U.S. Supreme Court Upholds Arizona Law Which Revokes Business Licenses Of Companies Which Intentionally Employ Illegal Immigrants; Court’s Decision Clears Way For New Jersey Bills Which Would Require Employers To Use E-Verify

The federal Immigration Reform and Control Act of 1986 (the “ICRA”) preempts “any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit, or refer for a fee for employment, unauthorized aliens” (emphasis added).  8 U.S.C. § 1324a(h)(2).  This post sometimes refers to the italicized clause as the “savings clause” of  section 1324a(h)(2) of Title 8 of the U.S. Code.

On May 26, 2011, in Chamber of Commerce v. Whiting, No. 09-115, 563 U.S. __ (May 26, 2011), the U.S. Supreme Court, in a 5 to 3 decision, upheld a recently enacted Arizona statute, the Legal Arizona Workers Act of 2007, Ariz. Rev. Stat. §§ 23-211, 212, 212.01 (the “Legal Arizona Workers Act”), which provides that the business licenses of employers, in the Grand Canyon State, which knowingly or intentionally employ unauthorized aliens may be, and in certain circumstances must be, suspended or revoked.

See here for this author’s July 27, 2010 post on what businesses in New Jersey are required to do to avoid hiring illegal immigrants.

In Whiting, the U.S. Supreme Court further upheld that portion of the same Arizona statute which requires all employers in Arizona to verify the legal status of their new hires using the federal government’s voluntary E-Verify program.  The Whiting decision makes clear that bills pending in the New Jersey State Senate, S1842, and in the New Jersey State Assembly, A2600, which would require employers in the Garden State to use E-Verify are lawful.

Among other things, the Legal Arizona Workers Act requires the State’s courts to suspend, for a minimum of 10 days, all business licenses of a company which, for the first time, intentionally has employed an unauthorized alien.  Moreover, the Arizona statute mandates that the State’s courts permanently revoke all business licenses of a company which, for the second time, intentionally has employed an unauthorized alien.

In Whiting, the U.S. Supreme Court affirmed the Ninth Circuit’s judgment dismissing the U.S. Chamber of Commerce’s lawsuit, which contended that the Legal Arizona Workers Act unlawfully “impos[es] civil or criminal sanctions,” 8 U.S.C. § 1324a(h)(2), against businesses which hire unauthorized aliens.  The Whiting Court held that the Arizona statute is a “licensing or similar law[]” within the meaning of the savings clause of section 1324a(h)(2) of Title 8 of the U.S. Code and, as a result, “that the Arizona law is not preempted.”

In holding that the IRCA does not preempt the Arizona law, the Whiting Court gave weight to the Arizona law’s express provision that state investigators must verify the work authorization of an assertedly unauthorized alien with the federal government, and ” ‘shall not attempt to independently make a final determination on whether an alien is authorized to work in the United States.’ ”

E-Verify is a free, web-based program which, on a voluntary basis, allows employers to electronically verify newly retained employees’ work authorization documents.  The E-Verify program was created by the federal Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (the “IIRIRA”).

In Whiting, the U.S. Supreme Court held that the IIRIRA does not preempt the Arizona statute’s requirement that employers in Arizona use E-Verify.  The Whiting Court reasoned that, while the IIRIRA renders voluntary the participation by employers in E-Verify, that statute “contains no language circumscribing state action” making mandatory the use by employers of E-Verify.

As referenced above, legislators introduced in May 2010 a bill in the New Jersey State Senate, S1842, and an identical bill in the New Jersey State Assembly, A2600, which would force New Jersey employers to verify the legal status of their new hires using the federal government’s E-Verify program.  Also in May 2010, the New Jersey bills were referred to the Labor Committees of the State Senate and the State Assembly, respectively.  If these New Jersey bills are not enacted into law by the end of the current legislative term in January 2012, they will expire.

The Whiting decision makes clear that New Jersey bills S1842 and A2600, in requiring employers to utilize the U.S. government’s E-Verify program, are not preempted by federal law.  In other words, the pending New Jersey bills are lawful.  Indeed, much like the Legal Arizona Workers Act, the New Jersey bills provide that State, county or local officials must verify the immigration status of an allegedly unauthorized alien with the federal government, and “shall not attempt to independently make a final determination on whether an alien is authorized to work in the United States.”

If your company needs assistance or guidance on a labor or employment law issue and your company is located in the New Jersey area, call Attorney David S. Rich at (347) 941-0760.