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HomeMy WebLinkAboutCity Council Report Item No. 08CITY OF i~N~ LADE tvjLSII`LO DREAM EXTREMES REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: MAY 11, 2010 SUBJECT: 1. UTILIZATION OF E-VERIFY PROGRAM WITHIN THE CITY OF LAKE ELSINORE 2. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADDING CHAPTER 5.30 OF THE LAKE ELSINORE MUNICIPAL CODE REGARDING EMPLOYMENT OF UNDOCUMENTED WORKERS. Background Last year, the City of Lancaster adopted an ordinance mandating that all businesses within that city utilize the "E-Verify" process offered by the Department of Homeland Security to verify legal residency when hiring new employees. Lancaster is the first city in California to adopt such an ordinance. Councilman Hickman has requested that the City Council consider adopting regulations requiring employers in the City of Lake Elsinore to use the E-verify process to confirm legal residence status of prospective employees. Discussion The Immigration Reform and Control Act of 1986 (IRCA) established a paper-based method of verifying an employee's eligibility to work, known as the 1-9 system". The 1-9 system requires employees to attest to their eligibility to work and to present identification documents, such as a driver's license, social security card or other specified documentation. IRCA then requires employers to examine the identity document the employee presents and attest that it appears genuine. The employer is entitled to a defense to sanctions if the employer shows good-faith compliance with the 1-9 system, unless the employer has engaged in a pattern or practice of violations. AGENDA ITEM NO. 8 Page 1 of 9 Ordinance Re Employment of Undocumented Workers May 11, 2010 Page 2 E-Verify Program The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) directed the Attorney General to establish pilot programs to ensure the efficient and accurate verification of any new employee's eligibility for employment. The basic pilot program is now known as E-Verify. E-Verify is a voluntary and free internet-based system that electronically verifies the employment eligibility of newly hired employees. E-Verify works by allowing participating employers to electronically compare employee information taken from the Form 1-9 against the Social Security Administration (SSA) and Department of Homeland Security (DHS) databases. Results are immediate. To participate, an employer must register online and accept the electronic Memorandum of Understanding that details the responsibilities of SSA, DHS and the employer. E-Verify is an alternative to the 1-9 system. After an employer submits a verification request for an employee, E-Verify either issues a confirmation or a tentative nonconfirmation of work-authorized status. If a tentative non-confirmation is issued, the employer must notify the employee, who has eight days to challenge the finding. The employer cannot take any adverse action against the employee during that time. If an employee does challenge the tentative non-confirmation, the employer will be informed of the employee's final work-authorization status. Any employee who either does not challenge a tentative non-confirmation or is unsuccessful in challenging a tentative nonconfirmation must be terminated, or the employer must notify the Department of Homeland Security (DHS) that it will continue to employ that person. An employer who fails to notify DHS of the continued employment of a person who received a final nonconfirmation is subject to a civil money penalty. City of Lancaster Ordinance and Actions by Other Cities On October 13, 2009, the City of Lancaster introduced and subsequently adopted an ordinance entitled "Employment of Undocumented Workers." The ordinance provides that the hiring of undocumented workers may result in the revocation of a business license. It also mandates that employers use the E-Verify Program to verify the employment eligibility of employees, which is not currently required by any federal, state or local law or ordinance. If an employer violates the provisions of the ordinance, the city manager is required to demand that such employer terminate any undocumented workers and execute a declaration stating that the employer has terminated all undocumented workers and will comply with the requirements of the ordinance. If an employer violates the provisions of the ordinance more than once within a 24-month period, the city manager may revoke any license that has been issued to the employer. Page 2 of 9 Ordinance Re Employment of Undocumented Workers May 11, 2010 Page 3 Aggrieved employers have the right to appeal any decision of the city manager. The appeal will be heard and decided by a hearing officer selected by the city clerk. The decision of the hearing officer may be appealed to the City Council. Lancaster has not been sued concerning adoption of the ordinance. However, no enforcement actions have been undertaken. In March, the City of Menifee directed its City Manager to prepare an ordinance mandating employers use the E-Verify Program. However, a draft ordinance has not yet been presented to the Menifee City Council for consideration. The City of Santa Maria recently considered several E-Verify Program measures, including having the city utilize the E-Verify Program in its own hiring, establishing a committee to study the idea of requiring city vendors utilize the E-Verify Program, and adopting an ordinance similar to Lancaster. Santa Maria has opted for further studies before adopting an ordinance. The City Attorney's office has prepared an ordinance which substantially mirrors that adopted by the City of Lancaster. A copy of the proposed ordinance is attached and can be introduced for first reading as is or with revisions as may be determined by the City Council. Fiscal Impact Unknown at this time but generally anticipated to be minimal to the City. The cost to businesses and other employers is unknown. The City of Lake Elsinore currently uses the 1-9 system in its hiring process for new employees. In addition, City personnel administrators electronically verify social security numbers with the Social Security Administration and conduct a LiveScan background check before hiring. Staff does not anticipate additional cost by transitioning to the E-Verify Program. Additional staff time may be needed in order to enforce and prosecute a known violation. Recommendation The City Council may wish to consider the following alternatives: 1. Receive and file Staff Report. 