Indiana has enacted Senate Enrolled Act No. 76, Employment of Unauthorized Aliens, a new employment law effective July 1, 2026. Because the penalties for noncompliance can be significant, Indiana employers should review their hiring and onboarding practices now.
1. What the Law Changes
The law applies to employers hiring in Indiana and prohibits knowingly or intentionally recruiting, hiring, or continuing to employ workers who are not authorized to work in the United States on or after July 1, 2026. It also prohibits retaliation against employees who communicate with the Indiana Attorney General about compliance with the law.
2. Compliance Requirements
Employers must complete Form I-9 for each new hire to verify identity and authorization to work in the United States. Employers must use "reasonable diligence" to confirm work eligibility before recruiting, hiring, or continuing to employ an individual. Employers may demonstrate reasonable diligence in two primary ways:
First, employers may use E-Verify, the electronic work authorization program operated by the U.S. Department of Homeland Security, to verify work eligibility, unless the circumstances would put a reasonable person on notice that the verification was unreliable.
Second, employers may use diligence consistent with "industry standard best practices." The statute does not define that phrase, and as of now the Indiana Attorney General has not offered any official guidance about what constitutes industry best practices. Employers should carefully review, implement, and document their I-9 procedures.
3. Penalties and Enforcement
The Indiana Attorney General may bring an enforcement action when there is sufficient reason to believe a violation of this law occurred within the past three years. For a first violation, the Indiana Attorney General must give notice, after which the employer has 15 business days to provide evidence of reasonable diligence or submit an affidavit confirming corrective action.
If a court finds a violation, penalties may include suspensions ranging from five to 180 business days, permanent revocation of operating authorizations at violating locations or statewide, probation for six months to two years, and quarterly reporting to the Indiana Attorney General on hiring practices, compliance efforts, and work-eligibility documentation.
4. Practical Steps for Employers
Employers should consider the following steps:
- Review hiring and onboarding procedures. Evaluate whether current policies meet the statute’s "reasonable diligence" standard. Because the standard is not precisely defined, E-Verify is likely the safest compliance path for Indiana-based hires.
- Document any non-E-Verify process. Employers relying on alternative methods should retain records showing how their verification process reflects industry best practices and how it compares to procedures used by similarly situated employers.
- Maintain robust records. Keep documentation of work-eligibility verification steps for all employees, including any documentation discrepancies. If an employer receives a probable cause notice, it may need to produce evidence of compliance within 15 business days.
- Train hiring managers. Ensure employees responsible for recruitment and onboarding understand the new requirements, know how to complete I-9 forms properly, and can consistently follow the employer’s verification procedures.
5. Questions?
Noncompliance under this new law can carry significant consequences. If you have questions about how these changes may affect your organization or would like assistance conducting a compliance review, please contact our experienced employment law attorneys. For more information, contact Shannon Middleton or Tessa Doyle at (765) 423.700 or shannon.middleton@gutweinlaw.com or tessa.doyle@gutweinlaw.com.