How the Arizona Immigration Law Will Impact Every HR Function

Undoubtedly you have heard about the passage of Arizona Senate Bill 1070, the controversial immigration bill that makes it a crime to be in the state without proof of citizenship or legal immigrant status, but have you thought about what it means for you as an employer?

Even if your organization does not employ individuals in Arizona or have employees who travel to or through Arizona, chances are the new legislation will impact your organization in one way or another. SB 1070 has rocketed race relations issues, on a decline in recent years, back to a spotlighted position on the national and some would argue global stage.

While you may or may not support Arizona’s attempt to curb illegal immigration, the important thing is that you take action to prevent it from negatively impacting the productivity of your organization.

Potential SB 1070 Impacts to Prepare For

While Arizona Senate Bill 1070 is only applicable within the confines of the state, its passage causes ramifications that extend much farther in scope that all organizations will need to prepare for. Some of the issues you should be contemplating include:

Ramifications for Organizations with No Ties to Arizona

  • Employee conflict — SB 1070 has reignited debate about immigration issues in the United States, and in forums across the country individuals who feel strongly one way or the other are talking. Should the debate spill into the workplace either accidentally or as a means to instigate conflict, populations most connected to the issue will likely be affected emotionally. Emotional conflicts can wreak serious havoc on productivity levels and often require managers and HR representatives to engage in conflict resolution. It might be a good time to remind employees and managers about avoiding bias in the workplace and to review all processes that relate to conflict resolution, communication, and performance management.
  • Specific concerns for Hispanic employees — while SB 1070 doesn’t focus specifically on individuals of Hispanic origin, Arizona does sit on the border with Mexico, and much of the illegal immigration plaguing the state is attributed to Hispanic immigrants seeking employment in the U.S. How your organization reacts to the passage of SB 1070 will send a clear message to first-, second-, and third-generation immigrants about your organization’s view on the value and need for immigrant labor. Missteps may have long term implications on your employment brand, recruiting ability, and sales potential.
  • A renewed focus on diversity — immigration and diversity are closely linked, so as the debate about immigration rockets to center stage, so too will diversity issues. While your organization may take a strong position supporting diversity, it is likely that small issues that would otherwise resolve themselves may take on more charged paths, resulting in an increase in formal complaints of discrimination.
  • A renewed focus on employment eligibility — SB 1070 makes it a felony in Arizona to not verify employment eligibility via E-Verify and to maintain records of verification for all employees. The increased visibility of the consequences of hiring individuals not legally permitted to work in the United States might lead to organizations outside Arizona double-checking their existing workers, tightening up of hiring policies and processes, and an increase in eligibility questions from hiring managers.
  • Economic boycotts of Arizona — organizations large and small are lining up to voice their distaste for Arizona’s actions by boycotting companies based in Arizona and prohibiting business travel to or through the state. California’s two largest cities, San Francisco and Los Angeles, have already taken action to sever contracts with vendors based in Arizona, and state lawmakers are considering expanding the boycott statewide. Large conventions are also canceling plans to hold events in the state, the largest so far being the 11,000-member Immigration Lawyers Association. While your organization may or may not use its economic prowess to influence political issues, chances are some of your employees may feel strongly about doing so and refuse to participate in company activities that involve Arizona.
  • Wage pressure — individuals of Hispanic origin, including many from Mexico, make up a significant portion of the working population in a number of states. Employers in the agricultural, hospitality, foodservice, and construction industries in Nevada, Colorado, and Utah may find supplies of non-immigrant workers who bounce from employer to employer under special non-immigrant visas in shorter supply. As the supply of labor decreases, labor costs are likely to increase. Other states bordering Mexico (California, New Mexico, and Texas) however, will likely see an increase in non-immigrant labor interest.
  • Global issues — the extensive international press coverage surrounding this issue may make it more difficult for U.S. companies to sell products or to recruit in countries where the population is sympathetic to open borders. Even if your firm isn’t involved in the conflict, expect some guilt by association.
  • Union concerns — many unions appear to be actively protesting the renewed focus on immigration status, so if any of your employee classes are represented by a union or is the subject of union organizers, expect more questions and an increase in the number of grievances/complaints related to this issue.
  • Retention issues — as the economy heats up, retention will become a major issue regardless of this immigration conflict. Expect all politically motivated employees to use “how you handle this immigration issue” as a factor in their decision on whether to stay or leave.

