States May Require Businesses to Use E-Verify

Posted on Fri, Jun 17, 2011

The United States Supreme Court recently ruled that states may require businesses to use the federal E-Verify program. The court’s ruling also permits states to penalize businesses that hire undocumented workers. States may impose conditions on a business’s ability to obtain and keep a business license, including suspending or revoking a business license.

E-Verify is a federally created program that allows employers to use an Internet-based system to electronically check employees’ work authorization status. E-Verify compares Form I-9 documentation against federal government databases to verify employees’ employment eligibility.

Arizona enacted a law that gave the state the power to decide whether to suspend or revoke the licenses of Arizona employers that knowingly or intentionally employ workers not authorized to work in the United States. The law also created circumstances under which the state must suspend or revoke such employers’ business licenses. The Arizona law further required Arizona employers to use E-Verify.

A lawsuit challenged the state law on the grounds that federal immigration laws pre-empted Arizona’s law and that the federal E-Verify program is voluntary and Arizona had no right to mandate its use. The U.S. Supreme Court disagreed with these challenges in a 5-3 decision (with one justice not participating), and concluded that the law was legal. Chamber of Commerce v. Whiting, No. 09-115, 563 U.S. (2011), 2011 WL 2039365

The court noted that the federal Immigration Reform and Control Act (IRCA) explicitly states that though state and city governments cannot impose civil or criminal sanctions for immigration violations, state and city governments can impose sanctions through the use of licensing conditions on businesses operating in the state. According to the court, Congress specifically preserved such authority for states and did not intend to prevent them from using appropriate tools to enforce immigration laws.

The court further concluded that federal law did not stop states from mandating the use of E-Verify. Though federal law made the E-Verify program voluntary at the national level, the law expressed no intent to stop states from requiring businesses to use E-Verify.

This decision will likely put pressure on other states to implement mandatory E-Verify laws. A few other states, including Utah, Mississippi and South Carolina, already enacted laws mandating that all employers use the E-Verify program. Other states enacted laws mandating the use of E-Verify in various degrees — for example, only requiring state employers to use E-Verify.

Some city governments also require the use of E-Verify. For example, a Mission Viejo, California, city ordinance requires the city and certain employers with city contracts to verify the eligibility of new employees through E-Verify.

Best Practices

E-Verify is not mandatory in California, except for certain federal contractors or subcontractors. Other employers can choose whether they want to use E-Verify. Regardless of whether you use E-Verify, you must verify that each new employee is legally eligible to work in the United States.

  • If you are not certain whether you are required to use E-Verify, consult legal counsel

  • If you use E-Verify, you must post two required notices (the OSC Employee Rights Poster and the You Should know Your Rights and Responsibilities Under E-Verify poster). These notices are available from HR Allen Consulting Services

  • Consistently use the same employment verification procedures

  • Correctly and completely fill out all required information on Form I-9

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