Justices' Ruling on Arizona Immigration Law Has Limited Workplace Impact, Analysts Say

With an emphasis on practical strategies to improve productivity and performance, and limit potential liabilities, Bulletin to Management™ concisely analyzes new developments in employment and human resources management.

By Elliott T. Dube  

The U.S. Supreme Court's recent decision to strike down a provision of Arizona's controversial anti-illegal immigration law making it a crime for an unauthorized immigrant to seek or engage in work in the state will not have a substantial effect on employers by itself, analysts who have followed the case told BNA.

On June 25, the court invalidated three sections of Arizona's S.B. 1070, including Section 5 that makes it a state misdemeanor for “an unauthorized alien to knowingly apply for work, solicit work in a public place or perform work as an employee or independent contractor” (Arizona v. United States, U.S., No. 11-182, 6/25/12; 63 BTM 201, 6/26/12).

The court found that the federal Immigration Reform and Control Act is a “comprehensive” framework for preventing the employment of illegal immigrants. This framework provides only civil penalties for aliens who seek or engage in unauthorized work, the court noted. It determined that Congress made a “deliberate choice” not to impose criminal sanctions on such workers. Section 5 of S.B. 1070 imposes such sanctions and thus impermissibly conflicts with federal law, the court held.

Multiple analysts told BNA that the court's decision leaves states aiming to curb the employment of illegal immigrants with little other than the option of mandating employers' use of E-Verify, the federal government's electronic employment verification system.

Whiting Has Greater Implications for Employers

Michael Fix, senior vice president with the Migration Policy Institute and co-director of the National Center on Immigrant Integration Policy, told BNA June 28 that the court created a “more direct impact” on employers when it held last year that states may mandate employers' use of E-Verify.

In its May 2011 decision in Chamber of Commerce v. Whiting ( 131 S. Ct. 1968, 32 IER Cases 225; 62 BTM 169, 5/31/11), the Supreme Court upheld the Legal Arizona Workers Act.

The statute, enacted in 2007, allows the state to revoke the business licenses of employers that knowingly hire illegal immigrants and requires employers in the state to enroll in E-Verify.

The Whiting court found that the federal Immigration Reform and Control Act does not preempt the Legal Arizona Workers Act because the state statute is a “licensing provision.”

Therefore, the court said, the state statute is not subject to the IRCA's express preemption of “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.” The Arizona statute does not otherwise conflict with federal law, the court concluded.

To the extent that Arizona companies need workers and increasingly are struggling to find them in part because of the “leakage” of immigrants out of the state, Fix said, the court's S.B. 1070 ruling will not do anything to plug the leak. He said the ruling might end up exacerbating the problem, as the court upheld a particularly contentious provision in S.B. 1070 that requires Arizona officers stopping, detaining, or arresting a person to make a reasonable attempt to determine the person's immigration status if there is “reasonable suspicion” that the person is an alien who is unlawfully present in the United States.

Garrick Taylor, vice president of communications with the Arizona Chamber of Commerce and Industry, told BNA June 27 that the impact of the court's S.B. 1070 decision is primarily in the area of law enforcement and that it will have “very little effect” on the workplace.

Employers already face “steep” and “dire” consequences if they do not meet the requirements of the Legal Arizona Workers Act, Taylor said. He added that E-Verify signs have become common in Arizona workplaces.

Taylor said his organization remained neutral during the legislative process that resulted in S.B. 1070's enactment. He said the chamber only stepped into the controversy surrounding the law when critics of its “reasonable suspicion” section and other provisions began to launch boycotts of travel within Arizona and of the state's businesses.

Other States' Laws in Danger

Other states followed Arizona's lead in passing stringent anti-illegal immigration laws. Two of them, Alabama and South Carolina, enacted provisions that criminalize an illegal immigrant's seeking or engaging in work, similar to Section 5 of S.B. 1070.

Crystal Williams, executive director of the American Immigration Lawyers Association, told BNA June 29 that these provisions are “toast” now that the Supreme Court has issued its ruling.

In the ruling's wake, for states to make E-Verify enrollment mandatory for their employers is “pretty much the only avenue that they have” to combat the employment of unauthorized foreign-born workers, Williams said.

“Other than that, they are pretty much not in the business of criminalizing or otherwise acting on employment within the state,” she said. “It is a totally federal matter.”

During a June 28 teleconference held by ImmigrationWorks USA, Ben Winograd, a staff attorney with the American Immigration Council, pointed out that a business has to go through its state to obtain its license, whereas an immigrant has to go through the federal government to obtain authorization to work in the United States.

“So it's almost a jurisdictional issue--who's controlling whose licenses,” he said.

Uniform Requirements Preferable

“I think that employers overall are breathing some sigh of relief that they for the most part only have to worry about one set of laws and not 50 sets of laws,” Williams said.

Ian Macdonald, co-chairman of Littler Mendelson's Immigration & Global Migration Practice Group in Atlanta, echoed that belief.

He told BNA June 27 that many companies operating in multiple states have been left “scratching their heads” and have needed to reformat their internal policies to comply with different states' anti-illegal immigration laws. Ultimately, employers desire predictability, he said.

“I think the message to employers is: While this does indicate the court's opinion on immigration and whether it's a federal question, on a pragmatic day-to-day doing-business level, there is no change,” Macdonald said. “Companies must diligently ensure that they comply with state laws, particularly considering the fact that states are now moving from implementation of these laws to an enforcement and penalty collection phase.”

He added that he has been handling cases in which employers have received state audit letters requesting that they confirm and submit evidence that they have enrolled in E-Verify. Failure to meet states' E-Verify requirements can result in fines and other penalties for employers.

“Until the federal government comes out with a bill moving E-Verify from a voluntary system to a required system for employers, I think that there's going to be room for states to fill that void,” Macdonald said.

But a continuously uncertain economic climate poses a practical problem for states moving toward mandatory E-Verify use by employers, Louis Moffa of Montgomery McCracken Walker & Rhoads in Cherry Hill, N.J., said during the ImmigrationWorks USA teleconference. These states might face opposition from chambers of commerce and local businesses claiming that such mandatory E-Verify use would have a job-killing effect, he said.

By Elliott T. Dube