January 2008: Government Affairs

Words: Dan KamysJanuary 2008 Government Affairs

New Year, New Regulation Still Looming

 Jessica BennettJessica Johnson Bennett Director of Government Affairs Mason Contractors Association of America

Recently, the Department of Homeland Security (DHS) abandoned its attempt to enforce the original proposed no-match rule that would have used social security records for immigration enforcement. In late-November 2007, DHS filed a motion in the Northern District of California Federal Court in San Francisco requesting that the lawsuit challenging the rule be put on hold until March 2008. The lawsuit was brought by various business groups including the Chamber of Commerce, several construction trade associations, the American Federation of Labor and Congress of Industrial Organizations, the American Civil Liberties Union and the National Immigration Law Center to block the proposed rule, which would require employers to penalize or fire workers, potentially including U.S. citizens and legal workers whose social security numbers did not match the Social Security Administration (SSA) database. At the time of this writing, the government planned to publish a new revised rule in late-December 2007.

This governmental action came after the U.S. District Court in the Northern District of California issued a preliminary injunction on the rule on Oct. 10, 2007, placing the no-match rule on hold until the litigation surrounding the rule was resolved. This was expected to take several months. The judge heard arguments charging that the SSA database is fundamentally flawed and error prone, and that the rule would result in the firing of countless legal workers as well as discrimination, in addition to the impact and enormous cost potentially facing small businesses.

After hearing all arguments, U.S. District Court Judge Charles R. Breyer issued a preliminary order stopping the government from enforcing the proposed rule, which would affect more than eight million workers, finding it would cause irreparable harm to both innocent workers and employers. During the hearing in October, the judge commented at one point that "it just seems to me, looking at this, this is an enormous potential burden on employers." The court's decision, in this instance, highlights the need to ensure that small business owners' voices are heard as we continue to push for immigration reform. The SSA's own inspector general found that more than 70 percent of the discrepancies in the SSA database belong to native-born U.S. citizens. Discrepancies between workers' social security numbers and SSA records can result from many innocent factors including clerical errors, name changes due to marriage or divorce, or the common use of multiple surnames.

Despite the government's intention to issue a new, revised rule, many in the business community see this as a small victory. Essentially, the government was forced to admit that the rule was both unreasonable and harmful to not only small businesses, but also entire industries across a wide spectrum. In addition, many feel that no matter how DHS alters the rule, any use of a social security no-match letter to enforce immigration law only places yet another regulatory burden on employers who are already bogged down by multiple federal regulations.

This is not a positive way to enlist the business community in working to resolve the problems that government has created. The regulation jeopardizes vital U.S. industries, such as construction, and the overall U.S. economy by needlessly creating uncertainties, disruptions and dislocations throughout broad swaths of the workforce.

The reality is that many employers are currently doing their best to survive and are trying to play by the rules and abide by the law. Any new regulation such as this would simply create an ideal environment for the underground cash economy and the unscrupulous employers who operate in that world. Bad actors who are currently not using legitimate hiring practices will continue with their unscrupulous methods. Implementation of a rule such as this will simply create a bigger demand for "off the books" transactions. Also troubling is that this new rule may fuel an underground market for counterfeit documents. This will provide incentives for not only employers, but also employees whose legal work statuses are in question. This could be a dangerous prospect for potential employees who would then have no protections under the law. In addition, honest, law-abiding businesses would face a huge competitive disadvantage.

In an effort to provide stability to the workforce, the federal government is punishing employees and employers alike. The no-match regulation, while well intentioned, is bad policy and completely unfair to all parties involved, particularly employers such as mason contractors. A regulation such as this should not be allowed to move forward until the DHS provides methods that are both fair and equitable for all stakeholders involved.

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