After much anticipation and speculation, the Supreme Court decided, by a 5-3 vote, on May 26, 2011, that, in essence, states may enact their own employment eligibility and employer sanction laws.

The name of the case is Chamber of Commerce of the United States v. Whiting. It began in 2007 when a group of Arizona businesses challenged a state law that requires E-Verify participation, and that revokes the business license of any employer who hires unauthorized workers. Michael B. Whiting is the Apache (AZ) County Attorney named as the defendant in this action.

The Arizona statute was written very cleverly. It won at every level from the district court up to the Supreme Court. Although federal law expressly prohibits states from regulating employment eligibility verification, there is an exception where states can make immigration compliance a condition to receiving a business license. The Chamber argued (and we agree) that the licensing exception just means businesses have to comply with federal immigration law, and that it does not give states the right to enact additional requirements, but the Chamber failed to convince five of the justices that. Moreover, federal law expressly prohibits mandating E-Verify, and the Court addressed that issue by simply finding that the law only prohibits federal, not state, mandate.

With the Supreme Court ruling, the legality of Arizona’s verification requirements is settled. Although the ruling does not necessarily give carte blanche to states to regulate immigration compliance however they want to, it undoubtedly provides strong legal basis and even stronger political cover for similar laws across the nation. Presently, more than half of all the states have some type of eligibility verification requirements, and the trend is growing. In the aftermath of Chamber of Commerce v. Whiting, we simply have to expect more states joining the ranks of Arizona and others already with verification laws on the books, and we may even see the state with existing verification requirements using the decision as political leverage to enact even harsher laws with an election coming up.

As such, what is not settled is how employers that do business in multiple states will have to manage a compliance program that satisfies all the different rules. Colorado, for example, has separate paperwork requirements in addition to the I-9. South Carolina has its own process, too, mandating that employers use E-Verify. If they don’t, then newly hired employees must have a valid South Carolina license or a license from another state with equally stringent anti-fraud measures. The result is that South Carolina would deny employment in its state even though a worker is employment-authorized under federal immigration law. The most glaring example of federal-state conflict was Florida, where, until this week, the governor’s executive order actually had required state contractors to use E-Verify on current employees, a practice prohibited by federal law unless the employer is a qualified federal contractor. Fortunately, after the business community voiced grave concerns about the “Catch-22” for several months, the governor reconciled that federal-state conflict. In addition, a myriad of unanswered questions, such as whether a state law reaches employees outside of the states’ boundaries, continue to confuse employers.

Employers need to do two things – First, understand that state requirements are here to stay, at least for awhile. Work with your in-house or outside immigration counsel to make sure that your compliance program addresses various state as well as federal requirements. Second, recognizing that the Supreme Court’s decision is based on “statutory construction” – meaning the justices interpreted Arizona’s law to be within the bounds of federal statute and therefore not preempted – employers should advocate stronger preemption language in federal law by voicing their concerns to members of Congress.

The Supreme Court has opened the floodgate to even more state action. We have to convince the Congress of the United States to restore some sanity to the process with stronger and clearer preemption law. At the same time, we must be prepared to comply with various and inconsistent requirements in multiple jurisdictions.