The New Immigration Law And Alabama Business

Posted on July 27, 2011


Since Governor Robert Bentley signed the state’s strict immigration law in April, debates and class action suits have been in the works across the state. To quickly summarize the law, which will be in effect starting in September, it will be legal for law enforcement officials to detain individuals who are unable to provide the proper documentation of citizenship or other documents that legitimize their presence in the United States. The hardships this new law imposes upon Alabama’s immigration population are somewhat obvious.  However, few have been discussing the impact that compliance with the new law with have on Alabama’s economy. Economists and business analysts are now predicting that the law will harm Alabama’s statewide economy.

In particular, the aspect of the law that affects businesses is the portion that stipulates that all businesses must verify the legitimacy of an employee’s documents through an online system called e-verify. E-verify is an Internet-based system where an employer enters in information about a prospective employee, and that information is compared to the records in the Social Security Administration and the Department of Homeland Security. While E-verify exists for many businesses already, the new measure in the immigration bill will force businesses to be accountable for those they hire through the e-verify system.

A recent article in the American Independent suggests that businesses remained quiet in the discussions over the final piece of legislation, though there was discontent expressed by lobbying groups advocating for business rights. In industries such as construction, food service, and agriculture, among others, the workforce is heavily populated by Hispanic immigrants, who may or may not have the legal right to work. Bob Lowry of the Huntsville Times comments that the law could eliminate a large portion of the working population and as a result eliminate new business possibilities in a state with a high unemployment rate.

Another aspect of the law that could impact businesses and lead to job loss is that businesses caught employing an individual without the legal right to work, may have their business license suspended—putting the owners and employees temporarily out of work.  Further offenses would lead to a permanent revocation of the business license.  Lowry also identified the e-verify system as a complication in itself because of the number of businesses based in rural areas without the Internet capabilities to conduct a proper verification of an individual’s right to work.

The question that arises here, is whether or not an immigration law partly designed to “protect American jobs” will in truth drive up prices during difficult economic times and make it more difficult for small businesses to operate and compete in the marketplace.