The U.S. Supreme Court's recent decision in Chamber of Commerce of the United States v. Whiting, which upheld an Arizona statute that sanctioned employers for knowingly or intentionally employing unauthorized aliens, means that employers with multi-state operations will have to conform to a patchwork of laws rather than a single, uniform federal standard. It also means that we can expect many more states to enact such laws.

The Legal Arizona Workers Act provides that the licenses of employers can be revoked or suspended in certain circumstances where the employers knowingly or intentionally employ unauthorized aliens. The Act uses the federal government's definition of "unauthorized alien" and applies federal standards in determining who is an "unauthorized alien."

The Act also requires all Arizona employers to use the E-Verify federal electronic system to confirm that new hires are legally authorized to work in the United States.

The plaintiffs in Whiting, a coalition of the U.S. Chamber of Commerce and various immigrants' rights groups, had argued that the Arizona statute was preempted by the federal Immigration Reform and Control Act of 1986. The IRCA does generally preempt state or local laws that impose sanctions for employing unauthorized aliens. However, the IRCA contains an exception for "licensing and similar laws." The Court held that the "business license" provisions of the Arizona statute fell within the exception and were not preempted. Although there are limits on a state's power to regulate immigration, the Court affirmed states' authority to establish conditions for the issuance of business licenses.

The Court upheld the E-Verify requirement on the ground that it did not conflict with federal law.