The Department of Homeland Security's (DHS) legal struggle to use Social Security "no-match" letters as an important weapon to combat illegal immigration is on hold for now. It has devolved into a back and forth legal battle in the courts that won't be resolved until the spring of 2008 at the earliest.

However, the writing seems to be on the wall with the trend showing that the DHS will continue to pursue this avenue as a backdoor method of immigration reform.

Both labor and business groups oppose the rule, claiming that it could result in the termination of thousands of lawful employees and that the DHS did not adequately consider the impact of the rule on small business.

Homeland Security Secretary Michael Chertoff continues to assert that, "The only real beneficiaries" of the lawsuit challenging the rule "are employers who would rather close their eyes to cheap and profitable illegal labor than obey the laws of their country".

No-match Rule is temporary immigration battleground

Major immigration reform stalled in Congress this year, so the focus of the Bush administration has now shifted to pursuing the DHS "No-match" rule as a means to crack down on illegal immigrants who are working in this country.

"I believe that the No-Match Rule is a major step forward in preventing employment of illegal migrants. Contrary to the ACLU's incorrect statements, the rule is not harmful to legal workers. DHS is not abandoning it," said Homeland Security Secretary Michael Chertoff in a written statement on December 5th.

"We are pressing ahead by taking the district court's order to the 9th Circuit Court of Appeals. At the same time, we will soon issue a supplement to the rule that specifically addresses the three grounds on which the district court based its injunction," said Chertoff.

"By pursuing these two paths simultaneously, my aim is to get a resolution as quickly as possible so we can move the no-match rule forward and provide honest employers with the guidance they need."

Until comprehensive immigration reform can be addressed in a meaningful way in Congress, this no-match rule will be the primary area where the efforts of the Bush administration will be focused in the foreseeable future.

As Laura Keehner, a DHS spokeswoman said, "In the meantime, we will use every tool and authority within our power to enforce the rule of law, and we remind employers that there are serious consequences for those who choose to disregard our laws".

DHS litigation, legal battles, appeals

Restraining order, temporary injunction, appeal, and preliminary injunction - this is the language relating to the DHS "no-match rule" over the last several months.

On August 31, U.S. District Judge Maxine Chesney issued a temporary restraining order delaying the implementation of the no-match rule, which was to start on September 14. The Social Security Administration was set to release a mailing of no-match letter packets, which were to include DHS guidance on the new rule. Since August, 141,000 "no match" letters covering 8 million workers were sent to companies from the SSA.

Judge Chesney claimed that the plaintiffs had raised serious questions about whether the regulation violates the law and whether the DHS has the authority to issue it. The plaintiffs in this case were the AFL-CIO and the American Civil Liberties Union, with the U.S. Chamber of Commerce joining the lawsuit later in September.

A preliminary injunction was then issued by U.S. District Court Judge Charles Breyer on Oct. 10, 2007 which barred the DHS from enforcing the no-match rule, stating that the DHS had failed to follow proper procedures as required by the Regulatory Flexibility Act. According to the law, federal agencies must examine the economic impact that new or revised regulations could have on smaller-sized employers.

In his 4 page ruling, Judge Breyer wrote that the regulations "would result in irreparable harm to innocent workers and employers" and that the threat of potential criminal prosecution of employers that do not comply with the regulations "reflects a major change in DHS policy."

He also said that the Social Security Administration's database was full of errors; thereby putting an unreasonable burden on businesses to go through a complicated verification process and possibly having to fire workers if the resources to verify workers weren't available or the employer couldn't meet the time frame set forth by the SSA for compliance.

In November, the Social Security Administration said it would not send out "no-match" letters for the remainder of 2007 because of the lawsuit.

Then, on Dec. 4th, 2007 attorneys for the DHS followed up by filing a motion for appeal with the U.S. 9th Circuit Court of Appeals in San Francisco.

DHS officials have stated that the department initiated a Regulatory Flexibility Act analysis in November 2007 and that the analysis and rule revisions to address Breyer's concerns should be complete by March 2008.

And on Dec. 12th, 2007 a federal judge gave the DHS until March 24 to survey small business owners on how the Department of Homeland Security's "no match" illegal immigration rules affect them.

The DHS is intent on proceeding with rules, saying that the "minor issues" will be corrected by the March deadline and the verification process will move forward.

What is no-match rule, how many does it affect?

The "no match" rules are the DHS's requirement of business owners to verify workers' immigration status if the social security numbers submitted by employees on W-2 forms don't match the records in the Social Security Administration database.

Employers would receive "no-match" letters from the SSA and if they could not resolve the discrepancy between the employee's name and his or her social security number within 90 days they (the employer) could face criminal prosecution. Employees could face termination of employment.

Companies that receive these "no-match letters" currently aren't compelled to resolve those inconsistencies. If the rule is enforced, failure to act on a so-called "no-match letter" could be construed as a violation of immigration law.

The Social Security Administration estimates that 17.8 million of its records have "no-match" inconsistencies affecting 13 million Americans - out of the 250 million earnings reports submitted annually.

