One Federal Immigration System, Two State Employment Laws: Indiana vs. Oregon

Understanding the One Federal Immigration System and State Employment Laws

The United States has one federal immigration system that governs who can work legally. But state employment laws can be very different. Indiana and Oregon are perfect examples. Both states operate under the same federal Form I-9 and E-Verify rules, yet they have created very different laws for employers and employees. This article explains how these two states approach employment verification and what it means for businesses.

How Federal Immigration Law Works

Congress created the modern employment eligibility verification system through the Immigration Reform and Control Act of 1986 (IRCA). Under this system, employers must verify the identity and work authorization of all new hires by completing Form I-9. Many employers also use E-Verify, either because federal or state law requires it.

Federal law decides who can legally work in the United States. But states have the power to regulate many parts of the employment relationship. They set rules for hiring practices, workplace protections, business licensing, anti-discrimination laws, and employer responsibilities. This means states can pass immigration-related employment laws without creating their own separate immigration systems.

Indiana: Focusing on Employer Accountability

Indiana passed Senate Enrolled Act 76, which took effect on July 1, 2026. This law focuses on making employers responsible for verifying work authorization.

Key Provisions of Indiana's Law

• Knowingly hiring unauthorized workers is illegal: Employers cannot knowingly recruit, hire, or keep employing workers who are not authorized to work.
• Good faith defense: Employers can show they acted in good faith by using E-Verify or following industry-standard practices to confirm work authorization.
• Enforcement by the Attorney General: If the Indiana Attorney General finds probable cause of a violation, they can take legal action to stop the violation and seek other remedies.
• Notice and opportunity to comply: Before an enforcement action, employers usually get a chance to prove compliance or fix the issue.
• Progressive penalties: Courts can suspend or revoke business licenses, place employers on probation, or permanently revoke operating authorizations for repeated or willful violations.
• Protection against retaliation: Employers cannot retaliate against employees who cooperate with the Attorney General.

This law shows Indiana's belief that employers should take real steps to check work authorization. The state wants strong tools to enforce these rules when employers knowingly break them.

Oregon: Focusing on Employee Protections

Oregon passed House Bill 4111, which takes a different approach. Instead of punishing employers, it protects employees who lawfully update their work authorization.

Key Provisions of Oregon's Law

• No adverse action for updating work authorization: Starting June 5, 2026, employers cannot fire, discriminate against, or retaliate against an employee because they update or try to update their federal work authorization documents.
• Employers can still follow federal law: The law allows employers to take actions needed to comply with federal verification requirements.
• Limits on using immigration status in court: In civil lawsuits, a person's immigration status can only be introduced if it is essential to proving a claim or determining a remedy. There are strict procedures for using this evidence.

Oregon's law focuses on protecting employees who legally update their work status. It also reduces the chance that immigration status will unfairly affect employment decisions or unrelated legal cases.

Comparing the Two Approaches

At first glance, Indiana and Oregon seem to be moving in opposite directions. But they are actually addressing different parts of the employment relationship.

• Indiana focuses on what employers must do before and during hiring to verify work authorization.
• Oregon focuses on what employers must do after an employee lawfully updates their work authorization.

Both states operate under the same federal immigration system. They just have different priorities for regulating the employment relationship.

What This Means for Multistate Employers

For employers who operate in multiple states, compliance is more than just following federal immigration law. You must also understand and follow the different state laws that affect your hiring and employment practices.

Here are some practical tips for multistate employers:

• Stay informed: Keep track of new state laws in every state where you have employees.
• Use E-Verify consistently: It helps show good faith compliance in states like Indiana.
• Train your HR team: Make sure they understand both federal and state requirements.
• Review your policies: Update your hiring and employment policies to match state-specific rules.
• Consult legal experts: Work with employment lawyers who know the laws in each state.

Conclusion

Indiana and Oregon show that one federal immigration system can lead to very different state employment laws. For employers, this means federal compliance is just the beginning. You also need to navigate a growing number of state laws that regulate what happens after work authorization is established.

By understanding these differences and staying proactive, you can protect your business and your employees.