U.S. District Court Judge Neil Wake has set Nov. 14 for a hearing on the state’s new employer sanctions law, which is due to take effect Jan. 1.

The law, believed to be the nation’s toughest on hiring illegal immigrants, requires businesses to verify legal eligibility status of new employees through a federal database called E-Verify. Those found to have knowingly hired illegal immigrants could have their business license suspended for 10 days and then taken away entirely the second time.

Various business organizations have filed suit – Arizona Contractors Association et al. v. Napolitano – to try to stop the law from taking effect saying the state is trying to supersede its authority in what is federal jurisdiction and has other defects.

Although Gov. Janet Napolitano acknowledges the law has problems she thinks it will stand up. Business groups have been buoyed by recent federal court rulings. Last month, a district court judge in San Francisco sided with business interests and labor unions to temporarily stop a Bush administration effort to force employers to use the E-Verify system.