Colorado Enacts Employment Verification Requirements
We are not Colorado lawyers but we wanted our clients, contacts and readers to be aware of a new Colorado law since how they respond to that statute could affect them in other states and because the statute may be subject to the argument that it is preempted by federal law and therefore unenforceable.On July 31, 2006, Colorado's governor signed into law a new employment verification statute that will impact every business that employs workers and transacts business in Colorado. Effective January 1, 2007, Colorado employers (regardless of size or headcount) will be required to comply with the Colorado state employment verification scheme, which will be enforced by the Colorado Department of Labor and Employment. Within 20 days after hiring a new employee, each employer will be required to affirm in writing:
- that it has examined the legal work status of such newly hired employee and has retained file copies of the documents evidencing the employee's identity and work eligibility;
- that it has not altered or falsified the employee's identification documents; and
- that the employer has not knowingly hired an unauthorized alien.
The employer must retain a written or electronic copy of the affirmation and of the verification documents so long as the employee is employed by the employer. The Colorado Department of Labor and Industry is authorized to demand inspection of the affirmation and verification documents either on a random basis or based on cause. An employer who, with reckless disregard, fails to submit the documentation required, or who, with reckless disregard, submits false or fraudulent documentation, can be fined up to $5 thousand per worker for a first offense and up to $25 thousand per worker in subsequent prosecutions. It is not clear whether the State intends to assert jurisdiction over persons employed outside the State of Colorado in its enforcement actions.
Colorado has also adopted new public procurement legislation requiring state and local contractors to participate in the federal Basic Pilot verification program as a condition of obtaining and retaining public contracts in Colorado, effective for contracts entered into on and after August 7, 2006. The Basic Pilot Program is administered by the Immigration and Customs Enforcement (ICE) branch of the Department of Homeland Security. Participating employers are required to enter into a written agreement with ICE promising to comply with the regulations governing the program and to refrain from using the program to screen applicants for employment. Participating employers are required to complete and retain written or electronic copies of I-9 forms. In addition, on the first day of employment, participating employers are required to electronically transmit to ICE the new hire's name, date of birth, social security number, and alien registration number (if any). Within 3 days, ICE responds that the data either matches or tentatively does not match information in the government's data bases. If there is a tentative non-match, the subject employee is required to attempt to resolve it by contacting the Social Security Administration and/or ICE. The employer must continue to carry the subject employee as an active employee for 10 business days following the tentative non-match. If the non-match is not resolved in that 10 day period, the employer must discharge the employee, or face potential fines and penalties if the individual turns out to be unauthorized for U.S. employment.
Colorado contractors also will be responsible for obtaining certification from their subcontractors that said subcontractors will not knowingly employ or contract with an illegal alien to perform work under the public contract. If a contractor discovers that a subcontractor is employing an unauthorized worker, then the contractor must notify the state or local agency of the discovery and terminate its relationship with the subcontractor within 3 days unless the subcontractor provides the contractor with information sufficient to establish that the subcontractor had not knowingly employed or contracted with an illegal alien.
Members of the public have the right to file complaints against contractors suspected of employing unauthorized workers. If, as a result of an investigation by the Director of the Department of Labor and Industry, it is determined that a contractor has violated its obligations with respect to employment verification, its contracts may be terminated and it can be held liable for actual and compensatory damages resulting from the termination.
The Colorado Legislature also adopted a measure designed to eliminate the business tax deduction for wages/benefits paid to illegal aliens passed the General Assembly but was petitioned to referendum on the November ballot.
There are sound reasons for asserting that the Colorado immigration enforcement provisions outlined above are unenforceable because they are pre-empted by federal immigration law. Nevertheless, contractors are faced with a business dilemma since non-compliance could result in the loss of valuable state contracts.
For more information please contact a member of the Real Estate and Construction Law Blog Editorial Team.