On May 26, 2011, the U.S. Supreme Court issued a ruling upholding an Arizona law penalizing businesses for knowingly hiring illegal immigrants. In a 5-3 vote, the court held federal immigration laws do not prevent Arizona from revoking the business licenses of companies that knowingly hire illegal immigrants.The Arizona law provides that a business can be denied a business license after a second violation of the Legal Arizona Workers Act of 2007. Indiana recently passed a law that also penalizes businesses that knowingly hire illegal immigrants (see my prior blog post Indiana Businesses Subject to New Immigration Law). 
While the Arizona law differs from the Indiana law in a number of respects, both require businesses use the E-Verify system to verify employment eligibility of potential employees. Eight other states have passed similar laws that punish businesses for hiring illegal workers. They are Colorado, Mississippi, Missouri, Pennsylvania, South Carolina, Tennessee, Virginia and West Virginia.
This ruling does not involve the much publicized Arizona law requiring police to check the immigration status of people under certain circumstances.  However the ruling does seem to reject the argument that states have no role in enforcing immigration laws.  This is some indication how the Court may rule on that more publicized Arizona law, which is moving through the courts and is expected to eventually reach the U.S. Supreme Court.  Additionally, it is some indication how the Court may rule on any challenge to the recently passed Indiana law penalizing businesses that knowingly hire illegal immigrants.
The court upheld the provision of the Arizona law requiring businesses use the E-Verify system to verify employment eligibility of potential employees, saying it is “entirely consistent” with federal law. The majority opinion written by Chief Justice John Roberts stated that the court had come to its decision because “the state’s licensing provisions fall squarely within the federal statute’s savings clause and that the Arizona regulation does not otherwise conflict with federal law.” Roberts indicated there was a "high threshold" for striking down a state law on the grounds that it was preempted by a federal law.
This ruling further indicates the importance of Indiana businesses enrolling and participating in the E-Verify system. If you have any questions regarding this case or any other immigration related issue, please contact the author, Christopher L. Lucas, or the Bowers Harrison attorney with whom you usually work.