HB2577 – Senate Coddles Illegal Employers, Cracks Down on Illegal Workers

Take a good look at the bill summary for the new immigration package passed out of the Senate: HB2577 – 472R – Senate Fact Sheet. It’s titled the Fair and Legal Employment Act (FLEA). It’s well named, as it stands ready to create a whole new class of social parasites.

You will find three key provisions in the FLEA:

• It will become a Class 3 Felony to forge employement documents (this is the main penalty intended for undocumented workers seeking jobs).
• It will be only a Class 1 Midemeanor for employers to knowing employ unathorized workers (this is the employer penalty, and it never increases even after multiple offenses – a sure sign the legislature isn’t serious about containing the behavior).
• Employers can get off the hook for ANY consequences if they make a "good faith determination that the person providing services to
  the employer is done through an independent contractor relationship".

The last item is the footnote that swallows the rule. If this version of FLEA passes the House and suvives Napolitano’s +5 vorpal veto stamp, no undocumented worker will thereafter be able to obtain employment except by signing an independent contractor contract.

In fact, this single ‘independent contractor’ provision could give rise to a whole new class of preditory employment inetrmediaries preying on undocumented immigrants. Labor intermediaries may well move in to direct workers who lack sufficient identification to the employers who want to hire them, and to provide ‘protection’ to the employers.

The value such ‘wetback dealers’ will provide an employer is complete immunity from civil or criminal penalties for hiring unauthorized workers via a bogus independent contractor relationship with the ‘dealer’. The employers will be completely insulated from any legal consequence, and still get all the undocumented workers they could want. Yet undocumented workers will be even more outrageously exploited by these ‘wetback dealers’ because of the thereat of serious criminal penalities in the new law, and the utter lack of labor rights provided to independant contractors by state law. One clear universal economic principle is that the more you crack down on a black market the more you end up enriching and emboldening the criminal intermediaries.

Congratulations to the Arizona Senate! They figured out a way to make an unsustainable and exploitive situation even worse, to create an entire new industry based on exploiting the poorest and most desperate among us, and still failed to address any of the real issues surrounding employment of undocumented workers, or protection of Arizona’s indigenous workers.

It would have been far better to simply extend all the same legal rights of documented workers to undocumented ones. Counterintuitively, such a policy would decrease the use of undocumented workers without penalizing anyone, because it would raise the marginal cost of employing undocumented workers, thus reducing demand by working with natural market forces. Those Republicans up in Phoenix may claim to be advocates of the free market, but their actions indicate that they certainly don’t understand how to use one.