DHS Issues Supplemental ‘No-Match’ Rule, Pushes Enforcement

While companies cope with financial market gyrations and a slowing economy, they have to keep an eye on immigration law.

In the latest move, the Department of Homeland Security took what it hopes is a decisive step toward forcing companies to act when employee names and Social Security numbers on tax forms don’t match information in the Social Security database.

On Thursday, October 23, Homeland Security Secretary Michael Chertoff announced a final supplemental rule that he said would answer most of the questions posed by a federal judge in Northern California who put an injunction on the original regulation. Chertoff is confident it will go into effect.

Under the regulation, companies would have to clear up “no-match” discrepancies within 93 days or fire employees in question. A no-match letter could serve as evidence that a company violated immigration law.

The judge issued a preliminary injunction because of objections raised in a suit by the U.S. Chamber of Commerce and several unions. They might try to block the supplemental rule too.

The regulation, which was first proposed in June 2006, gives companies a road map—and protection—for responding to a no-match letter, according to Chertoff. About 4 percent of approximately 250 million wage reports annually don’t correspond to the Social Security database.

“An employer cannot put his or her head in the sand,” Chertoff told reporters. “This is an anti-ostrich regulation.”

Elena Park, head of the immigration practice at Cozen O’Connor in Philadelphia, calls equating Social Security numbers with immigration status misguided because the database is rife with errors.

“The correlation is very weak,” Park said. “The [safe harbor] benefit does not outweigh the cost.”

Another employment lawyer said that companies will not be burdened.

“Employers fundamentally want to obey the law and be good citizens,” said Eric Bord, a partner at Morgan Lewis & Bockius in Washington.

But Bord does not support another tool that Chertoff praises—E-Verify, an electronic employee verification system that checks I-9 information against Social Security and DHS databases. A regulation that would make E-Verify mandatory for federal contractors is nearing completion.

So far, about 90,000 employers have voluntarily signed up. The Society for Human Resource Management and other business groups criticize E-Verify as inaccurate, inefficient and incapable of handling all U.S. employers.

The system was set to expire in November. Congress approved funding until early March. It could be interpreted as financing for one year, Chertoff said.

Although there is much opposition to E-Verify in Congress, it will probably be extended further next year, according to Bord.

“Neither Congress nor the new White House will want to bite off the whole immigration reform/immigration enforcement debate in its first two months,” Bord said.

DHS is trying to build support for comprehensive immigration reform by enforcing existing laws to reduce illegal immigration, according to Chertoff. In fiscal year 2008, the agency made a record 5,173 administrative and 1,101 criminal arrests in work-site raids.

“We have upheld our end of the bargain,” Chertoff said. “We have enforced the law and we have seen positive results.”