On June 25, 2012, the U.S. Supreme Court struck down three of four provisions of Arizona's S.B. 1070 that the U.S. government challenged on grounds of preemption.

States Cannot Legislate Certain Areas of Federal Immigration Law

The U.S. government challenged Arizona's S.B. 1070, enacted in April 2010, which imposed state penalties on undocumented immigrants on the basis that it was preempted by federal law. On June 25, 2012, the U.S. Supreme Court struck down three of four provisions of Arizona's S.B. 1070 that the U.S. government challenged on grounds of preemption. The sections of the law that were struck down are:

• Section 3, which created a misdemeanor criminal offense for "willful failure to complete or carry an alien registration document." The Court ruled that, with respect to alien registration, Congress intended to preclude states from enacting or enforcing their own regulations.
• Section 5(C), which created a misdemeanor criminal offense for an "unauthorized alien to knowingly apply for work, solicit work in a public place or perform work as an employee or independent contractor." The Court ruled that the Immigration Reform and Control Act (IRCA) regulated employment by immigrants not authorized to work. IRCA did not impose criminal penalties on unauthorized employment, and such penalties imposed by Arizona are preempted.
• Section 6, which gave state officers the authority to arrest without a warrant any person the officer had "probable cause" to believe "ha[d] committed any public offense that makes [that person] removable" from the United States. The Court ruled that this section would give state officers greater authority to arrest noncitizens than authority given by Congress to trained federal immigration officers, and therefore, the provision is preempted.

The provision that the Court did not strike down was section 2(B), the "Show Me Your Papers" provision, which requires Arizona law-enforcement officers to attempt to determine the immigration status of persons they stop, detain or arrest if they have a "reasonable suspicion" that the person is undocumented. It also requires authorities to determine the immigration status of anyone who is arrested. There is a concern that this provision may lead to racial profiling—that minorities will be stopped or arrested on some pretext, so that an officer can check on their immigration status. However, S.B. 1070 was not challenged on this basis, and racial profiling was not addressed in the decision.

Impact of State Immigration Laws Like Arizona's on Business

According to the Immigration Policy Center (http://www.immigrationpolicy.org), anti-immigration legislation like that enacted in Arizona, Alabama and Georgia, aiming to make life challenging for undocumented immigrants, can be detrimental to local economies, causing labor shortages, stunting economic growth and increasing the cost of doing business:

• Alabama's H.B. 56 could shrink the state’s gross domestic product (GDP) by up to $10.8 billion, according to Professor Samuel Addy of the University of Alabama. He estimates that the loss of thousands of unauthorized immigrants who earn between $15,000 and $35,000 annually could result in: 70,000 to 140,000 lost jobs with $1.2 to $5.8 billion in earnings; a $2.3 to $10.8 billion reduction in Alabama's GDP, in 2010; a $57 to $264 million loss in state income and sales tax collections; and $20 to $93 million lost in local sales tax collections.
• Georgia's agriculture industry experienced high labor shortages after the passage of Georgia's immigration enforcement bill (H.B. 87). According to a Georgia Department of Agriculture–conducted survey of farmers, 56 percent were experiencing difficulty finding workers. Early reports from the state estimate economic losses for the 2011 growing season to be between $300 million and $1 billion.
• A Georgia Restaurant Association survey found that 49 percent of surveyed restaurants reported labor shortages, and 88 percent were concerned about future shortages. Lack of workers and related business losses have reduced some restaurants’ revenue by as much as $80,000 per month.
• State immigration enforcement laws mean businesses must incur additional costs, according to economist Jeremy Thornton of Samford University, due to the "shadow costs" employers incur when they take steps to protect themselves from the law's penalties. Businesses are likely to spend more on employee screening to protect themselves, and there could also be increased litigation costs because any worker could sue the employer if it has hired an unauthorized worker.

The DREAM Act: Implementation of a Deferred Action Program for Young Undocumented Immigrants

In response to the failure of the DREAM Act in Congress, on June 15, 2012, President Obama announced that certain young undocumented immigrants would be granted temporary relief from deportation. The Department of Homeland Security has announced that undocumented immigrants who meet these criteria would be eligible:

• Entered the United States under the age of sixteen;
• Continuously resided in the United States for at least five years preceding June 15, 2012, and present in the United States on the date of June 15, 2012;
• Are currently in school, have graduated from high school, have obtained a general education development certificate or have been honorably discharged as a veteran of the Coast Guard or Armed Forces of the United States;
• Have not been convicted of a felony offense, a significant misdemeanor offense, multiple misdemeanor offenses, or who do not otherwise pose a threat to national security or public safety; and
• Are not above the age of 30.

What This Means for Employers

Employers may benefit from this policy because young, law-abiding immigrants with educational credentials would be allowed to obtain work authorization. This would bring productive young undocumented immigrants, who may already be working illegally, into the legal workforce, increasing the legal labor pool and raising tax revenue.

For Further Information

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.