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DAVID GREENE, Host:

What's rocking Alabama is a fight over immigration policy. The dispute is playing out in a federal court there today. The state's Republican leaders say they passed the toughest immigration bill in the country to preserve jobs for long-time residents of Alabama. Critics say the law goes too far, criminalizing all kinds of contact with undocumented residents and putting an extra burden on small businesses.

NPR's Debbie Elliott reports.

DEBBIE ELLIOTT, Host:

A Birmingham federal judge is hearing arguments today from a host of litigants - the U.S. Justice Department, civil rights groups, even some churches, who are trying to block Alabama's immigration crackdown from going into effect on September 1. The uncertainty surrounding the new law has the state's businesses scrambling to prepare.

TED HOSP: Can everybody hear me with this mic? Does this work for the back?

ELLIOTT: Business owners filled the Montgomery auditorium last week to hear what could soon be required of them. Attorney Ted Hosp warned them to be ready, no matter what the court does.

HOSP: Employers should not expect those lawsuits to block the provisions that are most relevant to you.

ELLIOTT: That means knowing how to fill-out an I-9 form and being able to check all new hires through the federal government's E-verify system. Even if you hire your mother, one lawyer advised, E-verify.

JAY REED: Unfortunately, it is an HR nightmare.

ELLIOTT: Jay Reed is president of Associated Builders and Contractors of Alabama, and co-chairs a coalition of business groups putting on these compliance workshops. Reed says if his members aren't up on the complicated new requirements, it could cost them thousands of dollars in fines.

REED: It is the most comprehensive and strict piece of legislation that has been passed on immigration anywhere in the U.S., and it's right here in Alabama.

ELLIOTT: Coming out of the session, Glen Leuenberger of Auburn says he's afraid the immigration law will end up driving up costs. He works in the timber industry.

GLEN LEUENBERGER: I think in a down economy, this is just really bad timing, because the last thing we need to do is put more burden on businesses.

ELLIOTT: But Republican State Senator Bryan Taylor says it's not an added burden, simply state enforcement of what's already on the books.

BRYAN TAYLOR: Alabama didn't create the law making it illegal to hire undocumented workers. That's federal law. Alabama law just now requires a certain method of compliance.

ELLIOTT: The immigration bill was part of a Republican legislative agenda called the Handshake with Alabama, and Taylor says it is aimed at protecting jobs for Alabamians.

TAYLOR: Maybe not at the depressed, low wages that illegal immigrants have been willing to do them. And that's kind of the point. So there may be an adjustment period where we begin to have to reevaluate how much we pay for certain jobs.

ELLIOTT: Even before the law goes into effect, that wage pressure is being felt at A and P Farms in Gallant, Alabama.

ANDY KEMP: It's a mess right now. It goes to pot when you don't have any help.

(SOUNDBITE OF CRUNCHING SOUND)

ELLIOTT: Andy Kemp and his wife Paula farm about 15 acres, growing fresh fruits and vegetables they sell at seven farmers markets in the Birmingham area. Now weeds are overtaking their sweet potato crop, and tomato vines are falling to the ground. In July, their two part-time farm workers, who were legal immigrants, left for higher wages at a larger tomato farm.

KEMP: It just put us out of business overnight. Thursday we were farming. Friday we were out of farming - you know, that quick.

ELLIOTT: They've since let go of five other employees. Paula Kemp says no matter what happens with the law, she doesn't see how they can get back in business.

PAULA KEMP: The workers are gone and they may come back, they may not come back, but we can't plan for 2012 in January starting to start seeds and that type of thing with the hope that we can get farm help.

ELLIOTT: She says for a small farm like theirs, paying higher wages is not an option. And at middle age, she says, they can't do the work alone.

Debbie Elliott, NPR News, Birmingham.

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