Employers show caution on immigrant hiring in wake of new state law, experts say

Just over a month into its debut, a new state law focused on immigrant labor is starting to resonate with employers.

The Indiana Fairness Act went into effect July 1, giving the state attorney general the power to compel local governments and agencies to comply with federal immigration laws. While the legislation primarily builds on Indiana’s anti-sanctuary statute, it also establishes strict hiring requirements for employers — a practice historically handled by the federal government.

“I think it’s really trying to show toughness in this area, trying to send a message that Indiana and the (attorney general), in particular, is serious about immigration enforcement,” said Sari Long, a partner in Faegre Drinker Biddle & Reath LLP’s Denver office and an immigration and employment law expert. “But it’s having the intended effect of making Indiana employers pay attention. It’s doing, I think, what it’s intended to do, which is, [to say] ‘We’re not messing around.’”

Those following the act say it is starting to make some companies focus more on worker eligibility requirements even though it may be too early to weigh the young law’s ultimate impact.

“People are starting to go, ‘Oh, what if they raid me?’” said Gregg Keesling, the founder and president of RecycleForce, an organization that provides job training to formerly incarcerated individuals.

Keesling said the overall immigration crackdown across the nation and state has, in a way, benefited the individuals who come through RecycleForce. He has found that employers are more willing to hire his workers over those born outside the United States.

“The immigration actions have dramatically changed what employers are starting to think about doing and actually doing,” he said.

Federal versus state

Senate Enrolled Act 76, which the Legislature passed earlier this year, included stricter language requiring state governmental bodies to cooperate with federal immigration authorities.

The law, also known as the Indiana Fairness Act, also included a sizeable section intended to curb Indiana-based employers from intentionally hiring immigrants working in the country without legal permission. If the state attorney general determined a business violated the law, he could impose severe fines.

This specific provision of the law, found in Indiana Code 22-5-9, mirrors federal requirements for unauthorized immigrant labor.

Title 8 U.S.C. § 1324a makes it unlawful for a person or other entity to hire or recruit an immigrant they know to be unauthorized.

Faegre Drinker partner Long said the act does not impose any new burdens on employers that weren’t already required by federal law. Because of that, she said she thinks the employer provisions were added for political reasons.

“I think that the act was more intended to target governmental bodies,” Long said. “And then (they) tacked on some of these other provisions to make it seem as if it were not just focused on those governmental bodies.”

A spokesperson for Indiana Attorney General Todd Rokita said enacting laws similar to federal statutes allows Indiana to “set its own enforcement priorities and fill the gaps where federal authorities alone cannot act in every case.”

“Given the severe harm that employment of illegal aliens inflicts on U.S. workers, it is long past time for Indiana to have its own prohibition so the state can complement federal action on this issue,” the spokesperson said in a written statement.

Long said she has seen heightened interest among businesses in complying with federal I-9 forms, which employers must complete to verify the identity and employment eligibility of every employee.

“We’re getting a lot of requests to assist with internal I‑9 audits,” Long said.

Construction and manufacturing

Following an April tour of the under-construction Signia by Hilton near the Indiana Convention Center, Rokita told reporters his office would go where the complaints lead them — and he indicated that the construction industry would likely be a key focus.

Nationwide, there were 1.7 million immigrants working without legal permission in the construction labor force, according to 2023 estimates from the Center for Migration Studies.

In 2025, the Center for Immigration Studies estimated that a total of 10.8 million such workers made up the national labor force. That’s about 6% of the total U.S. workforce of 171 million people, according to the U.S. Bureau of Labor Statistics.

Rob Henderson, the executive director of Indiana State Building & Construction Trades Council, said he doubts the new law will hurt the council’s affiliated unions. He added that the council did not take a formal position on the Fairness Act.

“Each of our affiliated unions has a process in place to utilize the U.S. Department of Homeland Security’s E-Verify system before dispatching an individual to a jobsite,” Henderson said in a written statement.

E-Verify is the government’s internet-based system that compares Form I-9s to federal records to check an
employee’s eligibility.

A company will not be found in violation of Indiana’s new law if it uses E-Verify to confirm an individual’s work eligibility.

Sam Charron, vice president of government affairs at the Indiana Manufacturers Association, said the association worked with lawmakers to avoid establishing E-Verify as the only “safe harbor.”

The law also includes enforcement exceptions for companies that engage “in diligence to confirm work eligibility of an individual in a manner that is consistent with industry standard best practices.”

Before it finally passed, a version of the Fairness Act specified the Indiana attorney general would prescribe best practices for confirming work eligibility. But Charron said IMA worked to get that language removed.

“We wanted to make sure that there wasn’t some strict document that, within the four corners of that document, there is best practices that the attorney general has, and that makes it a little bit more difficult … if a dispute were to get to court and a judge is interpreting the statute,” Charron said.

Critics of the law and the employment provision have pointed out that E-Verify may not be a reliable system, causing false alerts that make an employer decide to not hire a worker.

But Henderson said none of the Building & Construction Trades Council’s affiliated unions have expressed concerns over the system’s reliability.

Charron said he thinks E-Verify is “as good of a system” that’s available right now, and whether it is reliable or not should be left up to debate by statisticians and politicians.

“It’s the standard that we’ve got right now,” Charron said.

The concerns

While the Fairness Act does not replace the existing federal requirements, it does make for statewide enforcement, allowing the attorney general to investigate claims of violations.

Rokita has already shown an interest in immigration-related investigations over the past year. He has used civil investigative demands to probe businesses, nonprofit organizations and government agencies. But that push has been met with some resistance lately.

At the end of July, the Indiana Court of Appeals affirmed a lower court’s ruling that Rokita’s demands into the Haitian Center of Evansville and Amcor, an Evansville manufacturing company formerly known as Berry Global, lacked substance.

“The record makes clear that the Attorney General is at most trawling for evidence of wrongdoing — looking for information that might eventually trigger an investigation, based on his alleged concern that someone, somewhere might be involved in labor trafficking,” wrote Judge Nancy Vaidik.

And last week, the 7th Circuit Court of Appeals concluded that a local organization, Exodus Refugee Immigration Inc., had shown it would likely succeed in arguing that its decision to share information about a planned federal immigration operation in Bloomington fell under constitutionally protected speech.

Even with some successful challenges to the attorney general’s probing, Faegre Drinker’s Long said right now is still a “very risky and scary” time even for private employers who follow the rules for hiring non-U.S. citizens.

“How do you navigate an environment where you’re under suspicion?” she said. “I think it is very risky, regardless of how compliant your policies and practices are.”•