Employers are facing what could be a classic Catch-22, come Jan. 1 when a new state law takes effect. In fact, as written, the law literally requires employers to possibly violate it in order to comply with it, says Benjamin Graff, an attorney with Lewis and Roca.

The law, which aims to eliminate the hiring of illegal immigrants, requires employers to use a federal online system to verify an employee’s work eligibility but it can only be used after the employee has been hired. Employers are not permitted to pre-screen employees using the system.

As part of the agreement, employers must abide by to use the federal online system, now called E-Verify (formerly the Basic Pilot Program), it cannot be used to prescreen or back-check employees or they could lose the right to use it. And yet, the Arizona makes it mandatory that employers use E-Verify.

About 100 local business representatives attended the Lewis and Roca-sponsored presentation on the new law Aug. 29 at the Arizona Inn.

Graff called the Catch-22 his "favorite flaw" in the new law, saying it requires an employer to first hire the employee, then check their eligibility via E-Verify within three days only to be told, after the fact, they’ve violated the law.

The law has been called the toughest employer sanctions law in the country. It has come under fire from business organizations claiming it is unconstitutional and pre-empted by federal law and that it violates due process.

The word from a panel of lawyers, though, is don’t panic but get things in order. Those participating in the presentation were Graff, Todd Hale and Abbe Goncharsky, from Lewis and Roca, and Chris Brelje, a nationally recognized immigration law attorney who has his own firm, Brelje and Associates.

"While there are lawsuits underway to fight this bill, owners need to prepare their businesses now as if it is going to pass," Hale said.

The first order of business for owners is to go back and review all I-9s on file and make sure they are completed correctly.

Brelje offered seven strategies employers should use to so their businesses can weather "the immigration ‘perfect storm’ for Arizona employers."

Besides checking I-9 forms, he says all supervisors and other leaders should be made aware that if they are part of the hiring of an illegal immigrant – even if the owner or manager doesn’t know – the business can be held liable. That’s called "constructive knowledge" in legalese.

Brelje also recommended planning when to start using the federal government’s E-Verify system and to have an immigration compliance plan.

Clearing the hurdles of the new law may not be the worst of what employers will face in coming years.

Graff talked about an initiative being circulated for the November 2008 ballot that would cost a business its license if it is found to have hired an illegal immigrant. Under the existing law, a business license is suspended on the first offense, and then would be lost on the second.

Graff said even an employer who has, in good faith, tried to comply with the law could be left without a legal defense.

Another new wrinkle facing employers under federal regulations is that effective Sept. 14, there are new procedures to follow after receiving a "no-match" letter from the Social Security Administration. The letters say the government was unable to find that a Social Security number and a submitted name were a match.

The new rule provides "safe harbor" procedures, providing you follow these five rules:

1. Within 30 days of receipt of the no-match letter, the employer must check its records for clerical or other error. If one is discovered, correct it with the Administration and verify at www.ssa.gov/employer/ssnv.htm or www.ssa.gov/employer/ssnvadditional.htm.

2. If no error is found, promptly request the employee confirm the name and number.

3. If the employee confirms that information is correct, employer promptly advises employee of date of receipt of no-match letter and advises the employee to resolve the discrepancy with the Social Security Administration within 90 days from that date.

4. If at 90 days the discrepancy is not resolved, employer must attempt to re-verify I-9 form with exceptions

5. If the employer cannot verify the new I-9 form, employer must either terminate or face risk of "constructive knowledge" of unauthorized employment status. Conversely, where an employer successfully verifies work eligibility, "safe harbor" applies and continued employment is permitted.

"The safe harbor only applies where the employer does not have additional, independent, actual or constructive knowledge that and employee is not work authorized," Berlje said.

Among those at the presentation was Chris Hazen of Patio Pools and Spas.

"We need to go back and do additional training to make sure everything is ready," she said.

Hazen was not as concerned as most because she has spent the last five years making sure her business complied with current laws. To those just starting the compliance process, she offered her own advice: "Get educated. It is complex and we have to know it. Consult a qualified human resource person or legal council, but get educated."