(Jan. 4) An Arizona state law imposing stiff penalties for business that knowingly hire undocumented workers went into effect with the new year, but agriculture and business interest plan to continue a legal fight to overturn it.

The Legal Arizona Workers Act sparked worries that the agricultural labor force in Arizona could shrink dramatically, and efforts to defeat it in the days leading to Jan. 1 failed.

In a decision issued Dec. 21, U.S. District Judge Neil Wake denied a motion for an injunction from the Arizona Farm Bureau, Arizona Chamber of Commerce and other business groups that would have prevented the law from taking effect.

Produce industry leaders said there is still confusion about how the law will affect their operation.

“We can’t tell what the eventual impact will be, but it can’t be good,” said Frank Pinney, owner of Salinas, Calif.-based Diamond Produce LLC, with lettuce operations in Yuma.

The law imposes penalties, including a loss of state licenses, on employers who knowingly hire undocumented workers. The law requires employers to verify employees are in the country legally. Knowing an employee is in the country illegally, or intentionally failing to check, triggers a suspension of the employer’s business license. A second offense can result in permanent revocation.

Farrell Quinlan, spokesman for Arizona Employers for Immigration Reform, said two lawsuits are still in play challenging the law. One is expected to get a hearing Jan. 16, he said.

“The judge hasn’t ruled on the merits of the law yet,” he said Jan. 3.

In the meantime, Arizona authorities have indicated they will not begin enforcement of the law until February, the group said.

The law requires all employers to use the federal E-Verify employment eligibility verification system for employees hired after Jan. 1.