Ramifications for Organizations That Employ Individuals in or Who Travel to Arizona

  • Travel and exposure issues — SB 1070 gives law enforcement officials the right to stop, question, arrest, and detain any individual they suspect may be in the U.S. illegally. While it has the potential to impact many employee populations, individuals who work in the transportation industry or in locations subject to a large police presence may be even more impacted. Employers may find existing employees with a legal right to work in the U.S. but prone to racial profiling to avoid certain situations.
  • Productivity issues — whatever happens in your employees’ personal lives will also impact their ability to concentrate on their work. If an individual employee or their close friend or family member has an immigration concern, it likely will negatively affect the employee’s morale and productivity. Even school-related immigration issues may distract your employees focus and productivity.
  • Employee transfers — expect a portion of your current employees, especially those most likely to be profiled as possible illegal immigrants, to show an increased interest in transferring out of the state. You may also experience an increase in difficulty getting liberal-leaning employees to transfer into the state.
  • Recruiting issues — Recruiting individuals from outside the state to work within Arizona will be more complicated. While individuals who support the law might be more willing to work in Arizona, others including diverse individuals and liberal-leaning individuals would likely be the more difficult to sway.
  • Retention issues — Expect a portion of your current employees, both Hispanic and non-Hispanic, to want to leave the state. If you can’t provide them with transfer opportunities, they may choose to leave your firm and seek employment with another organization out of state.
  • Business impacts — firms subject to statewide boycotts, including those in the travel and hospitality industry, need to prepare for short-term downturns. The stock price of individual firms might also be impacted if analysts and the public perceive that the firm may benefit or be harmed by the immigration issue.
  • HR issues — while few of the bills provision specifically focus on employer responsibilities, the bill has far-reaching implications for the workforce in general, and HR leaders need to be proactive at identifying and responding to employee concerns, including those voiced anonymously. Periodically asking the employee population what information they need, and understanding their expectations regarding your organization’s response will help ensure minimal impact. Establish a single point of contact for employees and managers who will be held accountable for managing the overall response to the issue. Corporate council will need to be consulted to determine if practices and procedures (including privacy issues) need to be updated as a result of the new law.
  • Absenteeism — expect and increase in absenteeism and late arrivals by employees likely to be profiled as illegal immigrants by authorities and detained while legal status is verified.
  • Management training — local managers and supervisors will need to be provided with training or educational materials to prepare them for questions and problems encountered. Executives will need coaching on what to say and what not to say to employees and the media.
  • Local wage pressures — even more so than in the rest of the U.S., fewer available workers within Arizona will mean increased pressure to raise wages in order to attract the best.
  • Supplier issues — your suppliers and vendors that have large Hispanic employee populations might experience more service interruptions as labor issues manifest.

Final Thoughts

Many corporate executives and HR professionals consider the immigration issue a political one, but it is also a major business issue with ramifications that need to be addressed with decisive plans and clear communications. The initial challenge is for senior management and HR to develop a process that can identify likely issues early on, and develop a response plan or implement preemptive measures to prevent the issue from occurring. If your organization hasn’t set aside some time to assess how this issue will impact your business and your employees, the time to act is now. Obviously the immigration issue will become even more important if Congress acts on immigration reform or if more states enact similar legislation. The key phrase to remember is that “it’s better to be prepared than surprised.”

About the Author

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Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations. He’s a prolific author with over 900 articles and 10 books covering all areas of Talent Management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations / organizations in 30 countries on all 6 continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR and the Financial Times. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring”, Staffing.org called him “the father of HR metrics” and SHRM called him “One of the industries most respected strategists”. He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked #8 among the top 25 online influencers in Talent Management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on www.ERE.Net. He lives in Pacifica, California.