The City of New York says it may fine individuals up to $US250,000 ($NZ400,000) if they use the term "illegal alien" in a derogatory way.
"BREAKING: New York City has made it illegal to threaten to call ICE based on a discriminatory motive or to tell someone 'go back to your country'. Hate has no place here," the New York City Commission on Human Rights tweeted last week.
New York City Mayor Bill de Blasio, who pulled out of the Democratic presidential race earlier this month, tweeted, "If you want to come into the ultimate city of immigrants and try to spread hate, you WILL face the consequences."
In the media release, the commission said it was releasing "new legal enforcement guidance that defines discrimination on the basis of perceived or actual immigration status and natural origin under the New York City Human Rights Law" in the workplace, housing and public spaces such as stores, hospitals and movie theatres.
The guidance states that it is illegal for a person's employer, co-workers or housing provider to use the term "illegal alien" where its use is "intended to demean, humiliate or offend another person", news.com.au reported.
It also states that it is illegal for employers or landlords to "threaten to call Immigration and Customs Enforcement to harass, scare, or intimidate workers because of their immigration status".
Many slammed the law as violating the right to free speech protected by the First Amendment to the US Constitution, while pointing out "illegal alien" is the language contained in immigration law and used by the US Supreme Court.
"'Illegal alien' remains the most technically, legal, and historically precise term to describe a non-citizen in the country without permission/documentation, but sure let's go ahead and make its use verboten. What could possibly go wrong?" Daily Wire editor Josh Hammer wrote on Twitter.
Immigration lawyer Matthew Kolken said, "I've dedicated my career fighting to prevent the deportation of immigrants, and this scares me. The unconstitutional criminalisation and restriction of unpopular speech is something that should scare us all."
In the US, there has been a long-running and politically charged debate over how to refer to its roughly 11 million illegal residents, mostly from Mexico and other Central and South American countries.
In 2013, the Associated Press announced it would no longer use the term "illegal immigrant" or "illegal" to describe a person, changing its stylebook to tell users that "illegal should describe only an action, such as living in or immigrating to a country illegally".
Many news outlets and public officials now use the euphemism "undocumented migrant", while others simply use the term "migrant" — no longer drawing a distinction between legal and illegal immigration.