Yesterday, the U.S. Supreme Court upheld (5-3 vote) an Arizona law mandating
all employers in that state to use E-Verify. The law also revokes business
licenses for employers who knowingly hire unauthorized workers.
Opponents of the Arizona law, including the Obama administration
(interestingly, current DHS Secretary Napolitano is the former Arizona governor
who, in 2007, signed the Arizona law), argue that state laws imposing sanctions
on immigration-related activity trespass on an area of traditional federal
E-Verify is an Internet-based employment verification system administered by
DHS. Under federal law, use of the system is voluntary except for certain
federal contractors. The Supreme Court , however, held that “[t]he fact that the
Federal Government may require the use of E-Verify in only limited circumstances
says nothing about what the States may do.” According to the Supreme Court, only
DHS is precluded from mandating the use of E-Verify.
Further, the Supreme Court noted that the “consequences of not using E-Verify
under the Arizona law are the same as the consequences of not using the system
under federal law. In both instances, the only result is that the employer
forfeits the otherwise available rebuttable presumption that it complied with
The Supreme Court specifically noted that the Arizona law had since been
amended to include other consequences of failing to use E-Verify, but because
the suit was brought prior to that amendment, those consequences were not before
the Court. Therefore, the Court’s reasoning leaves open the possibility that if
other consequences were imposed by state law, it might think differently.
Because the penalties imposed by the Arizona law involve business licenses,
the Supreme Court held that the Arizona law meets the licensing exception to
federal immigration provisions specifically preempting any state or local law
that imposes civil or criminal sanctions on those who employ illegal immigrants.
8 U.S.C. § 1324a(h)(2). Specifically, the Legal Arizona Workers Act suspends or
revokes the business licenses of state employers who knowingly or intentionally
employ unauthorized aliens.
For employers, there is one main difference – penalties imposed at the
federal level may include fines, debarment and possible prison time; whereas,
the state penalties include revocation of an employer’s business license. The
effects of the state law may be more immediate and severe to an employer. It may
be a death sentence – completely shutting down the business throughout the
The Supreme Court’s ruling is the first high court challenge to myriad state
laws recently imposed to crack down on illegal immigration, and a victory for
those pursuing immigration reform at the state level. It is likely that many
states that have been letting Arizona lead the way, will join in with their own
versions of the Arizona law tied to business licenses.
With the Supreme Court’s endorsement, the Arizona law will become the
blueprint for other states that wish to mandate the use of E-Verify, and also to
impose their own set of penalties on employers who knowingly hire unauthorized
workers. Several states have already passed such legislation, but many more are
now expected to follow suit.
Another Arizona law that requires police officers to investigate the
immigration status of those they suspect are illegal immigrants is still pending
in lower courts. The effect of yesterday's decision on this law is unclear, as
the decision was based on a state licensing exception created by relevant
federal law. No such exception exists for the exercise of other state powers.