SBA Finds Fault with DHS No-Match Rule

Kent Hoover of Bizjournals writes:

Business groups have an ally inside the federal government in their challenge to a regulation that outlines what an employer should do when they are notified that an employee’s Social Security number doesn’t match government records.

Tom Sullivan, the Small Business Administration’s chief counsel for advocacy, agrees the Department of Homeland Security violated the Regulatory Flexibility Act by failing to analyze the “no-match” rule’s impact on small businesses.

Under the rule, employers must fire a worker within 90 days of receiving a no-match letter if they or the employee can’t resolve the Social Security number discrepancy. Otherwise, they could be prosecuted for knowingly employing an illegal alien.

The rule was scheduled to go into effect Sept. 14. The Social Security Administration and DHS planned to send letters to 140,000 businesses that employ 8 million workers with Social Security numbers that don’t match government records. A federal judge, however, delayed the regulation pending an Oct. 1 hearing on a lawsuit filed by the AFL-CIO, which contends the rule could lead to workers unfairly losing their jobs.

The U.S. Chamber of Commerce and other business groups joined this lawsuit, contending the rule should be postponed until DHS analyzes the rule’s impact on small businesses and consider other, less burdensome alternatives. DHS contended this analysis isn’t necessary because the rule wouldn’t have a significant economic impact on a large number of small businesses.

Business groups, however, contend the rule would cost small businesses at least $100 million a year because they would have to spend a lot of time checking their records and contacting the Social Security Administration. Plus, they would lose valuable employees, not because they are illegal workers, but because of clerical errors or name changes, the lawsuit contends.

The lawsuit also contends DHS exceeded its statutory authority and arbitrarily presumed a mismatched Social Security number indicates a worker isn’t authorized to work.

DHS spokeswoman Laura Keehner said business groups “are making the situation worse for the constituency they believe they are protecting” by fighting the no-match regulation.

“The vast majority of employers want to do the right thing,” she said. “They know that compliance with the law is ultimately better for their bottom line. The no-match regulation will make it easier for employers to do just that.”  Click here for full story.

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