DHS Rule Blocked

By Jeremy Smerd

Nov. 26, 2007

The federal government’s effort to curb illegal immigration by targeting the workplace was dealt a severe blow this month by a California judge.

   While it wasn’t a knockout punch, the Bush administration likely will be tied up in court for weeks or even months rather than implementing a Department of Homeland Security regulation forcing companies to resolve within 90 days discrepancies between a worker’s name and Social Security number or fire the employee.

   But employment lawyers caution that U.S. District Judge Charles Breyer’s preliminary injunction against the regulation doesn’t mean the government’s increased work-site enforcement efforts will slow down. The DHS also might appeal Breyer’s decision or revise the “no-match” rule to satisfy the court’s concerns.

   Under the proposed regulation, a company’s failure to act on a so-called no-match letter could be construed as a violation of immigration law. But if it follows the rule in good faith, the DHS would not use the letter in an enforcement action. Companies currently aren’t compelled to clear up inconsistencies.

   Breyer blocked the rule, however, holding that the DHS failed to articulate why a no-match letter by itself should indicate that a worker is illegal. He also said the agency did not analyze the compliance costs for business and exceeded its authority in offering protection from prosecution to companies that adhere to the no-match rule.

   Although the case was heard by the Northern District of California—a jurisdiction normally not sympathetic to the government—Breyer shot down several of the arguments against the regulation made by business and labor group plaintiffs. In addition, it is conceivable the DHS could provide sufficient answers to the court’s questions.

   “It’s the court saying to DHS: You need to explain yourself,” says Elena Park, an attorney at Cozen O’Connor in Philadelphia. “It’s definitely not over. I don’t think we can assume it will be a slam-dunk, even in California.”

   But so far, the plaintiffs have the upper hand. They argue that millions of mistakes in the Social Security database would create havoc for businesses and lead to discrimination against ethnic and minority groups.

   “There is a strong likelihood that employers may simply fire employees who are unable to resolve the discrepancy within 90 days, even if the employees are actually authorized to work,” Breyer wrote in his opinion.

   But Homeland Security Secretary Michael Chertoff indicated the government won’t back off the work-site crackdown that has been under way for more than a year.

   “We will continue to aggressively enforce our immigration laws while reviewing all legal options available to us in response to this ruling,” he said in a statement.

   Employers should heed that warning, says Angelo Paparelli of Paparelli & Partners in Irvine, California.

   “I’m fearful that employers will think [the court injunction] is a reprieve when they should be thinking of it as a time to prepare for the next wave of enforcement,” says Paparelli, president of the Academy of Business Immigration Lawyers.

   Now may be the worst moment to ignore a notice that a worker’s tax information doesn’t align with government databases.

   “Employers should implement a policy on how to address no-match letters when they receive them,” says Gregory Wald, an attorney with Squire Sanders & Dempsey in San Francisco.

   Although business, labor and the DHS may battle over the no-match rule all the way to the U.S. Supreme Court, they all want to fundamentally change immigration policy—something Congress has failed to do.

   “It does underscore the need to fix the system,” says Laura Foote Reiff, a lawyer at Greenberg Traurig in Washington. “That’s where we agree with the administration.”

Jeremy Smerd writes for Crain’s New York Business, a sister publication of Workforce Management.

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