Critics: Revised ‘No Match’ Worker Rule Still Flawed

Critics: Revised 'no-match' worker rule still flawed

Kent Hoover
Washington Bureau Chief
Birmingham Business Journal
March 31, 2008

The Department of Homeland Security revised its regulations outlining what employers should do if they are notified that employee Social Security numbers don't match government records.

The rule, which was suspended by a federal court ruling in October, would give employers 90 days to resolve a discrepancy in these Social Security numbers. If they can't do so, they either would have to fire the employee or face possible prosecution for knowingly hiring an illegal immigrant.

The changes in the regulation are aimed at satisfying the court's objections to the department's original rule.

Critics of the rule, however, contend all DHS did was to try to rationalize a rule that is fatally flawed due to its reliance on a Social Security database that is full of errors.

The court ruled DHS failed to supply a reasoned analysis justifying what it viewed as a change in the department's position on no-match letters. It also questioned whether DHS had the legal authority to interpret anti-discrimination provisions and cited the department's failure to analyze the impact the rule would have on small businesses.

The department, which is appealing the court's preliminary injunction, said the rule is needed because employment is a magnet for illegal immigration and Social Security number mismatches are an indicator of possible illegal employment. Many employers now are uncertain about what their obligations are when they receive a no-match letter from the Social Security Administration. Additional guidance, the revised rule states, “will help law-abiding employers comply with the immigration laws.”

The Social Security Administration sends letters to employers with 11 or more employees whose numbers don't match its records, and where the no-matches represent more than 0.5 percent of the total W-2s submitted by an employer.

“Employers with stray mistakes or de minimis inaccuracies in their records do not receive employer no-match letters,” DHS states.

In response to the court's concerns that DHS overstepped its authority, the revised rule removes language stating that an employer who follows the rule's safe harbor provisions won't be found to have engaged in unlawful discrimination. Instead, it directs employers to the Department of Justice's web site for guidance on this issue.

The revised rule also analyzes the impact it would have on small businesses. DHS wasn't able to determine how many small businesses would be impacted by the rule, but it provided estimates on what it would cost to comply with the rule, based on number of employees and the percentage who are unauthorized to work. An employer with 10 to 19 employees, for example, would face compliance costs ranging from $3,119 to $4,020, according to DHS. These costs don't include the cost of firing a worker and hiring a new one.

Groups that challenged the department's original rule contend the revised regulation is merely a repackaging of the old one. Fraudulent use of a Social Security number is only one of many reasons for mismatches with the government's database, they note. Other possibilities include spelling errors, incomplete names, name changes due to divorce or marriage and cultural differences in name order.

“This is a desperate attempt to justify a fundamentally flawed database without actually fixing any problems,” said Lucas Guttentag, director of the American Civil Liberties Union's Immigrants' Rights Project and one of the attorneys in the lawsuit challenging the no-match rule.

He called it “a de facto Bush administration tax increase on small businesses.”

“This unchanged regulation clearly leaves employers holding the bag as to Congress' failure to create legal avenues to fill legitimate labor needs,” said Kathleen Campbell Walker, president of the American Immigration Lawyers Association. “Employers will be left with a Hobson's choice — keep the employee while potentially being exposed to employment verification penalties or terminate the employee and face possible wrongful termination or discrimination charges.”

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