While employers are navigating through this murky and still developing area of immigration compliance, they must also be careful to avoid charges of immigration related discrimination. The employer can sometimes feel like it is walking a fine line between these two requirements.
Under title VII of the Civil Rights Act of 1964 employers are prohibited from engaging in what is called national origin discrimination, which prohibits discrimination on the basis of place of birth, accent, appearance, and sometimes even language. Anytime you treat someone different because they look foreign you have probably engaged in national origin discrimination. Title VII applies to employers with more than 15 employees. National origin discrimination is also prohibited by IRCA, which applies to 3 or more employees.
In addition, IRCA also identifies another type of prohibited immigration related discrimination known as immigration status discrimination, or citizenship status discrimination. Specifically, employers are prohibited from discriminating based on citizenship status, against certain permanent residents, temporary residents, asylees, and refugees. (Note: with respect to permanent residents this added protection is only available if they apply for naturalization within six months of eligibility.) These four groups are considered protected aliens under IRCA. One of the reasons these groups are singled out for special protection is that they have automatic work authorization incident to their status without the need to petition the immigration service for special work permission. Although it may be technically permissible to have a company policy to hire foreigners only if they are in one of the four protected classes, it would be a highly risky policy since the company would come under intense scrutiny for possible national origin discrimination.
As usual in the law there are certain exceptions to the general rule. For example, it is possible to have a citizens only hiring policy when necessary to comply with the law. This is a very rare situation but does exist with certain highly sensitive defense projects, for example. It is also technically permissible to prefer a US citizen over an equally-qualified protected alien. This would be another highly risky policy for the employer since in each case the employer would have to show that the US citizen was at least as qualified as the alien, and these are subjective judgments on which two people could easily differ. Also, the EEOC has indicated that even if on a case by case basis such a policy might not violate IRCA, it might still violate Title VII's prohibition against national origin discrimination.
The safest and simplest policy is to treat everyone equally, and to just focus requiring that new hires satisfy the minimum I-9 requirements. This will also allow the company access to the largest pool of talent.