Immigration rule 'no match' for business groups

3 Oct, 2007, 0057 hrs IST, AGENCIES The Economic Times 3 October 2007

Business groups are hoping that a US court will block an immigration rule that could affect millions of employers and workers, arguing that the government didn’t consider the new regulation’s impact on small business.

In an unusual alliance, business associations joined labour unions in suing the Department of Homeland Security over a plan that could lead companies to fire workers whose Social Security numbers don’t match up with their names in a federal data base.

“Agencies must do their homework, and DHS did not,” by paying “lip service” to the required review, said Karen Harned, executive director of National Federation of Independent Business Legal Foundation, an arm of the 6,00,000-member Washington-based small-business trade group. The case is being watched because of its impact on the economy and on a stalled federal policy aimed at preventing illegal immigration, as well as because of the strange coalition opposing it.

The AFL-CIO and civil liberties groups filed the suit in San Francisco on August 29, alleging that the regulation “would commandeer the Social Security tax system for immigration-enforcement purposes.” The department was ready to mail thousands of alerts to employers about ‘no match’ documentation problems with workers.

Forced Firings

Business groups quickly joined the case. They contend the rule, which is focused on identifying some 12 million undocumented immigrants, would result in forced firings as well as more than $100 million in new costs and liability for owners. The San Francisco Chamber of Commerce and small-business trade groups representing roofers, landscapers, restaurants, franchisees and fresh produce growers claimed the agency ignored the rule’s financial impact on them.

Since 1980, federal agencies have been required to analyse how new rules would affect small business and consider alternatives.

The Bush administration countered that the rule doesn’t impose new obligations since employers already have to verify workers’ eligibility to keep them on the job. The government has used employers’ responses before enforcement proceedings, the department said in its court filings.

More than 80 lawsuits have claimed inadequate or missing small-business reviews since 1996. About half the time, agencies were ordered to conduct reviews while the rule was allowed to go into effect, according to David Frulla, an attorney with Kelley Drye Collier Shannon in Washington.

Frulla, who has argued a dozen review actions against agencies, said judges in at least four cases completely blocked rules because of the small-business review — the outcome employer groups are seeking.

Homeland Security said in a court filing that a small-business analysis was unnecessary because the rule had no effect on such enterprises and clarified for all employers the meaning of so-called ‘no match’ letters.

The administration cited letters from Tyson Foods, the Springdale, Arkansas-based meat processor, Alston & Bird, an Atlanta-based law firm, and WE Welch & Associates, a mechanical contractor in Ijamsville, Maryland, asking about “appropriate employers’ conduct” after receipt of a no-match letter.

Additional Cost

“The secretary properly concluded that there was no need to conduct a Regulatory Flexibility Analysis because the regulation does not change the existing obligations of employers — small or large,” when an employee’s legal status is called into question, the government court documents said. Business groups said it would cost them at least $100 million to resolve employment verification discrepancies that the government is expected to flag in its first mailing of 1,40,000 letters to employers covering 8.7 million employees.

“The idea this imposes no additional cost is absurd on its face judging by employers’ concern about the regulation and the lawyers they are hiring,” said Randel Johnson, vice-president of labour, immigration and employee benefits at the Washington-based US Chamber of Commerce, the nation’s largest business lobby.

Finding discrepancies in Social Security numbers is a long-standing problem. The Social Security Administration has been sending ‘no-match’ letters since 1994 to alert employees and companies about mismatched documents that could be a result of misspellings, marriage, an honest mistake, or abuse of a Social Security number.

Mark Lassiter, a spokesman for Social Security, said the agency currently has 264 million ‘no match’ files and the annual growth rate is increasing. Before the Homeland Security Department issued the rule, some employers regarded the notification as ‘purely advisory,’ according to the business groups’ court filing. Social Security made it clear letters didn’t address workers’ immigration status.

http://economictimes.indiatimes.com/International__Business/Immigration_rule_no_match_for_business_groups/articleshow/2423233.cms

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