Indiana's FAIRNESS Act: What Employers Need to Know
Indiana's new law on employing unauthorized workers, which state officials call the FAIRNESS Act, took effect July 1, 2026. Senate Enrolled Act 76 makes it unlawful for an employer to knowingly or intentionally recruit, hire, or continue to employ an unauthorized alien in Indiana. It does not require private employers to use E-Verify, but using the federal E-Verify program or following industry-standard practices can help an employer show reasonable diligence. The penalties are not fines. Instead, the law allows the suspension or revocation of the permits, licenses, and other authorizations a business needs to operate in Indiana.
Key points
The law applies to employers of any size that employ workers in Indiana.
It applies only to conduct on or after July 1, 2026.
Private employers are not required to use E-Verify, but E-Verify can support a reasonable-diligence defense.
The Indiana Attorney General enforces the law and must give a first-time employer a chance to respond before filing suit.
A court may suspend a business's operating authorizations at the location involved, starting at up to 5 business days, and may revoke them for repeat violations.
What is Indiana's FAIRNESS Act?
Senate Enrolled Act 76 (P.L. 106-2026) is a broad immigration bill. Among other changes, it added a new chapter to the Indiana Code, IC 22-5-9, that applies to employers. State officials, including the Governor and the Attorney General, have referred to the law as the FAIRNESS Act. The employer chapter focuses on employers who knowingly or intentionally recruit, hire, or continue to employ an unauthorized alien.
An "unauthorized alien" has the same meaning as in federal immigration law: a person who is not lawfully admitted for permanent residence and is not authorized to work in the United States.
Which employers are covered?
The law defines "employer" as a person, including an agent, that employs employees in Indiana. There is no minimum number of employees. The definition of "employ" includes to "suffer or permit" a person to work, so the law can reach work arrangements that are not labeled as traditional employment.
Does the law require E-Verify?
No. SEA 76 does not require private employers to use E-Verify. Instead, it creates a reasonable-diligence defense. An employer may show it used reasonable diligence by:
Verifying a worker's eligibility through the federal electronic work authorization program operated by the Department of Homeland Security, known as E-Verify, unless the circumstances would have put a reasonable person on notice that the verification was unreliable; or
Following industry-standard best practices for confirming a worker's eligibility.
Separate Indiana laws that already require E-Verify for certain public contractors are unchanged. Federal Form I-9 requirements also still apply to every employer.
How is the law enforced?
The Indiana Attorney General may file a lawsuit against an employer if the Attorney General determines there is probable cause that the employer violated the law within the preceding 3 years. The court decides whether a violation occurred by a preponderance of the evidence.
Before filing suit against an employer that has not been found in violation before, the Attorney General must give notice. The employer then has 15 business days to show it used reasonable diligence or to file an affidavit stating that it:
has terminated the employment of all unauthorized aliens;
has used reasonable diligence to verify the eligibility of all its employees; and
will not knowingly employ an unauthorized alien in the future.
What are the penalties?
The employer chapter does not impose dollar fines on private employers. Instead, a court may suspend or revoke the employer's operating authorizations, such as licenses, permits, registrations, charters, and articles of incorporation. The penalties a court may impose depend on the employer's history:
A single violation by an employer never found in violation before: suspension for up to 5 business days at the location involved.
More than one violation by an employer never found in violation before: suspension for 10 business days at the location or locations involved.
Any violation by an employer previously found in violation: suspension for 180 days.
A violation after a 180-day suspension: permanent revocation at the location or locations involved.
Willful violations at 3 or more locations after a permanent revocation: revocation of all of the employer's Indiana operating authorizations.
A court may also place an employer on probation for 6 months to 2 years, with quarterly reports to the Attorney General.
Protections for workers and employers
The law prohibits an employer from retaliating against a person who cooperates with the Attorney General. It also states that the law must be enforced without regard to race, color, or national origin.
Employers should keep in mind that federal law prohibits discrimination based on national origin or citizenship status in hiring and verification. Asking for more or different documents than federal law requires, or treating workers differently because of how they look or speak, can create separate legal problems.
Steps Indiana employers can take now
Review your hiring and onboarding process, including how Form I-9 is completed and stored.
Decide whether to use E-Verify as part of a reasonable-diligence practice.
Apply the same verification steps to every new hire to avoid discrimination concerns.
Train the managers who hire, including on how to respond to documents that appear questionable.
Know who will respond if the Attorney General sends a notice, since a first-time employer has 15 business days to respond.
Review staffing and subcontractor arrangements with counsel, given the law's broad definition of "employ."
Frequently asked questions
When did Indiana's FAIRNESS Act take effect?
July 1, 2026. It applies only to conduct on or after that date.
Does the law apply to small businesses?
Yes. It covers any employer that employs workers in Indiana, regardless of size.
Can an employer be fined under SEA 76?
The employer chapter does not set dollar fines for private employers. The penalties are suspension or revocation of operating authorizations, and probation.
Is E-Verify mandatory for Indiana employers now?
Not for private employers under this law. E-Verify can support a reasonable-diligence defense, and certain public contractors were already required to use it under other Indiana laws.
Questions about your hiring practices?
If you have questions about how this law affects your Indiana business, you can schedule a consultation with Brinkley Law or learn more about our business law practice.
Brinkley Law, 8888 Keystone Crossing, Suite 1300, Indianapolis, Indiana 46240.
This article provides general information about Indiana law and is not legal advice. Reading it or contacting Brinkley Law does not create an attorney-client relationship. The application of the law depends on the facts of each matter.
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