2. Direct staff to review, research and study the use of E-Verify for City vendors and contractors and/or the impacts of mandating the E-Verify Program on all employers and report back to the City Council in 90 days. 3. Direct the City Manager to implement procedural changes to the City's hiring process and use E-Verify Program. Page 3 of 9 Ordinance Re Employment of Undocumented Workers May 11, 2010 Page 4 4. Adopt the attached ordinance with such revisions as may be determined by the City Council and that the following motion be made: Waive further reading and introduce by title only an ordinance adding Chapter 5.30 of the Lake Elsinore Municipal Code regarding employment of undocumented workers. Prepared by: Barbara Zeid Leibold City Attorney Approved by: Robert A. Brady City Manager Attachments: Ordinance Page 4 of 9 ORDINANCE NO. 1276 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADDING CHAPTER 5.30 TO THE LAKE ELSINORE MUNICIPAL CODE REGARDING UNDOCUMENTED WORKERS THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. That Chapter 5.30 is hereby added to the Lake Elsinore Municipal Code as follows. Chapter 5.30 Employment of Undocumented Workers Sections: 5.30.010 Definitions. 5.50.020 Knowingly employing undocumented workers. 5.50.030 Verification of employment eligibility. 5.50.040 Violation-Penalty. 5.50.050 Appeal 5.50.060 Severability. 5.30.010 Definitions. Except as otherwise expressly set forth herein, the following words and terms as used in this chapter shall have the following meanings: "City clerk" means the city clerk of the city and his or her designee(s). "City manager" means the city manager of the city or any other city officer or employee responsible for administering this chapter. "Employ" means hiring an employee after the adoption date of this chapter. "Employee" means any person who provides services or labor within the city for an employer for wages or any other remuneration. An independent contractor is not an employee for the purpose of this chapter. "Employer" means any person that is transacting business in the city and that employs one or more employees in the city. "E-verify program" means the electronic verification of work authorization program of the Illegal Immigration Reform and Immigration Responsibility Act of 1996, as amended, and operated jointly by the United States Department of Homeland Security and the United States Social Security Administration, or a successor electronic verification of work authorization program designated by the United States Department of Homeland Security or other federal agency authorized to verify the work authorization status of newly hired employees pursuant to the Immigration Reform and Control Act of 1986, Pub. L. No. 99-603. Page 5 of 9 Ordinance No. 1276 Page 2 of 5 "Independent contractor" means any individual or entity that carries on an independent business, that contracts to do a piece of work according to the individual's or entity's own means and methods and that is subject to control only as to results. Whether an individual or entity is an independent contractor is determined on a case-by- case basis through various factors, including whether the individual or entity: (a) supplies the tools or materials. (b) makes services available to the general public. (c) works or may work for a number of clients at the same time. (d) has an opportunity for profit or loss as a result of labor or service provided. (e) invests in the facilities for work. (f) directs the order or sequence in which the work is completed. (g) determines the hours when the work is completed. "Knowingly employ an undocumented worker" means the actions described in Section 1324a of Title 8 of the United States Code. This term shall be interpreted consistently with Section 1324a of Title 8 of the United States Code and any applicable federal rules and/or regulations. "Person" means all domestic and foreign corporations, associations, syndicates, joint stock corporations, partnerships of every kind, clubs, businesses, trusts, societies and individuals transacting and carrying on any business in the city other than as an employee. "Transacting business" means engaging in any activity for profit within the city, including, but not limited to providing goods or services, whether the business is physically located within the city or located outside the city with a substantial amount of business transacted within city limits. "Undocumented worker" means a worker who does not have the legal right or authorization under federal law to work in the United States as described in Section 1324a(h)(3) of Title 8 of the United States Code. 5.50.020 Knowingly employing undocumented workers. An employer shall not knowingly employ an undocumented worker. If, in the case when an employer uses a contract, subcontract, or other independent contractor agreement to obtain labor of workers in the city, the employer knowingly contracts with an undocumented worker or with a person who employs an undocumented worker to perform the labor, the employer violates this Section 5.50.020. 