Colorado's New Immigration Laws
July 14, 2006
As you have likely seen in the news, the Colorado Legislature recently called a special session geared mainly around the issues of illegal immigration in our state. The legislation that has emerged from these sessions represents an enhancement to Federal laws that are already in place. We are writing this letter to highlight some of the changes that will effect Colorado employers that employ non-citizens in their businesses.
It is important to note that immigration laws are Federal, and that states only have limited power in terms of what services can be restricted and what penalties to employers can be imposed. The new rules that specifically impact Colorado businesses are the following:
- Employers must verify that they do not hire illegal immigrants before being eligible for economic development incentives. This bill is written to apply to any company who is currently a part of the incentive programs, as well as those who apply in the future.
- Employers must copy the documents which establish a that workers hired have proper authorization to work. The state can audit and verify the proof. Firms that, with reckless disregard, fail to respond to a request for proof or who submits false or fraudulent documentation are subject to a $5,000 fine for the first offense, and a $25,000 fine for each subsequent offense. This provision takes effect on January 1, 2007.
- Businesses that hire undocumented workers are prohibited from taking certain state tax deductions on wages paid to undocumented workers who were known to be without the legal ability to work at the time of hire.
- Employers must withhold 4.63% State income tax for individuals whose compensation is reported on Form 1099 that have failed to provide a valid Taxpayer Identification Number.
Governor Owens has described the new laws as "giving teeth" to federal immigration laws. Although he has not signed these bills into law, it is generally expected that he will.
These new provisions will certainly alter both the hiring process and the day-to-day operations of certain businesses. For a more thorough discussion of these new laws, their impact on your business practices, and strategies for compliance, we encourage you to attend our advanced immigration seminar scheduled for October 6th. If you would like to discuss these changes before that time, please feel free to contact our office to make an appointment with an attorney in our office.
