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The court held that Sections 16 and 17 are both likely preempted by the Immigration Reform and Control Act of 1986, 8 U.S.C. § 1324a(h)(2), which states: “The provisions of this section preempt any state or local law imposing civil or criminal sanctions (other than through licensing or similar laws) upon those who employee, or recruit or refer for a fee for employment, unauthorized aliens.” In reaching this conclusion, the court stated that Sections 16 and 17 contain “sanctions” within the meaning of the federal statute.

The ruling does not address the E-Verify provisions of HB 56 previously addressed in this blog, and those provisions will go into effect as scheduled. Employers should continue to make preparations to ensure that they comply with the E-Verify provisions on a timely basis. Failure to comply may result in an employer being debarred from state contracts, having its state government grants or incentives cancelled, and its business license suspended or revoked for up to 60 days. For a second offense, an employer may have its business license revoked permanently, so serious consequences for non-compliance are still intact following the September 28 ruling. The preliminary injunction will remain in effect until final judgment is entered on the lawsuit, which likely will not occur for several months. In the meantime, Alabama employers should continue to monitor this case and consider seeking the advice of experienced employment and/or immigration law counsel to determine the best strategies and practice following this ruling. 

House Bill 56

On June 9, 2011, Alabama Governor Robert Bentley signed into law HB 56, a sweeping immigration law covering many topics including law enforcement, contract law, education, and employment. Of particular concern for employers are two provisions: sections 16 and 17.

Section 16 prohibits employers from deducting as business expenses wages or compensation paid to an unauthorized alien, and businesses that knowingly violate this provision can be liable for a penalty of 10 times the deduction claimed. Section 17 makes it a discriminatory practice for an employer to fail to hire a job applicant, or discharge an employee, who is either a U.S. citizen or authorized alien while retaining or hiring an individual the business knows, or reasonably should know, is an unauthorized alien. Employers violating section 17 can be subject to a civil suit, and the prevailing party may recover compensatory damages and reasonable attorneys’ fees.

None of the three lawsuits directly challenges the E-verify provisions of HB 56. However, the lawsuits filed by the religious and public interest entities do seek to have the law declared unconstitutional in its entirety.

The DOJ’s Complaint

The DOJ’s complaint alleges that the provisions of HB 56 are preempted by federal law and violate the Supremacy Clause of the U.S. Constitution. The Supremacy Clause, found in Article VI, Clause 2 of the Constitution, states that the “Constitution, and the Laws of the United States . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” The DOJ contends that “the federal government has preeminent authority to regulate immigrations matters” which is “derive[d] from the United States Constitution and numerous acts of Congress.” While the DOJ acknowledges that states may exercise their police power in a way that incidentally or indirectly affects aliens, the complaint asserts that states “may not establish [their] own immigration policy or enforce state laws in a manner that interferes with the federal immigration law.”

If HB 56 becomes law, the DOJ contends, “[i]t will conflict with longstanding federal law governing the registration and employment of aliens.” As the DOJ points out, the licensing savings clause of the Immigration Reform and Control Act of 1986 (IRCA), 8 U.S.C. § 1324a(h)(2), states that “[s]tate or local laws imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ, or recruit or refer for a fee for employment, unauthorized aliens” are specifically preempted by the IRCA. Accordingly, because HB 56 imposes sanctions on employers and potential employers of unauthorized aliens, and it is not a licensing or similar law, HB 56 is preempted. Moreover, the DOJ argues that the federal government has not ceded to the states its legislative and regulatory authority over immigration, noting that “Congress has further exercised its authority over immigration and the status of aliens.” Federal law, argues the DOJ, prohibits hiring, recruiting, or referring for a fee, unauthorized aliens, and the continued employment of unauthorized aliens once an employer discovers their unauthorized status.

Implications for Employers

In the meantime, employers should assume that the challenged provisions of HB 56 will go into effect no later than September 29, 2011. Because the E-Verify provisions, as noted above, have not been specifically challenged, employers should continue preparations to be enrolled in E-Verify by the statutory deadlines of January 1, 2012 (for employers who contract with or receive incentives or grants from the state) and April 1, 2012 (for all other employers). Regardless of whether the law is upheld or struck down, employers should continue to take steps to ensure they remain in compliance with federal immigration law. These steps include: (1) auditing current Form I-9's to correct any errors; (2) training personnel on properly completing Form I-9's; and (3) reviewing, revising, and developing policies for storing and retaining I-9 documents.

Because the unsuccessful parties may appeal the matter, complete and final resolution may be several months away. Thus, employers should consider seeking the advice of experienced employment and/or immigration law counsel to determine the best strategies and practices following the court's ruling.

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More often than not, according to the Chronicle’s analysis of received documents, no criminal or civil penalties will follow if an employer’s payroll is purged of undocumented employees. Although audits have become the current administration’s immigration enforcement strategy, and ICE has issued fines for noncompliance, the Chronicle’s report suggests that many of the larger fines resulted from actions taken (or commenced) during the previous administration.

In response to the analysis, Brett Dreyer, the head of ICE’s worksite enforcement unit, stated that ICE tries to identify and focus on employers who are “turning a blind eye” to workers’ legal status (as opposed to those who unintentionally accept fraudulent documents). 

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