09/19/2007
Secretary Chertoff's assessment that rules will not significantly impact small firms is dead wrong
CONTACT: Melissa Sharp, 202-314-2068
Washington, D.C.--The National Federation of Independent Business Legal Foundation is filing a brief urging the federal district court in northern California to require the Department of Homeland Security to comply with the Regulatory Flexibility Act and conduct a regulatory flexibility analysis on their new "no-match" regulations. These rules require employers that receive a "no-match" letter from the Social Security Administration to fire the employee, or risk civil or criminal penalties, unless the discrepancy can be resolved between the SSA and the employee within 93 days.
Despite the unmistakable administrative costs imposed by these regulations on virtually all businesses, Department of Homeland Security Secretary Michael Chertoff certified these regulations without first conducting a regulatory flexibility analysis to determine the rules' economic impact on small entities as required by the Regulatory Flexibility Act. Chertoff refused to conduct a regulatory flexibility analysis by claiming that these regulations would not significantly impact a substantial number of small firms.
"Finalizing these rules without conducting a regulatory flexibility analysis clearly violates the Regulatory Flexibility Act," said Karen Harned, executive director of NFIB's Legal Foundation. "The Secretary's claim that these rules will not substantially impact small firms is not realistic. Complying with these rules will burden small employers who are already inundated with erroneous amounts of paperwork and other workplace regulations. These rules have real administrative costs that could keep small-business owners from focusing on running their businesses."
DHS and SSA were scheduled to begin sending out these "no-match" letters to approximately 140,000 employers on September 4, but due to ongoing litigation over these rules the federal district court in northern California issued a temporary restraining order halting the issuance of the "no-match" letters.
"The RFA requires regulators to seriously consider the consequences and economic costs of new rules on small firms," said Harned. "This consideration is mandated by law and must be enforced. Since DHS failed to follow the law, the regulations should not be enforced until a proper regulatory flexibility analysis is conducted."
NFIB's Legal Foundation has taken the lead in making sure regulators comply with the RFA. NFIB and NFIB's Legal Foundation have submitted comments to agencies on over 20 rules regarding the RFA. As the voice of small business in our nation's courts, NFIB's Legal Foundation is uniquely positioned to inform the court on why a regulatory flexibility analysis must be conducted before these rules are enforced.
