WASHINGTON The Supreme Court on Thursday upheld an Arizona law that severely penalizes businesses that knowingly hire illegal immigrants.

In a ruling that’s likely to embolden Congress and other states, the court declared that Arizona’s law fits comfortably within the state’s powers.

“Arizona hopes that its law will result in more effective enforcement of the prohibition on employing unauthorized aliens,” Chief Justice John Roberts Jr. wrote for the 5-3 majority, adding, “The Arizona regulation does not otherwise conflict with federal law.”

The highly anticipated decision keeps intact the 2007 Legal Arizona Workers Act. Under the law, employers could have their business licenses suspended or revoked for hiring illegal immigrants. The ruling will make it easier for other states to pass similar laws, even though immigration is traditionally a federal responsibility.

The decision in Chamber of Commerce v. Whiting didn’t involve a more controversial Arizona measure that requires police to check the immigration status of individuals in certain circumstances. That law remains under separate legal challenge.

The law upheld Thursday also requires Arizona employers to use a federal program called E-Verify to check the immigration status of potential workers. Roberts called this state requirement “entirely consistent” with federal law.

Nationwide, more than 215,000 employers have signed up for the optional E-Verify system. Other states now can follow Arizona’s lead to make its use mandatory; South Carolina and Mississippi already have.

In Congress, some lawmakers soon will introduce legislation to make E-Verify mandatory everywhere.

“American jobs should be preserved for American workers,” said Rep. Lamar Smith, R-Texas, the chairman of the House Judiciary Committee and the author of a pending E-Verify bill.

Thursday’s decision affirms the 9th U.S. Circuit Court of Appeals, which had upheld the state law. It’s a defeat for both the politically powerful U.S. Chamber of Commerce and the Obama administration, which had opposed the law.

“Either directly or through the uncertainty that it creates, the Arizona statute will impose additional burdens upon lawful employers,” Justice Stephen Breyer wrote in dissent.

Breyer, joined by Justices Ruth Bader Ginsburg and Sonia Sotomayor, added that fearful employers may now “erect ever stronger safeguards against the hiring of unauthorized aliens, without counterbalancing protections against unlawful discrimination.”

Justices Antonin Scalia, Anthony Kennedy, Samuel Alito and Clarence Thomas joined in most of the majority opinion.

Justice Elena Kagan didn’t participate in the case because of her prior job as the Obama administration’s solicitor general.

Arizona legislators explicitly cited their frustration with the federal gridlock over immigration when they passed the 2007 law. The frustration is widely shared in other states, where legislators introduced more than 1,500 immigration-related bills in 2009, quintuple the number introduced in 2005.

Congress prohibited the employment of illegal immigrants under the 1986 Immigration Reform and Control Act. The law specifically pre-empted states from taking civil or criminal actions against employers who hired illegal immigrants, although it left a small loophole to permit “licensing” actions.

The decision Thursday relies on this provision concerning licensing, saying that the state is simply engaging in its customary regulation of business licenses.

“Arizona’s licensing law falls well within the confines of the authority Congress chose to leave to the states,” Roberts wrote, adding that “regulating in-state businesses through licensing laws has never been considered an area of dominant federal concern.”

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