Alien Adjustment and Employment Act

Alien Adjustment Act - Amends the Immigration and Nationality Act to authorize the Attorney General to create a record of lawful admission for permanent residence in the case of an alien who entered the United States prior to January 1, 1970 (updated from June 30, 1948 by this Act) provided that such alien is not inadmissible because of past criminal or otherwise proscribed behavior. Prohibits the creation of such a record for an alien who assisted in the prosecution of any person on account of race, religion, nationality, political opinion, or membership in a particular social group.

Authorizes the Attorney General to permit any alien who entered the United States on or before January 1, 1977 to reside in the United States for a period of up to five years if specified criteria are met and such person is not otherwise inadmissible under provisions of the Act excluding criminals, and other immoral persons. Prohibits temporary resident aliens admitted under this Act from receiving Medicaid, Aid to Families with Dependent Children, Supplemental Security Income, or Food Stamps.

Prohibits any person from employing or assisting illegal aliens in procuring or retaining employment in the United States. Sets penalties for violating such prohibition.