States Can Punish Businesses That Hire Illegal Immigrants

By Stephanie Rabiner, Esq. on May 26, 2011 | Last updated on March 21, 2019

In a 5-3 ruling, the Supreme Court ruled in favor of Arizona on Thursday, stating that federal immigration statutes do not preempt a 2007 mandatory E-Verify law that also punishes businesses that knowingly hire illegal immigrants.

This decision is a big coup for Arizona and other states that have sought to curb the hiring of undocumented workers, also marking the state's first big "win" in its battle against illegal immigration.

In 2007, Arizona passed the Legal Arizona Workers Act, which revokes or suspends licenses of businesses that knowingly hire illegal immigrants.

It also imposes mandatory E-Verify use for all new hires.

The Chamber of Commerce sued, arguing that the licensing provision was preempted by the federal Immigration Reform and Control Act (IRCA), which makes it illegal for a person to knowingly hire illegal immigrants.

However, as the Court notes, IRCA includes a savings clause, which allows states to impose sanctions, via "licensing and similar laws," on businesses that employ illegal workers.

Arizona's licensing revocations fall squarely into this category, even going so far as to comport with federal definitions of "license" and "unauthorized aliens."

As for the Act's mandatory E-Verify clause, the plaintiffs argued that it was also preempted by the federal law that created the system.

Again, the Court didn't buy the argument, stating that not only did Congress leave mandatory E-Verify use up to the states, the licensing portion of the statute explicitly states that employers cannot be punished if they used the system and it gave an improper response.

In other words, the mandatory E-Verify provision grants protection from being punished under the licensing provision.

Only a small number of states currently punish employers that hire illegal immigrants or have passed mandatory E-Verify laws, but after this ruling, expect to see similar laws crop up all over the country.

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