Here is what Homeland Security Secretary Michael Chertoff said in his statement on the No-Match Appeal on December 5, 2007;

"Employers receive a No-Match letter from the Social Security Administration when an employee's name does not match the social security number it has on file. Sometimes there is an innocent explanation for this discrepancy, such as a clerical error. But sometimes the discrepancy reflects the fact that the employee in question is an illegal alien. When employers receive such No-Match letters, they are on notice that the employees in question may not be authorized to work."

"Under our No-Match Rule, no employer should terminate an employee based upon a no-match letter alone. But no employer should ignore such a letter or the discrepancy it reveals. The No-Match Rule gives employers and employees 90 days - a full three months - to correct the discrepancy."

"If the mismatch is a clerical error, that is a good opportunity to correct the mistake. When the mismatch shows fraud, however, appropriate steps should be taken. Businesses that follow the procedures in the rule will have a safe harbor from enforcement action. Those that ignore no-match letters place themselves at obvious risk and invite suspicion that they are knowingly employing workers who are here illegally."

In practice, these no-match letters can place an employer "between a rock and a hard place".

If an employer cannot complete the verification process, they may be reluctant to fire a worker because they may fear charges of discrimination. But on the other hand an employer may face severe fines if they fail to follow the verification process within the time frame outlined by the DHS.

This places the employer in the unenviable position of either risking discrimination lawsuits or of facing civil and criminal penalties for not following all the rules put in place by the DHS.

Longer term immigration issues for employers

Even if the DHS is delayed or stopped on the no-match regulation, it will continue to be intent on cracking down on illegal employment.

Angelo Paparelli, a lawyer with Paparelli & Partners in Irvine, California, and president of the Academy of Business Immigration Lawyers has said, "Employers are not going to be free from criminal or civil investigations and prosecution. This is not a complete reprieve from the duty to comply with the law. Employers must make sure they're diligent in employment eligibility verification and reverification."

He advises employers to do a self-audit of their I-9 process

In other words, employers should wisely use this time given by this "temporary reprieve" to tighten up on their immigration employment issues.

With the majority of the current presidential candidates running on the platform of "immigration reform" we can expect that this is only the beginning of increasing pressure on employers to verify the legal status of their workforce.

Unless the whole thing collapses again after the election, this may just be the tip of the iceberg.

State laws complicate the issue even further

Nearly 1,600 immigration-related bills have been introduced this year in state legislatures around the country as states are acting to fill the void created by Congress' failure to act on illegal immigration.

These state laws could create major problems for employers, particularly those that operate in more than state. For example, Arizona requires employers to use the E-Verify system, but Illinois prohibits employers from enrolling in the program until the system becomes more reliable.

The proliferation of state and local laws concerning immigration are causing major issues for home builders, most of whom are small businesses that work in more than one jurisdiction, said Jerry Howard, CEO of the National Association of Home Builders. Many already are struggling due to the housing industry's slump, and the new immigration rules are "helping them to go underwater faster," he said.

For more information, see www.stateimmigrationlaws.com

Statement by DHS Secretary Chertoff, Dec 2007

Statement by Homeland Security Secretary Michael Chertoff on the No-Match Appeal
Release Date: December 5, 2007

For Immediate Release
Office of the Press Secretary
Contact: 202-282-8010

Yesterday, the U.S. Department of Justice filed an appeal on behalf of the Department of Homeland Security (DHS) on the injunction against the No-Match Rule in San Francisco, Calif.

I believe that the No-Match Rule is a major step forward in preventing employment of illegal migrants. Contrary to the ACLU's incorrect statements, the rule is not harmful to legal workers. DHS is not abandoning it.

Employers receive a No-Match letter from the Social Security Administration when an employee's name does not match the social security number it has on file. Sometimes there is an innocent explanation for this discrepancy, such as a clerical error. But sometimes the discrepancy reflects the fact that the employee in question is an illegal alien. When employers receive such No-Match letters, they are on notice that the employees in question may not be authorized to work.

Under our No-Match Rule, no employer should terminate an employee based upon a no-match letter alone. But no employer should ignore such a letter or the discrepancy it reveals. The No-Match Rule gives employers and employees 90 days - a full three months - to correct the discrepancy.

If the mismatch is a clerical error, that is a good opportunity to correct the mistake. When the mismatch shows fraud, however, appropriate steps should be taken. Businesses that follow the procedures in the rule will have a safe harbor from enforcement action. Those that ignore no-match letters place themselves at obvious risk and invite suspicion that they are knowingly employing workers who are here illegally.

Far from abandoning the No-Match Rule, we are pressing ahead by taking the district court's order to the Ninth Circuit Court of Appeals. At the same time, we will soon issue a supplement to the rule that specifically addresses the three grounds on which the district court based its injunction. By pursuing these two paths simultaneously, my aim is to get a resolution as quickly as possible so we can move the No-Match Rule forward and provide honest employers with the guidance they need.

The ACLU's lawsuit has put this vital protection on hold. That is bad for immigration enforcement and bad for America's law-abiding employers and their legal workers. The only real beneficiaries of the ACLU's strategy are employers who would rather close their eyes to cheap and profitable illegal labor than obey the laws of our country.