Although the Social Security Administration won't be sending out no-match letters to employers this year, it's only a matter of time before the issue resurfaces, immigration lawyers say.
The Department of Homeland Security and the Social Security Administration had originally planned to start sending no-match letters — meant to alert employers the Social Security information contained in an employee's W-2 form doesn't match Social Security database information — to employers in September.
The SSA scrapped the plan this year after civil, labor and business groups sued the government. A federal judge also blocked the plan in October, ruling it was too strict and could result in legal workers losing their jobs.
Under a proposed Department of Homeland Security regulation, letters from the Social Security Administration alerting business owners to mismatches also would include a letter from DHS explaining that employers could face criminal charges by hiring illegal immigrants.
Failure to respond properly to no-match letters could be used as evidence in civil and criminal actions brought by DHS, subjecting employers to fines, seizure of assets and even imprisonment.
The scrapped plan "at least gives restaurant owners a brief reprieve," said Carolyn Richmond, an attorney with the New York law firm Fox Rothschild LLP. Richmond is co-chairwoman of the firm's Hospitality Practice Group, which includes representing and counseling clients in the hospitality industry on a variety of labor and employment matters.
"We're not sure, but it is off at least until the spring," she said. "That is the best we can tell."
In his October ruling, U.S. District Court Judge Charles Breyer said implementing the plan would present an unfair burden on businesses. If the new rule were implemented, Breyer said, thousands of employers likely would incur significant expense to develop costly human resource systems to comply with the provisions of the regulation.
However, the issue may resurface even sooner than the spring. The Department of Homeland Security is looking at ways to rewrite the regulation in order to move it through.
"We're currently seeing what we can do to address the concerns that the judge entered in order to see whether we can get the injunction lifted, and then go forward with this regulation," Homeland Security Secretary Michael Chertoff told Congress on Nov. 6.
"I understand that enforcing the laws is now going to have an economic impact on some industries," Chertoff said. "That's why we continue to urge Congress to address this by making sure that the law is reformed. But until Congress acts, we have the law that is on the books."
Safe harbor steps unrealistic
Each year, the Social Security Administration sends letters to employers citing discrepancies between the Social Security number provided by an employee and Social Security Administration records. Out of the approximately 250 million wage reports the SSA receives each year, as many as 10 million belong to employees whose names and corresponding Social Security numbers do not match SSA's records. Often, the mismatched information is due to illegal immigrants using false information to gain employment.
The letters sent out under the proposed DHS regulation also would include "safe harbor" steps that businesses can take to avoid penalties. Employers would have 90 days to resolve any problems before government action.
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However, those safe harbor steps don't take into account the realities faced by business owners, some attorneys say. Single-unit restaurant owners who typically spend their day working in the kitchen may be ill-equipped to serve as an enforcement arm of DHS.
"For some of the people in smaller establishments, this is not something that is regularly across their desks," said Fred Manning, an attorney with the Columbia, S.C., law firm of Fisher & Phillips. "When they get a Social Security mismatch letter, for how many of those 90 days will a letter sit on the desk when there are more pressing matters to attend to?"
Also, because of inadequacies in the SSA database and the sheer volume of letters to be issued, some say 90 days simply isn't enough time to resolve a problem.
"The local Social Security offices are the ones who I anticipate having to deal with this," Manning said. "If you have ever been in one, it is literally 'take a number.'"
Reform unlikely to come soon
Many restaurant owners say the solution to the problem of illegal workers lies in comprehensive immigration reform; however, lawyers say the issue isn't likely to be addressed until after the presidential election, which means reform won't be enacted until well into 2009, if not later.
In the interim, business owners need to take steps to protect themselves.
"The first step is to continue to follow the I-9 documentation process," Manning said. "Make sure you are keeping good and thorough records with respect to that process."
Enforcement sweeps are likely to continue as well, and the restaurant and service industry is a favored target, he said.
"The employer is going to be held to some very severe sanctions if they don't have the paperwork and if it's not filled out correctly," Manning said.