The federal Immigration Reform and Control Act (IRCA) makes it illegal to knowingly hire or recruit an alien who is unauthorized to work in the United States. While IRCA imposed civil and criminal penalties on employers who violate this provision (when it is actually enforced by the Justice Department), it restricts the ability of states to implement similar penalties with one conspicuous exception. The federal law (8 U.S.C. §1324a(h)(2)) specifically allows states to impose sanctions on such employers “through licensing and similar laws.” That is exactly what Arizona did in 2007 when it passed the Legal Arizona Workers Act (LAWA).
LAWA allows Arizona courts to suspend or revoke the licenses necessary to do business in the state of any employer who knowingly or intentionally employs an unauthorized alien. The U.S. Chamber of Commerce, along with various civil rights organizations, sued Arizona claiming that IRCA expressly and impliedly preempts the Arizona law. The Chamber argued that because the law only suspends and revokes licenses rather than grant them, it is not really a licensing law. However, Chief Justice John Roberts dealt with this strained and dubious legal argument in short order, calling it “without basis in law, fact, or logic.” In fact, Arizona’s definition of a business license “largely parrots the definition of ‘license’ that Congress codified in the Administrative Procedure Act.” Further, Arizona does not interfere with federal law by making its own determination of whether an alien is “unauthorized.” No independent determination can be made – the state courts must “consider only the federal government’s determination.” The state statute very carefully tracks the language of IRCA. Thus, the Court concluded that Arizona’s licensing law clearly falls with the plain text of the savings clause of IRCA and is not preempted by federal law.
The Court also gave short shrift to the Chamber’s claim that employers will err on the side of discriminating against potential employees rather than risk the “business death penalty” of losing their license to do business because they have hired unauthorized workers.” As the Chief Justice pointed out, there is no sanction against employers for merely hiring unauthorized workers. The state law’s sanctions are only triggered if an employer hires such a worker intentionally, knowing that they are not authorized to be employed. An employer acting in good faith need not have any fear of being sanctioned, especially since they enjoy a safe harbor from liability if they use the federal E-Verify system to check on prospective employees.
In fact, the federal E-Verify system was the second part of this lawsuit. The state law makes it mandatory for Arizona employers to use the E-Verify system. The Chamber claimed this requirement was also preempted by IRCA because Congress made use of the E-Verify system voluntary. The Chamber relied on a provision in IRCA that prohibits the Secretary of Homeland Security from requiring any employer (outside the federal government) from using E-Verify absent a prior violation of federal law. However, the Court disagreed with the preemption claim since there is no language in IRCA preventing state action.
In fact, the federal government had agreed there was no preemption in 2008 during the Bush administration when it pointed to Arizona’s E-Verify mandate as an example of a permissible use of the system – although that did not prevent the Obama Justice Department from taking the exact opposite (and losing) position in this case. The Court concluded that Arizona’s requirement in no way interferes with the E-Verify system. In fact, the federal government has consistently expanded and encouraged the use of E-Verify by all 50 states.
Given the lack of political will exhibited in Washington for many years to enforce the federal sanctions against employers who knowingly hire illegal aliens, the implementation by Arizona and other states of these types of substantive state licensing laws is a crucial development. One of the keys to solving the problem we are experiencing with huge numbers of illegal immigrants is making it difficult for them to work. Enforcement of these types of prohibitions is essential to encouraging self-deportation by individuals who are not entitled to be here.