On Thursday, the Supreme Court issued a divided opinion on the constitutionality of Arizona’s law requiring every employer to register for E-Verify as a condition of conducting business in Arizona. Chamber of Commerce v. Whiting.

E-Verify, a voluntary pilot program operated by the Department of Homeland Security, requires participating employers to verify employment eligibility of all new employees within three days of hire through an Internet based system of Federal records. By a 5-3 vote (Justice Kagen did not participate in the decision), the Court upheld the constitutionality of the law against the Chamber of Commerce’s argument that the Federal Immigration Reform and Control Act of 1986 pre-empted state regulation. Several other states have enacted similar requirements, although only a few states (Arizona, Mississippi, Utah and South Carolina) require all employers to register. Eight other states require state contractors to register, and two states require state agencies to register. In addition, several municipalities, counties, townships and other local governments have begun to pass similar legislation.

The Court’s decision turned on the issue of whether or not the Federal law precluded, or in constitutional terms pre-empted, state regulation either by express or implied provisions. The Federal law provides that states cannot pass legislation which imposes civil or criminal penalties on those who employ unauthorized aliens "other than through licensing and similar laws." The decision, therefore, turned on whether or not the Arizona law was a licensing or similar law. Because the Arizona legislature tied the mandatory E-Verify requirement to the employer’s business license, and the penalty for violation may ultimately be the termination of the business license, the majority held the statute was a licensing law.

The decision to permit state and local laws regarding the Federal E-Verify program makes it more difficult for large employers to implement single compliance programs. The compliance program that satisfies Arizona law may not be appropriate for South Carolina or Ohio. The Court did not consider this concern, a problem that has become more severe with the proliferation of similar laws passed by local and county governments.

While Arizona continues to be at the forefront of states seeking to control illegal immigration, it is critical to note that this decision does not address the more recent Arizona law that imposes severe penalties on the undocumented immigrant. The Supreme Court addressed only the requirement that all employers in Arizona register and use the E-Verify system. The District Court in Phoenix found the critical sections of SB 1070, the more recent Arizona law, to be unconstitutional, and this decision was upheld by the Ninth Circuit Court of Appeals. Arizona has appealed this decision to the Supreme Court as well, but the Court has neither agreed to review this decision nor issued a decision. Because the two laws are very different, the decision in Chamber of Commerce vs. Whiting is not indicative of the Court’s review, if any, of the more restrictive law. We anticipate a decision on the constitutionality of the more restrictive Arizona law will come next summer.