East Valley labor pool dips due to hiring law

Even as business owners across the East Valley struggle to determine how to comply with the new employer sanctions law, they’re seeing the pool of potential workers vaporize.

But the law to fight illegal immigration doesn’t even take effect until next year.

The Fair and Legal Employment Act, which Gov. Janet Napolitano signed Monday, will suspend and revoke the business licenses of Arizona employers who “knowingly” or “intentionally” hire illegal immigrants.

The problem, employers say, is that no one knows what the legal standard is for “knowingly” or “intentionally” hiring illegal immigrants. Will employers who accept job applicants’ IDs, such as driver’s licenses, legal residency cards and Social Security cards, be punished if those IDs later are determined to be fraudulent?

“I’ve got to believe that you do your best, and you’re watching everything. You’re watching the paperwork and turning people away — that’s all you can do,” said Tom Silverman, owner and general manager of Chaparral Suites Resort Scottsdale.

“I’m sure there are some employers, hopefully not too many, but there are still some out there that don’t even check and don’t care. Show them anything, and they hire them,” Silverman said. “Those are the people they should go after.”

Employers are watching to see how law enforcement agencies interpret the law, said Farrell Quinlan, spokesman for the business association, Arizona Employers for Immigration Reform.

Such issues “will have to be worked out in the courts most likely,” he said.

On Tuesday, Maricopa County Attorney Andrew Thomas announced he was forming a committee to plan how to enforce the law. He also said the law carries a high legal standard and was unsure how to prove an employer “knowingly” or “intentionally” hired an illegal immigrant.

The law requires Arizona businesses to run workers’ names through a federal database to check their legal status. Quinlan said the system — now used by 15,000 businesses nationwide on a pilot basis — has some kinks. For instance, data-entry mistakes or misspelled names produce false results that are difficult to clarify.

Steve Chucri, president and chief executive officer of the Arizona Restaurant and Hospitality Association, said his organization will start holding regular meetings in Phoenix and Tucson to help familiarize members with the law’s perceived nuances before it takes effect in January.

In the meantime, the number of job-seekers already is decreasing, said Carin Brodland, human resources manager for Chaparral Suites, which employs nearly 250 people.

The resort’s human resources executives previously turned away about two job applicants a week because they presented questionable identification.

During the past six months, though, fewer applicants with possible fraudulent documentation have sought jobs at all, Brodland said.

Resort executives attributed the drop-off to discussion among illegal immigrants about the new employer sanctions measure as it made its way into law.

Latino business owners in Mesa said they worry they will lose clients as illegal immigrants are forced to move to other states in search of work.

“I’m pretty sure they are not going to have any other choice. They are going to have to go back to Mexico because if they don’t have a green card, nobody is going to risk their business,” said Jesus Saldaña, who owns Latino Jewelers.

“Most of my people is Latin people, and I would say 90 percent don’t have their green card. I think we are going to go broke,” he said.

Moving out of state has already crossed the mind of 42-year-old Luis Alberto Hernández of Phoenix, who works for a carpentry company in Mesa but doesn’t have permanent residency.

“It will affect us, because we’ll be afraid to ask for work, and the employers won’t give us work. We have family in Mexico that we need to support,” he said.

Hernández said he’ll keep on working as usual for now, but will consider moving to California if the law goes into effect as planned.

The new law will likely have a major impact on cash-checking businesses, many of which depend on immigrant clients who wire money to relatives in Mexico.

Lucía Esquivel, manager of the Ace Cash Express at 540 W. Broadway Road in Mesa, said her store has already lost business because the branch could not get enough Spanish speaking tellers to help clients.

To work there, she said employees must undergo credit and background checks, and prove they are in the country legally.

But with the new law, she expects the number of Latino clients will drop even more — and have a domino effect on her business.

“The impact it has on their jobs will be the same impact on us,” she said. “If they lose their jobs, we will lose those clients that come in here. If they can’t work, we won’t have as many people coming in to cash their checks and there won’t be as many people sending money to Mexico, either.”

The law could have a chilling effect on the state’s entire economy, warned Elliott Pollack, one of the state’s top economists. The law will certainly make it harder for the agricultural and hospitality industries that depend on illegal immigrants to fill jobs.

This will force businesses to pay more for employees living here legally, he said. And that extra cost will be passed on to consumers.

“The major impact in the economy will be the state’s ability to attract and recruit businesses from outside the state,” Pollack said.

Although he’s unsure how much of an impact the law will have, he warned that certain businesses could be deterred from moving here because of the potential punishment for hiring a illegal workers.

Joan Koerber-Walker, chief operating officer of the Arizona Small Business Association, said her organization supported the bill and thinks it will help level the playing field for small-business owners who normally follow the law.

“It’s a step in the right direction,” she said.

George Cherpelis, a Scottsdale attorney who practices labor law, said some business managers will be willing to hire illegal immigrants, despite the new law and its consequences.

“If they can’t get the manpower they need they will be in a crunch. These businesses have contracts and deadlines to meet,” he said

The Fair and Legal Employment Act

• Businesses are required to check the legal status of their employees by running their names through a federal database known as the Basic Pilot Program.

• The first time a business is caught “knowingly” hiring illegal immigrants, it will lose its license for up to 10 days. A business caught “intentionally” hiring undocumented workers would lose its license for a minimum of 10 days.

• A second violation will cost a business to permanently lose its license to operate.

• The Maricopa County Attorney’s Office will get $1.4 million from the state’s General Fund to investigate employers. A total of $2.4 million will be distributed to county prosecutors.

• The Arizona Attorney General’s Office will get $100,000 from the state’s General Fund.

— Tribune writers David Woodfill and Sarah N. Lynch contributed to this report.