still need to take corrective action.

If the federal government determines the employee is not authorized to work in the United States, and if the Attorney General reasonably believes the business entity knowingly violated the provision prohibiting the employment of unauthorized aliens, the Attorney General shall bring a civil action against the employer.  If the court finds that the business entity did not knowingly violate the provision prohibiting the employment of unauthorized aliens, the employer shall have 15 business days to take corrective action.  If the entity fails to take such corrective action within 15 business days, the court shall direct the applicable municipal or county governing body to suspend the business entity's permit(s) and any applicable licenses or exemptions until the business entity takes such action.

If the court finds that the business entity did knowingly violate the provision prohibiting the employment of unauthorized aliens, the court shall direct the applicable municipal or county governing body to suspend the business entity's permit(s) and any applicable licenses or exemptions for 14 days.  The court will reinstate such permits, licenses, and exemptions if the business entity takes corrective action during that 14 day period.

C.        Correction of a Violation

A business entity seeking to correct a violation must undertake certain actions.  The business entity can terminate the unauthorized alien's employment; or the business entity, after acquiring additional information from the employee, can request a secondary or additional verification by the federal government of the employee's authorization, under the procedures of a FWAP.

In addition, a legal representative of the business entity shall submit to the Attorney General:  1) a sworn affidavit stating that the violation has ended, including a description of the specific measures and actions taken by the business entity to end the violation, and the name, address, and other adequate identifying information for any unauthorized aliens related to the complaint; and 2) documentation which confirms that the business entity has enrolled in and is participating in a FWAP.

D.        Penalties

If the Attorney General orders the suspension of a business entity's license or licenses, that suspension shall terminate one business day after a legal representative of the business entity submits to the Attorney General the above-mentioned affidavit and other required documentation (such as confirmation of the business entity's enrollment and participation in a FWAP).  An entity that violates the provision prohibiting the employment of unauthorized aliens for a second time shall lose its business permit and any applicable license or exemptions for one year.  For subsequent violations, the business entity shall permanently lose its business permit and any applicable license or exemptions.

In addition to the suspension of a business entity's permit or licenses, upon the first violation by any business entity awarded a Project, the business entity shall be deemed in breach of contract and the state may terminate the contract and suspend or debar the business entity from doing business with the state for a period of three years.  Upon such termination of the contract, the state may also withhold up to 25% of the total amount due to the business entity.  Upon a second violation, the business entity shall be deemed in breach of contact and the state may terminate the contract and permanently suspend or debar the business entity from doing business with the state.  Upon a second violation, the state may also withhold up to 25% of the total amount due to the business entity.

Also, any compensation—whether in money, in-kind, or in services—knowingly provided to any unauthorized alien may not be allowed as a business expense deduction from any income or business taxes of the state of Missouri.  Likewise, any business entity that terminates an employee in accordance with the provisions of this bill shall not be liable for any claims made against the business entity under Section 213 of the Revised Missouri Statutes (Human Rights).  Although the statute contains immunity from state level employment lawsuits, the legislation does not prevent an employer from being sued in federal court for a potential Title VII violation.

III.       OSHA Training Requirements

In addition to the immigration provisions, the Missouri bill also imposes new OSHA training requirements that apply to both immigrant and nonimmigrant employees.  Any person, contractor or subcontractor signing a contract to work on the construction of public works for any public body must provide their on-site employees with a 10-hour construction safety and health course.  The course must be approved by OSHA or must be as stringent as an OSHA-approved course.  Employers may not know or understand whether the course their employees attend meets that "astringent" standard.  Public works are defined as all fixed work constructed for public use or paid out of public funds; public works include any work done directly by any public utility company—but not public utilities under the jurisdiction of the public service commission—or other public authority.  All employees are required to complete the course within sixty days of beginning work on the public works project.

Any employee required to, but found to have not completed the course, will have 20 days to produce documentation of the completion of the course or be removed from the project.  The penalty for contractors who do not follow the provision is $2,500 plus $100 per day for every employee who has not completed the course.  The public body awarding the contract can withhold these penalties from the contractor’s payment, and the contractor may withhold or recover payments from the subcontractor sufficient to cover any penalty for which the subcontractor is responsible.  If the contractor or subcontractor fails to pay the penalty within 45 days, the department will bring an enforcement action to recover the penalty and the cost of enforcement.

IV.       Concerns Regarding Missouri's Bill

A number of concerns have been raised about the above-mentioned immigration-related provisions.  Most notably, the legislation appears to be susceptible to a constitutional challenge.  The enforcement of immigration is regulated by the Department of Homeland Security and is a federal concern that should be handled by the federal government.

Another notable concern is the potential for misuse of the investigative power granted to the Attorney General.  The Attorney General is responsible for enforcing the provisions of the bill and investigating all non-frivolous complaints.  If the Attorney General finds that a complaint is frivolous or that there is no probable cause to believe there has been a violation, the Attorney General shall issue a public report to the complainant and the alleged violator stating with particularity its reasons for dismissal of the complaint.  If the Attorney General determines the complaint is non-frivolous, then it will proceed with its investigation.  In such case, the business entity subject to a complaint and subsequent enforcement may challenge the enforcement in the courts of the state of Missouri.  If the court determines that the complaint is frivolous in nature or finds no probable cause to believe that there has been a violation, the court shall dismiss the case.  Unfortunately, a business entity’s only recourse in challenging a complaint is in the courts of the State of Missouri.

The Missouri bill also appears to conflict with the provisions of the DHS E-Verify program.  The bill provides that a business entity is required to enroll and participate in a FWAP in respect to employees working in connection with a Project.  This provision, however, conflicts with most FWAPs, as such programs prohibit employers from verifying the employment eligibility of current employees.  For example, an employer that registers with E-Verify – pursuant to a Memorandum of Understanding between the employer, DHS and Social Security Administration – confirms that it will not use E-Verify to verify the employment eligibility of existing employees but, rather, the employer agrees to E-Verify all employees hired after its enrollment in the E-Verify program.  However, the Missouri bill requires business entities to affirm that the employees working in connection with a Project have been verified under a FWAP.  A business entity may not be able to make such an affirmation if the business entity hired the employees working in connection with a Project prior to the business entity's enrollment in the FWAP.

Another concern is that employers will need to go to great efforts to identify every contract they have with the state, county or local government and verify the status of all workers working "in connection with" the Project.  Some have asked whether this bill covers things such as Medicaid payments by the State.

V.        Conclusion

            As a result of H.B. 1549’s enactment, many employers will be responsible for observing increased compliance requirements, and may be subject to strict penalties for failing to follow the new immigration and OSHA provisions.  Furthermore, employers will be faced with the challenge of complying with both Missouri’s new provisions and federal regulations, along with responding to enforcement actions the Missouri Attorney General or the Federal government may bring. 

For more information regarding this Article, please contact Ms. Martha Neville Hereford, or Ms. Julie E. O'Keefe, both with Armstrong Teasdale LLP.

Martha Neville Hereford Partner, Immigration Practice Group Armstrong Teasdale LLP One Metropolitan Square, Ste 2600 St. Louis, MO 63102 314-621-5070 mhereford@armstrongteasdale.com

Julie E. O'Keefe Partner, Environmental Practice Group Armstrong Teasdale LLP One Metropolitan Square, Ste 2600 St. Louis, MO 63102 314-621-5070 jokeefe@armstrongteasdale.com