State And Local Immigration Laws: The New Challenge For Business

By the American Subcontractors Association and used with permission | September 28, 2010

New laws and regulations at every level of government are likely to change the way subcontractors recruit, hire and manage employees. During 2007, more than 1,400 immigration-related bills were introduced in the state legislatures – more than twice as many as in all of 2006. One hundred seventy of these new bills were signed into law in 41 states. An inventory of state immigration laws is available on the National Conference of State Legislatures website at

Business compliance with immigration and employee verification laws has been a complicated issue. It will become even more complicated now that state governments are increasingly taking it upon themselves to legislate in an area of the law that has traditionally been a matter of exclusive federal jurisdiction.

  • Will you be prepared for it if it does?
  • How will it impact your business?

Following are questions drafted by the American Subcontractors Association intended to identify the issues and impacts of state and local immigration laws most important to the employment and business practices of construction subcontractors.

Employment authorization:

Current Federal Law: Employers must complete a Form I-9 and inspect documents that prove authorization to work.

State Law or Proposal: Does your state require employers to go beyond the federal Form I-9 and use additional or different documents? Does your state require or prohibit the use of the Federal E-Verify system, or any other particular database?

Vicarious Liability:

Current Federal Law: Employers are not currently liable for the status of employees working for subcontractors working for the employer.

State Law or Proposal: Does your state hold employers responsible for the immigration status of employees of your subcontractors?


Current Federal Law: Current federal law utilizes a tiered system of penalties that gets harsher for subsequent violations. Criminal penalties, including jail, only apply if a distinct pattern of willful violation of law can be proven.

State Law or Proposal: Do criminal penalties apply to employers in your state? Are they harsher than federal law? Can employers be disbarred from work on public contracts for immigration violations? Can an employer’s business license be suspended or revoked for immigration violations?

Safe Harbor:

Current Federal Law: Employers who act in good faith and properly fill out the Form I-9 and appropriately handle Social Security Administration no-match letters are entitled to an affirmative defense.

State Law or Proposal: Does the state law include a process that employers can follow to avoid being found in violation of the law?


Current Federal Law: DHS Immigration and Customs Enforcement division investigates complaints at its discretion.

State Law or Proposal: Does the state law mandate that all complaints be investigated? If so, are there protections in place to make sure the system isn’t abused for competitive purposes?

Document Retention:

Current Federal Law: The Federal Form I-9 must be retained on file for at least three years from date of hire.

State Law or Proposal: Does the state law require longer document retention periods? Does the state law require that additional documents be retained in addition to the I-9?

These are just a few examples of how various state and local laws already on the books go far beyond existing Federal law. Some additional considerations:

  • What about due process? Does your state law specify a process by which employers can appeal determinations of violations and get a fair hearing?
  • The construction industry is already experiencing a major labor shortage. How will these new laws affect your ability to recruit and retain employees?
  • What are the costs of complying with these new laws? Will your business be forced to hire new personnel or outsource services?

For more information, visit the American Subcontractors Association website at

DISCLAIMER: This article does not contain legal advice. Individual circumstances vary widely, so readers should consult their attorneys before acting on the premises described herein.

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