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1017: Requires that businesses comply with federal immigration laws
1020: Bars businesses from claiming the wages or renumerations paid to unauthorized alien workers
Controversial Colorado Law Requires Business to Comply with Federal
Immigration Law
By Colin NicholsonA controversial law, HB 06S-1017, requires that business comply with
federal immigration law by only hiring those who are legally authorized to
work in the United States. Starting on January 1, 2007, business must
affirm in writing within 20 days of hiring a new employee that they have examined the legal work status of the employee and kept copies of documents presented by an employee to establish legal work status. In addition, the employer must also affirm that they have not altered or falsified these documents nor have knowingly hired an illegal alien. The employer is also required to retain a written or electronic copy of the affirmation.
The law may be enforced by random audits conducted by the Colorado
Department of Labor. When requested, a business must demonstrate that it
is in compliance and provide all relevant documentation. Essentially, if
an employer is found to be out of compliance, they could face a fine not to
exceed $5,000 for the first offense and $25,000 for the second and
subsequent offenses.
The impact of the law will depend in large part on how much money and
resources the State of Colorado allocates for enforcement. Though the
fines are relatively insignificant, most businesses will want to avoid the
risk of perjury by signing an affirmation submitted to the state of Colorado, and therefore will endeavor to only hire authorized workers.
New Colorado Law Prohibits Businesses from Claiming Wages Paid To Unauthorized Alien Workers as a Tax Deductible Expense
By: Colin NicholsonAs part of a series of bills designed to combat illegal immigration in the state of Colorado, HB 06S-1020 is poised to go into effect on January 1, 2008. The bill essentially bars businesses from claiming the wages or remunerations paid to unauthorized alien workers, including independent contractors, for labor as a tax deductible expense on their state income tax returns. These unauthorized workers only include those that the company knew were unauthorized at the time of hire. Starting on January 1, 2008, in order to claim workers as a business expense on state taxes, the taxpayer has to be able to demonstrate that the workers are authorized to work in the U.S. pursuant to U.S.C. SEC 1324 (a) (h) (3). If taxpayers claim wages or monies paid to unauthorized workers as a business expense on their federal taxes, they will have to add that amount to the federal taxable income for state tax purposes line on their state tax return.
There are several key exemptions. First, this law will not apply to workers hired prior to January 1, 2008. In addition, workers who hold a valid license or identification issued by the Colorado Department of Revenue will be exempt as well as any worker that is not paid directly by the business filing the return. Furthermore, any business that is exempt from complying with federal employment verification under federal law is exempt from the provision.
It is difficult to see how the bill could be enforced. Any business that makes a good-faith effort to verify that its workers are eligible to work in the U.S. should not expect any problems. A taxpayer that claimed workers that it knew were unauthorized to work in the U.S. could presumably be charged with filing a false state tax return. This law will give Colorado employers yet one more reason to think twice before hiring an unauthorized worker and to exercise diligence in verifying that its workers are authorized to work in the United States.
Colorado Law Prohibits Contractors Doing Business with the State from Hiring Illegal Aliens
House Bill 06-1343 requires that any state agency or political subdivision not enter into a contract or renew a contract with any contractor "who knowingly employs or contracts with an illegal alien to perform work under the contract or knowingly contracts with a subcontractor who knowingly employs or contracts with an illegal alien to perform work under the contract." The bill provides a broad definition of political subdivision that includes every government or government entity in Colorado- including cities and counties. For enforcement, the bill requires several provisions to be included in every such contract. First, there will a provision that states that a contractor will agree not to "knowingly employ or contract with an illegal alien to perform work under the public contract for services" or enter into a contract with a subcontractor who fails to do likewise. Second, there must be a provision in the contract where the contractor must agree that it has verified that its workers are legal by participating in Basic Pilot or has attempted to do so. The contractor must continue to apply for the Basic Pilot program until it is accepted or the work under the contract is complete. Anytime that a contractor is found to be in violation of these provisions, the state or political subdivision may "terminate the contract for a breach of the contract." In such a case, the contractor "shall be liable for actual and consequential damages to the state agency or political subdivision." Furthermore, a contractor who is found to be in violation of this law will not be allowed to participate in any contracts with the state or any political subdivision for two years. The contractor must terminate a contract with any subcontractor within three days when it has knowledge that the company employs one or more illegal aliens. The state may attempt to verify that the contractor is in compliance with the law at anytime. For more details, refer to the State of Colorado
State of Colorado
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