U.S. Supreme Court Upholds Arizona’s Employee Sanctions Law

July 10, 2011 Business & Corporate Law

In June 2011, the U.S. Supreme Court upheld the Legal Arizona Workers Act that the Arizona legislature passed in 2007.

The Act, which went into effect January 1, 2008, requires employers to use E-Verify to ensure that workers are legally authorized, and it provides for the suspension or revocation of the business licenses of Arizona employers that knowingly or intentionally employ unauthorized aliens.

After the Act’s passage, a coalition of advocacy groups and business interests challenged its legality, arguing mainly that federal law expressly preempts “any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ … unauthorized aliens.” 8 U.S.C. § 1324a(h)(2).

The legal challenge made its way to the U.S. Supreme Court, which, in denying the challenge, found that the Legal Arizona Workers Act was precisely the kind of “licensing and similar laws” for which the federal law expressly makes an exemption. The Supreme Court rejected the various arguments put forth that the phrase “other than through licensing and similar laws” in the federal law should be construed narrowly so as to block state laws such as Arizona’s.

The Supreme Court went on to address the argument that Arizona’s law must nevertheless be stricken because it conflicts with federal immigration law. In its ruling, the Supreme Court wrote:

Arizona’s procedures simply implement the sanctions that congress expressly allowed Arizona to pursue through licensing laws. Given that Congress specifically preserved such authority for the States, it stands to reason that Congress did not intend to prevent the States from using appropriate tools to exercise that authority.”

The Court also addressed the argument that requiring employers to use E-Verify impedes the purpose of federal immigration law because federal law allows other employment verification procedures. In rejecting that argument, the Court noted the federal government’s consistent reliance on and support of the E-Verify program and the fact that federal immigration law restricts only the Secretary of Homeland Security (not the states) in requiring the use of E-Verify.

In short, the Court found that the Legal Arizona Workers Act does not conflict with federal immigration law; rather, the Legal Arizona Workers Act’s sanctions and E-Verify requirement complement federal immigration law.


Now that the Legal Arizona Workers Act has been upheld, what should Arizona employers know and do?

  • Under the Act, an employer must verify the employment eligibility of new employees through the E-Verify program and keep a record of the verification throughout the employment or for three years, whichever is longer.
  • Employers may register online for the E-Verify program. Proof of verifying the employment authorization of an employee through the E-Verify program creates a rebuttable presumption that an employer did not knowingly employ an unauthorized alien.
  • An employer who knowingly employs an unauthorized alien will be required to terminate all unauthorized workers and will be placed on a three-year probationary period. The employer’s business license may also be suspended for up to 10 days. (“Knowingly” means actual knowledge, or knowledge through notice of facts and circumstances, that would lead a reasonable person, through reasonable care, to know of a certain condition.)
  • An employer who intentionally employs an unauthorized alien will be required to terminate all unauthorized workers, will receive a mandatory suspension of its business licenses for 10 days and be placed on a five-year probationary period. (An employer would be “intentional” in the hiring of an unauthorized alien if it was the employer’s objective to engage in the prohibited conduct.)
  • An employer who knowingly or intentionally employs an unauthorized alien while on probation under the scheme will receive a mandatory revocation of its business license.