Kentucky Senate to Vote on Bill Targeting Contractors Who Employ Unauthorized Workers

The Kentucky Senate will soon vote on a bill that punishes contractors who hire unauthorized alien workers. House Bill 441, which would modify K.R.S. 337, was passed on Thursday, March 5 by a vote of 87-7.

Under the current language, before being awarded a public contract—which includes all state and local government contracts, a bidder must submit a sworn affidavit stating that it has no unauthorized alien employees or independent contractors, and that the bidder is registered and participating in a federal work authorization program to verify the identity and employment eligibility of employees as required by the Immigration Reform and Control Act of 1986.

The bidder must also submit a list of all subcontractors and independent subcontractors that will be working under its contract or independently, and sworn affidavits from each of its subcontractors of whatever tier that they likewise employ no unauthorized aliens. If a contractor fails to maintain its registration, participation and compliance with a federal work authorization program, or if any of its subcontractors of any tier likewise fail to do so, then the public agency is to cancel the contract and pay the contractor only for actual costs incurred in the performance of the work up to that date. Prior to receiving final payment under such a contract, the contractor must submit to the agency a sworn affidavit stating that it has not knowingly hired any unauthorized alien worker during the contract term, and like affidavits from every subcontractor of any tier.

The bill imposes stiff penalties for noncompliance. If a contactor is found to have intentionally or knowingly hired an unauthorized alien as described, that contractor shall be banned from contracting with a public agency for a period of five years. The only safe harbor provided in the bill for contractors is that it is a defense that the employer, contractor or subcontractor in good faith provided information on an employee or prospective employee to a federal work authorization program and received authorization to hire the employee.

An additional provision provides that a subcontractor shall indemnify a contractor for damages occasioned by the subcontractor’s noncompliance with the law. However, that may be of little comfort to a contractor affected by such noncompliance, and of little help if a small subcontractor’s net worth is insufficient to cover the damages.

The version that came out of the House Licensing and Occupations Committee was evidently much more rigid than the current text. That version did not allow contractors to rely on the I-9 verification process and left contractors open to a five year ban themselves for noncompliance by their subcontractors. Under the House-approved version of the bill, “subcontractors” are defined in such a way as to include within their definition materialmen and suppliers.

Posted by: C. Michael Shull, III

Categories: Current Developments / Legislation, Labor and Employment