Costly ‘No-Match’ Rule to Be Rescinded
The Department of Homeland Security (DHS) announced on July 8 its intention to rescind the controversial Social Security “No-Match” Rule requiring employers to fire workers whose names and Social Security numbers don’t match in the Social Security Administration (SSA) database.
Adopted by the Department of Homeland Security (DHS) and touted as a means of uncovering illegal immigrants, the rule was scheduled to go into effect in September 2007.
However, a coalition of businesses and organizations — spearheaded by the U. S. Chamber of Commerce and backed by NAHB — filed suit in the U.S. District Court of Northern California challenging the rule.
The coalition convinced the court that the DHS had bypassed the procedures required to adopt regulations, including the failure to consider the cost of the rule’s complicated procedures on businesses. A subsequent analysis found that the annual cost of the rule was between $3,000 and $33,000 per business, depending on the number of employees.
On receipt of a “No-Match” letter from the SSA, both employers and affected employees would have been required to follow a lengthy step-by-step process attempting to resolve the discrepancy, and then attempting to receive from an understaffed SSA acknowledgment that the records had been corrected.
If after 93 days the no-match remained unresolved, employers were required to fire the worker or risk potential prosecution for illegal hiring under the immigration laws, based on the rule’s assertion that the employer now had constructive knowledge of the employee’s illegal status because of the no-match.
The coalition was further able to demonstrate to the court that the SSA records were riddled with errors, and that the vast majority of the no-matches resulted from clerical errors and marital name changes, not illegal immigration status.
After determining that the effects of the rule would be onerous and potentially disastrous for legal workers and even U.S. citizens, the court issued a nationwide preliminary injunction pending a hearing, halting implementation of the rule and barring the SSA from issuing “No-Match” letters.
The case had been actively litigated since the injunction was issued. This month’s DHS announcement that the rule will be rescinded signals an effective end to the litigation and represents a victory for the NAHB-backed coalition.
For more information, e-mail David Crump at NAHB, or call him at 368-5242 x8491.