One Federal Immigration System. Two Very Different State Employment Laws.

One Federal Immigration System. Two Very Different State Employment Laws.

Employment eligibility verification in the United States is governed by a single federal framework. Whether an employer hires a worker in Indianapolis or Portland, the same federal Form I-9 process determines whether an individual is authorized to work in the United States.

For employers operating across multiple states, however, compliance does not end with federal immigration law.

States continue to regulate many aspects of the employment relationship, including hiring practices, workplace protections, licensing, anti-discrimination requirements, and employer responsibilities. Against the backdrop of renewed federal immigration enforcement, some state legislatures have adopted laws that reflect markedly different policy priorities.

Indiana and Oregon provide two recent examples.

Both states recently enacted legislation addressing how employers should respond to issues involving work authorization and immigration status within the employment relationship. Yet rather than attempting to redefine who may lawfully work in the United States, each legislature focused on regulating different aspects of the employment relationship after federal law establishes that framework.

The result is two very different legislative approaches to issues arising at the intersection of immigration and employment.

One Federal Framework, Distinct State Responsibilities

Congress established the modern employment eligibility verification system through the Immigration Reform and Control Act of 1986 (IRCA). Under that framework, employers verify the identity and employment authorization of newly hired employees by completing Form I-9. Many employers also participate in E-Verify, either voluntarily or because federal or state law requires it.

Federal law establishes who may lawfully work in the United States.

State legislatures, however, retain broad authority to regulate the employment relationship. They establish workplace protections, define employer obligations, regulate business licensing, prohibit discrimination and retaliation, and adopt numerous other employment standards that operate alongside federal law.

That division of authority allows states to enact immigration-related employment laws without creating separate immigration systems. Instead, states increasingly regulate what employers must do after federal law establishes who is authorized to work.

Indiana and Oregon illustrate how states can pursue different legislative priorities while operating within the same federal framework.

Indiana Prioritizes Employer Accountability

Indiana's Senate Enrolled Act 76, which took effect on July 1, 2026, reflects a legislative emphasis on employer accountability. Rather than changing the federal employment eligibility verification process, the law establishes additional state enforcement mechanisms directed at employers that knowingly or intentionally recruit, hire, or continue to employ unauthorized workers.

Among its most significant provisions, the law makes it unlawful for an employer to knowingly or intentionally recruit, hire, or continue employing an unauthorized worker. At the same time, the legislature recognized that employers acting in good faith should have an opportunity to demonstrate compliance. The statute therefore provides that employers may satisfy a "reasonable diligence" standard by using the federal E-Verify system or by following industry-standard practices designed to confirm work authorization.

The legislation also establishes a new enforcement framework. If the Indiana Attorney General determines there is probable cause to believe an employer violated the law, the Attorney General may initiate an enforcement action seeking injunctive relief and other statutory remedies. Before bringing an initial enforcement action, however, employers generally receive notice and an opportunity either to demonstrate compliance or to certify that unauthorized workers have been terminated and that appropriate hiring practices have been implemented.

For employers found to have violated the statute, the potential consequences become progressively more significant. Depending on the circumstances and an employer's compliance history, courts may suspend or revoke operating authorizations, place employers on probationary status with ongoing reporting obligations, and ultimately impose permanent revocation of operating authorizations for repeated or willful violations.

The legislation also prohibits employers from retaliating against employees who communicate or cooperate with the Attorney General concerning compliance with the statute.

Collectively, these provisions reflect a legislative judgment that employers should exercise meaningful diligence in confirming work authorization and that the state should possess enforcement tools when employers knowingly or intentionally fail to satisfy those obligations.

Oregon Prioritizes Employment Protections

Oregon's House Bill 4111 reflects a different legislative focus.

Rather than expanding state enforcement against employers, the legislation establishes new protections for employees who lawfully update their federal employment authorization while expressly preserving employers' ability to comply with federal verification requirements.

Beginning June 5, 2026, Oregon employers may not discharge, discriminate against, retaliate against, or otherwise take adverse action against an employee because the employee updates or attempts to update personal information based on a lawful change in federal employment authorization documentation.

Importantly, the legislation also recognizes that employers remain subject to federal employment eligibility verification requirements. It expressly provides that employers may continue taking actions necessary to comply with federal employment authorization verification laws, preserving the employer's ability to satisfy its federal obligations while protecting employees from adverse treatment based solely on lawful updates to their work authorization.

The bill reaches beyond the employment relationship by limiting the circumstances under which a party's or witness's immigration status may be introduced in civil litigation. Except in specified circumstances where immigration status is essential to proving a legal claim or determining a particular remedy, that evidence generally may not be admitted. The legislation further establishes procedural safeguards, including confidential filings and in camera judicial review before such evidence may be considered.

Taken together, these provisions reflect a legislative emphasis on protecting employees who lawfully update their federal work authorization while reducing the likelihood that immigration status will unnecessarily influence employment decisions or unrelated civil proceedings.

Different Priorities. One Federal Framework.

At first glance, Indiana and Oregon appear to be moving in opposite directions. In reality, they're addressing different questions that arise in the employment relationship.

Indiana focuses principally on employer obligations before and during hiring and continued employment. Oregon focuses more heavily on employer obligations after an employee lawfully updates work authorization and on how immigration status may be treated if employment-related disputes later arise.

Taken together, the statutes illustrate a broader trend. Federal law establishes who is authorized to work in the United States. States increasingly regulate what employers must do after that determination has been made.

For multistate employers, that means satisfying federal employment eligibility requirements is only one part of the analysis. The same employer can complete the same Form I-9 process in every state while remaining subject to different state laws governing the employment relationship.