This morning, the Supreme Court upheld a controversial Arizona law which requires employers operating in the state – as part of its business licensing law – to comply with the federal 1986 Immigration Reform and Control Act and to utilize the federal E-Verify program to confirm the eligibility of employees to legally work in the United States. Chamber of Commerce of the United States v. Whiting, No. 09-115 (2011). The Chamber of Commerce and civil rights groups had united to oppose the Arizona law, which they contended violated Congressional supremacy to govern immigration and was both explicitly and implicitly preempted. However, the District Court, the Ninth Circuit and the Supreme Court each concluded that the ICRA had left an explicit exception for states to regulate the hiring of immigrants through business licensing laws and that the Arizona statute paralleled the federal statute in its requirements in order to avoid any conflict with federal law.
Prior to the 1986 passage of the IRCA, the Supreme Court had held that immigration control was a federal power, but the states still had the authority under their sovereign policing powers to prohibit the knowing employment of individuals not entitled to reside or work in their state. However, the IRCA explicitly preempts states from imposing any civil or criminal sanctions upon employers for hiring unauthorized aliens, except through licensing and other similar laws. 8 U. S. C. §1324a(h)(2). The "Legal Arizona Workers Act provides that the licenses of state employers that knowingly or intentionally employ unauthorized aliens may be, and in certain circumstances must be, suspended or revoked. The law also requires that all Arizona employers use a federal electronic verification system [i.e., E- verify] to confirm that the workers they employ are legally authorized workers."
The challenged Arizona statute required the state attorney general or county attorney, upon receipt of a complaint, to verify with the federal government the work eligibility status of the challenged employee. Only the federal government could determine work eligibility, not local government. In addition, every employer is required to utilize e-verify upon hiring a new employee. Further, good faith compliance with the I-9 requirements of the IRCA and the e-verify system create an affirmative defense for the employer. Once unauthorized aliens are identified, the statute requires the local government to notify ICE or local police and to bring an enforcement action against the employer. The first violation of the statute can result in a suspension of the employer's business license, an order to terminate all unauthorized aliens, and quarterly reporting requirements. A second violation can lead to revocation of the employer's business license.
The Court easily dismissed the argument that the Arizona statute was not a licensing scheme and that the federal exemption was limited to licensing of migrant workers. The Court also rejected the argument that the Arizona statute conflicted with the federal IRCA because the Arizona statute incorporated IRCA definitions and standards and explicitly provided that determinations of work authorization were to be made exclusively by the federal government. Only when the federal government confirms that the individual is an unauthorized alien can the state government prove its burden that the individual is not authorized to work in Arizona. Finally, the Court rejected the argument that the state law upset the balance struck by the IRCA to avoid over-burdening employers and discouraging employment discrimination. The Arizona law did not impose any material additional burdens on employers and state law already prohibited national origin discrimination.
In 1996, Congress authorized the creation of the pilot e-verify program, but precluded making it mandatory outside the federal government. (However, federal contractors are required to utilize it pursuant to a 2008 Executive Order). Employers who verify the employment eligibility of newly hired employees establish a rebuttable presumption that they have complied with the IRCA. There is no provision in the 1996 enabling statute precluding states from making mandatory the use of e-verify. Indeed, when the 2008 Executive Order was challenged by government contractors and the Chamber of Commerce, the federal government pointed out that its use was already mandatory in Arizona and a few other states. Since that time, the federal government has expanded the e-verify program and encouraged its use. Indeed, the United States, in its amicus brief, disputed that the e-verify system could not handle the use by all employers in all 50 states. The United States also disputed any challenge to the accuracy of the e-verify system.
IRCA expressly reserves to the States the authority to impose sanctions on employers hiring unauthorized workers, through licensing and similar laws. In exercising that authority, Arizona has taken the route least likely to cause tension with federal law. It uses the Federal Government's own definition of "unauthorized alien," it relies solely on the Federal Government's own determination of who is an unauthorized alien, and it requires Arizona employers to use the Federal Government's own system for checking employee status. If even this gives rise to impermissible conflicts with federal law, then there really s no way for the State to implement licensing sanctions, contrary to the express terms of the savings clause.
In light of this decision, it can be expected that additional states will adopt their own version of the Arizona statute. This decision does not resolve the additional challenges to other provisions of Arizona's immigration control laws which are still working their way through the courts.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney
