Indiana's new immigration enforcement law, Senate Enrolled Act 76 (SEA 76), known as the FAIRNESS Act, took effect on July 1, 2026, and introduces significant new compliance considerations for employers operating in Indiana. SEA 76 does not replace existing federal employment eligibility verification requirements, including Form I-9 obligations. Rather, it establishes a new state-level enforcement framework that authorizes the Indiana Attorney General to investigate and pursue claims against employers that knowingly or intentionally recruit, hire, or continue to employ individuals who are not authorized to work in the United States.

As a result, employers in Indiana must now consider not only potential federal enforcement risks, but also the possibility of state investigations, penalties, and operational restrictions arising from employment eligibility verification issues.

What Has Not Changed in Indiana’s Employment Eligibility Verification Process

Indiana employers still must continue to comply with federal employment verification requirements, including:

• Completing Form I-9 for all new hires;
• Verifying identity and employment authorization documents;
• Retaining I-9 records as required; 
• Re-verifying employment authorization where required; and
• Refraining from knowingly hiring or continuing to employ unauthorized workers.

What SEA 76 Adds to Employer’s Compliance Considerations

SEA 76 creates a new state-law prohibition against knowingly or intentionally recruiting, hiring, or continuing to employ unauthorized workers in Indiana. The law authorizes the Indiana Attorney General to investigate alleged violations and pursue enforcement actions against employers. Potential state penalties, in addition to any penalties available under federal law, include:

• Civil penalties 
• Suspension of business operating authority, 
• Permanent revocation of operating authority in Indiana for repeat or willful violations

To initiate an enforcement action, SEA 76 requires that the Indiana Attorney General establish probable cause that a violation has occurred. If probable cause is established, the statute creates a graduated enforcement framework with escalating consequences for repeated violations.

• First violation: The Indiana Attorney General must provide written notice and allow the employer 15 days to either demonstrate reasonable diligence or submit an affidavit confirming the termination of unauthorized workers and the engagement in reasonable diligence to confirm the work eligibility of all other employees. The court may order a suspension of operations at the affected location for up to five business days.
• One or more violations by an employer never previously found in violation: The court may suspend operations at the location(s) where the violation occurred for up to ten business days.
• Violations following a prior finding of liability: The court may suspend operations at the affected location(s) for up to 180 days.
• Violations following a prior 180-day suspension: The court may permanently revoke all operating authorizations associated with the location(s) where violations occurred.
• Willful or egregious violations: Where an employer willfully violates the statute, has committed violations at three or more locations, or has previously been subject to the law’s most severe penalties, the court may permanently revoke all operating authorizations in Indiana, including licenses, permits, registrations, and similar approvals necessary to conduct business.

In addition to operational suspensions, courts may place employers on probation following a violation. Depending on the circumstances, probation may last from six months to two years and may require the employer to submit quarterly reports to the Indiana Attorney General regarding hiring practices, employment eligibility verification procedures, and work authorization documentation.

SEA 76 also contains anti-retaliation provisions. Employers may not discharge, discipline, or otherwise discriminate against an employee because the employee cooperates with, communicates with, or provides information to the Indiana Attorney General in connection with an investigation or proceeding under the statute. Violations of these anti-retaliation provisions are subject to the same escalating penalty framework applicable to other violations under SEA 76.

Employer Protections Provided by SEA 76

While SEA 76 imposes substantial penalties, it also provides employers with meaningful protections. Most notably, employers may avoid liability if they can demonstrate that they exercised reasonable diligence in verifying an individual's authorization to work in the United States.

Employers may establish reasonable diligence by:

• Utilizing the Department of Homeland Security's E-Verify program; or
• Verifying employment eligibility through procedures consistent with recognized industry standards and best practices.

Although SEA 76 generally does not require private employers to participate in E-Verify, the statute strongly encourages its use by providing employers with a recognized means of demonstrating good-faith compliance and establishing a reasonable diligence defense in the event of an investigation. Likewise, employers that maintain robust employment eligibility verification procedures, including consistent I-9 practices, timely reverification, internal audits, and accurate recordkeeping, will be better positioned to demonstrate compliance and mitigate potential liability under the statute.

Implications for Governmental Bodies and Public Entities

SEA 76 has significant implications for Indiana governmental bodies and public postsecondary institutions. The statute prohibits governmental bodies and public postsecondary institutions from adopting or enforcing “sanctuary” policies that restrict cooperation with federal immigration authorities. The law requires cities and towns, public universities and colleges, state agencies and other political subdivisions of the state to cooperate with federal immigration enforcement efforts and generally prohibits policies that would limit the sharing of information or assistance related to immigration enforcement. Significantly, SEA 76 specifically addresses law enforcement agencies and detention facilities by requiring compliance with certain federal immigration detainer requests involving individuals in custody. This is a major change for sheriffs, county jails, and other correctional facilities.

If a government entity violates the statute, the Indiana Attorney General may seek injunctive relief, impose fines up to $10,000, or pursue other appropriate remedies, without needing to prove the entity acted knowingly or intentionally.

Key Takeaways for Employers

SEA 76 does not change an employer’s underlying federal employment eligibility verification obligations. However, it significantly expands the consequences of noncompliance by creating a parallel state enforcement regime with substantial penalties and operational risks. To remain in compliance, Indiana employers should consider:

• Reviewing onboarding practices.
• Conducting internal I-9 audits.
• Evaluating E-Verify participation.
• Ensuring that personnel responsible for hiring and employment verification are appropriately trained and following documented compliance procedures.

Ice Miller will continue to monitor developments related to SEA 76 and provide updates as implementation and enforcement guidance becomes available. If you have questions regarding SEA 76 or would like assistance evaluating your organization’s immigration compliance practices, please contact a member of Ice Miller’s Immigration or Government Affairs & Regulatory Law groups.    

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.