Under the Immigration Reform and Control Act of 1986 (IRCA), limiting employment to U.S. citizens or lawful permanent residents (green card holders) can be a violation of law. Under IRCA, the protected class of individuals who generally may not be discriminated against in hiring, termination, and recruiting, or referring for a fee consists of U.S. citizens, lawful permanent residents, "temporary residents" (a term of art that applies to almost no one anymore), and refugees and asylees. The U.S. Department of Justice Best Practices page offers the following guidance:

"Do avoid the following language in job postings:
 

• 'Only U.S. Citizens'
• 'Citizenship requirement'*
• 'Only U.S. Citizens or Green Card Holders'
• 'H-1Bs Only'
• 'Must have a U.S. Passport'
• 'Must have a green card'

* UNLESS U.S. citizenship is required by law, regulation, executive order, or government contract."
While the "unless" language above may be a basis for restricting employment to U.S. citizens or lawful permanent residents, you must determine whether the restriction is required "by law, regulation, executive order, or government contract." For example, an employer may impose this limitation if the employment must be compliant with the International Traffic in Arms Regulations (ITAR)--regulations that control the export and import of defense-related articles and services on the U.S. Munitions List.