04/25/2008
Proposes giving businesses more time to comply with the rule before forcing employers to fire a worker prematurely
CONTACT: Melissa Sharp, 202-314-2068
Washington, D.C.--The National Federation of Independent Business Small Business Legal Center, the nation's leading small business advocate, submitted comments to the Department of Homeland Security on the agency's Supplemental Proposed Rule on Safe-Harbor Procedures for Employers Who Receive a No-Match Letter, more commonly known as DHS' "no-match" rule.
Under current law, "no-match" letters are sent from the Social Security Administration to employers indicating that a social security number provided for an employee does not match the SSA's records. However, no immediate action is required of employers upon receipt of a "no-match" letter at this time.
In August of 2007, DHS proposed a "no-match" rule, which requires employers who receive a "no-match" letter 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. This rule was proposed despite the fact that DHS failed to conduct a small business economic impact assessment of the rule as required by the Regulatory Flexibility Act.
Business and labor organizations quickly challenged the legality of this rule, and the Federal District Court for Northern California suspended enforcement of the rule until the court resolved this case. NFIB's Small Business Legal Center filed a friend-of-the court brief during these initial procedures urging the court to invalidate DHS' "no-match" rule due to the agency's failure to conduct a small business economic impact assessment of the rule.
In response to this injunction, DHS requested public comments be submitted on the "no-match" rule.
NFIB believes that due to the numerous mismatched records in SSA's records that the costs associated with enforcing DHS' "no-match" rule will be significant. In a labor force of roughly 132 million, SSA now maintains 17.8 million mismatched records that could result in a "no-match" letter to employers. Of these, 12.7 million, or more than 70 percent, belong to U.S.-born citizens.
"The unfortunate fact is that the 'no-match' rule will likely result in the firing of many legal employees and will cost employers and employees enormous amounts of time, frustration and panic as the try to rectify discrepancies with the Social Security Administration in just 93 days," said Karen Harned, executive director, NFIB Small Business Legal Center. "This is especially true for small employers that do not have HR personnel on staff to help an employee work with the Social Security Administration to resolve a mismatched record. In these companies, all employment decisions are made by the principles of the firm, who must take time off from managerial duties in order to search for, interview, hire, and train new employees, to say nothing of the cost in time and money of processing the associated paperwork. In many industries, this can take weeks, if not months."
To help make this rule less burdensome to small employers, NFIB recommends that under certain circumstances, businesses should be given an optional extension period beyond the 93 days that the rule provides. Businesses should be offered this extension if they can demonstrate, by showing correspondence or signing an affidavit, that they have contacted SSA and are awaiting further action from that agency; that they are in the process of obtaining necessary documents from foreign governments or other U.S. government agencies; that their employee is temporarily unavailable to aid in the resolution of the mismatch; or any other reasonable limitation on an employer's ability to resolve the issue within the 93 days.
"Adopting these provisions will drastically reduce the number of authorized employees who would otherwise be terminated due to erroneous Social Security Administration records," said Harned. "Using the Social Security Administration's flawed record system as a backhanded way to enforce immigration laws is bad public policy. However, if the Department of Homeland Security goes forward with this rule, we strongly hope the agency will give employers that act in good faith and try to resolve discrepancies in the system more time to comply with the rule."
To learn more about the NFIB Small Business Legal Center please visit www.NFIB.com/legal.
¹U.S. DEP’T OF LABOR, BUREAU OF LABOR STATISTICS, MAY 2006 NATIONAL OCCUPATIONAL EMPLOYMENT AND WAGE ESTIMATES, UNITED STATES, available at http://www.bls.gov/oes/current/oes_nat.htm#b00-0000.
²OFFICE OF THE INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION, CONGRESSIONAL RESPONSE REPORT: ACCURACY OF THE SOCIAL SECURITY ADMINISTRATION’S NUMIDENT FILE, NO. A-08-06-26100, at 6 (December 2006), available at http://www.ssa.gov/oig/ADOBEPDF/A-08-06-26100.pdf.
³Id. at 14.