5.50.030 Verification of employment eligibility. A. Every employer, after hiring an employee, shall verify the employment eligibility of the employee through the e-verify program. Page 6 of 9 Ordinance No. 1276 Page 3 of 5 B. An employer shall maintain records sufficient to establish that it has complied with the requirement set forth in subsection (A) of this Section 5.50.030 with respect to each employee and shall retain such records for the duration of such employee's employment; provided, however, that an employer shall retain and maintain such records for a longer period of time if required by an applicable state or federal law, regulation or rule. The records maintained pursuant to this Section 5.50.030 shall be immediately made available to the city for inspection and audit upon written notice to the employer by the city manager. 5.50.040 Violation-Penalty. A. On a finding of a first violation of this chapter, the city manager shall demand that the employer terminate the employment of all undocumented workers in the city hired in violation of this ordinance and demand that the employer sign a declaration under penalty of perjury within ten (10) business days stating that the employer has terminated the employment of all undocumented workers in the city and that the employer will comply with the requirements of this chapter. B. On a finding of a second violation of this chapter, the city manager may revoke any license that has been issued to and that is held by an employer pursuant to Title 5 of this code, including, without limitation, a business license issued pursuant to Chapter 5.04. For the purpose of this Section 5.50.040, a second violation shall be a violation that occurs within twenty-four (24) months of a finding of a first violation. C. Notwithstanding any other provision of this code, the penalty for a violation of this Chapter 5.50 shall be limited to the penalties set forth in this Section 5.50.040. 5.50.050 Appeal. A. If an employer is aggrieved by any decision of the city manager regarding the finding of a violation or the revocation of a license issued pursuant to Title 5 of this code, the employer may appeal the decision within ten (10) calendar days from the date of the city manager's decision. The notice of appeal must be in writing, indicate a return address, specify the basis for the appeal in detail and be timely filed with the city clerk. If the deadline falls on any day city hall is closed, then the deadline shall be extended until the next regular business day. B. As soon as practicable after receiving the written notice of appeal, the city clerk shall fix a date, time and place for hearing before a hearing officer. Written notice of the time and place for the hearing may be served by first class mail, at the return address indicated on the written notice of appeal. Service of the written notice of the time and place for the hearing must be made at least ten (10) days prior to the date of the hearing. C. The failure of any person to receive the written notice of the time and place for the hearing shall not affect the validity of any proceedings under this chapter. Service by first class mail, postage prepaid shall be effective on the date of mailing. Page 7 of 9 Ordinance No. 1276 Page 4 of 5 D. Failure of any person to file an appeal in accordance with the provisions of this section shall constitute a waiver of that person's rights to an appeal. If no appeal is filed, the city manager's decision shall be deemed a final administrative order. E. A hearing officer shall be designated by the city clerk for all appeal hearings under this chapter. The respondent may request the city clerk recuse a hearing officer for reasons of actual prejudice against the party's cause. The hearing officer shall conduct an orderly fair hearing and accept evidence on which persons would commonly rely in the conduct of their ordinary business affairs. F. The city clerk shall establish all appropriate administrative regulations for implementing this chapter, conducting hearings and rendering decisions pursuant to this section. G. The hearing officer shall make findings based on the record of the hearing and make a written decision based on the findings. The city shall preserve all exhibits submitted by the parties and shall serve the decision by first class mail on the appellant within ten (10) working days after the hearing. The decision of the hearing officer reversing the city manager's decision to impose a penalty under Section 5.40.040 of this chapter shall be final and conclusive. The decision of the hearing officer affirming the city manager's decision to impose a penalty under Section 5.40.040 of this chapter may be appealed by the employer submitting a notice of appeal in accordance with the uniform appeal procedure set forth in Chapter 2.44. SECTION 2. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 3. This Ordinance shall take effect thirty (30) days after the date of its final passage or such later date as may be designated by the City Council. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this 11th day of May 2010. MELISSA A. MELENDEZ, MAYOR CITY OF LAKE ELSINORE ATTEST: CAROL COWLEY INTERIM CITY CLERK Page 8 of 9 Ordinance No. 1276 Page 5 of 5 APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE )ss. CITY OF LAKE ELSINORE ) I, Carol Cowley, Interim City Clerk of the City of Lake Elsinore, California, hereby certify that the foregoing Ordinance No. was introduced at a regular meeting of the City Council of the City of Lake Elsinore on the th day of 2010, and was finally passed at a regular meeting of the City Council _of the City of Lake Elsinore held on the day of 2010 by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: CAROL COWLEY INTERIM CITY CLERK Page 9 of 9