Reproduced with permission from Law360. Copyright © Portfolio Media, Inc.

By Ian Macdonald

On June 25, 2012, the U.S. Supreme Court issued a split decision regarding Arizona’s 2010 immigration law, Senate Bill (SB) 1070. The court made clear that the federal government sets immigration policy and states will not be allowed to preempt federal powers.

States may, however, continue to require businesses to register for and use E-Verify. Recent debate makes it clear that neither U.S. Congress nor states will be allowed to ignore immigration issues.

In its decision, the Supreme Court recognized the challenges that Arizona faces as a result of undocumented workers. The court made it clear, however, that Arizona could not preempt federal law. The court struck down Section 3 of the Arizona law, which made it a crime for an individual to fail to apply for and carry proper immigration documentation showing lawful status.

The court also struck down Section 5, which made it illegal for an undocumented individual to apply for and perform work, and Section 6, which authorized the warrantless arrest of individuals where there is probable cause to believe the person has committed a public offense that makes the person removable from the United States.

With respect to all three sections, the court made it clear that states were not to step into the policies of the federal government and that certain functions with respect to the admission, deportation and documentation of foreign nationals are solely the responsibility and power of the federal government.

The court did not back away from the Supremacy Clause, asserting that it preempts Arizona and other states from enacting immigration laws that conflict with the “careful framework Congress adopted” for “maintaining a comprehensive and unified system to keep track of aliens within the Nation’s borders.”

The court held that upon review of the Immigration Reform and Control Act of 1986 (IRCA), Congress set criminal penalties aimed specifically at employers — not undocumented workers — and, therefore, Arizona’s statute conflicted directly with the regulatory requirements approved by Congress.

The court upheld controversial Section 2B of the Arizona law, which requires state law enforcement officers to check an individual’s immigration status during a lawful stop or arrest. While the provision was allowed to stand, it is unclear how Arizona and those states with similar laws authorizing law enforcement officials to check the immigration status of individuals will go about verifying immigration status.

It is also unclear if these states will detain individuals while they are verifying immigration status if the reason for the lawful stop has been resolved. In its decision, the court only noted that delaying the release of individuals solely to verify their immigration status may cause constitutional issues, but did not opine further on this issue. Depending upon how states carry out the verification, additional litigation may be initiated.

It is important for employers to understand that the Supreme Court’s May 2011 decision allowing Arizona and other states to mandate that companies doing business in their states register and use E-Verify is still good law. Although IRCA contains an express preemption clause barring states from imposing civil or criminal sanctions, the court held a state or local government can impose “licensing” sanctions for a violation of federal immigration law under IRCA.

Several states have enacted laws that require employers to use E-Verify. The laws are not uniform, attach different phase-in enactment dates for participation depending on the size of the company and attach different attestations for compliance and varied penalties for noncompliance.

For example, North Carolina and Georgia require employers to enroll in E-Verify, and both have opted for a gradual phasing-in approach as to when employers must register for E-Verify depending on the number of employees. Noncompliance in Alabama may lead to a three-year probation where a company is required to submit quarterly reports to the local district attorney of each new employee hired. Utah sanctions include monetary fines as well as revocation of a business license for violation of the mandatory E-Verify state law.

The varied landscape of state-mandated E-Verify registration can be frustrating for a company operating in multiple states. At present, employers need to comply with both federal and state E-Verify requirements.

The two recent Supreme Court decisions will play a crucial role in mapping the political landscape as the presidential election draws closer. President Barack Obama recently provided a stopgap measure and removed the threat of deportation for undocumented children.

President Obama’s strategy for immigration reform includes:

1. Continuing to fulfill the federal government’s responsibility to secure our borders;
2. Demanding accountability for businesses that break the law by undermining American workers and exploiting undocumented workers;
3. Strengthening our economic competiveness by creating a legal immigration system that reflects our values and diverse needs; and
4. Requiring responsibility from people who are living in the United States illegally.

Gov. Mitt Romney’s strategy for immigration reform includes:

1. Attracting more highly skilled immigrants;
2. Making the temporary worker visa system functional;
3. Securing the country’s borders;
4. Discouraging illegal immigration; and
5. Enforcing the law.

With both presidential candidates weighing in on immigration and two recent Supreme Court decisions, you should expect to see heated discussion on the need for comprehensive immigration reform between now and the November election.

Further, you should expect continued immigration-related enforcement actions at the federal level from both U.S. Immigration & Customs Enforcement and the U.S. Office of Special Counsel (OSC).

Adding to immigration enforcement concerns, employers should expect random audits and compliance actions at the state level, including monetary fines for noncompliance as well as increased authorization for state law enforcement agents to verify immigration status of individuals stopped for other lawful reasons.