NRCA issues comments about the Department of Homeland Security's proposal to rescind the no-match rule
September 18, 2009
VIA ELECTRONIC MAIL
Charles McClain, National Program Manager
U.S. Immigration and Customs Enforcement
Office of Investigations MS 5112
500 12th Street, SW
Washington, DC 20536-20024
RE: DHS Docket No. ICEB-2006-0004RIN 1653-AA59Safe-Harbor Procedures
for Employers Who Receive a No-Match Letter: Rescission
The National Roofing Contractors Association (NRCA) would like to provide the following
comments on the Department of Homeland Security's (DHS) proposal to amend its regulations
by rescinding the amendments promulgated on August 15, 2007, and October 28, 2008,
relating to procedures that employers may take to acquire a safe harbor from receipt
of no-match letters, as published in the Federal Register on August 19, 2009.
Established in 1886, NRCA is one of the nation's oldest trade associations and the
voice of professional roofing contractors worldwide. It is an association of roofing,
roof deck, and waterproofing contractors; industry-related associate members, including
manufacturers, distributors, architects, consultants, engineers, and city, state,
and government agencies; and international members. NRCA has approximately 4,000
members from all 50 states and 54 countries. NRCA contractors typically are small,
privately held companies, and the average member employs 45 people in peak season,
with sales of about $4.5 million per year.
NRCA and its members are committed to full compliance with the law and recognize
the need for improved enforcement of immigration laws. NRCA has strongly advocated
comprehensive reform of our nation's immigration laws, including enhanced worksite
enforcement measures, for many years, and continues to work toward this objective.
However, NRCA firmly believes that the DHS no-match rule is fundamentally flawed
and is deeply concerned about the adverse impact that implementation of the rule
would have on both employers and employees in the roofing industry. Moreover, NRCA
does not believe the rule would achieve the stated goal of improving worksite enforcement
of immigration laws, and may significantly exacerbate the problem of illegal immigration
NRCA notes that the final no-match rule issued in October, 2008, by DHS's own admission,
contains no substantive changes from DHS's original rule published in August, 2007,
and later blocked by an injunction issued by the United States District Court for
the Northern District of California in AFL-CIO et al. v. Chertoff. As a litigant
in the suit filed against the original final rule, NRCA does not believe the final
rule addressed the concerns of the District Court that led to the injunction.
As such, NRCA strongly supports DHS's August 19 proposal to amend its regulations
in such a way that will result in the no-match rule being completely rescinded.
The major reasons for NRCA's strong opposition to the no-match rule, and support
for the rescission proposal, are outlined below.
Inaccuracy of the Social Security Administration Database
It is a well-known fact that the Social Security Administration (SSA) database used
to generate no-match letters contains many inaccuracies, a significant problem that
has been amply documented by government auditors. According to a report by the U.S.
Government Accountability Office issued in July, 2006, the SSA database "contains
data that are incomplete and outdated," and that "information in the files can also
be misleading." In December, 2006, the SSA's Office of Inspector General estimated
that the agency's database used for the no-match letters has an error rate of 4.1
percent, and that 70 percent of these errors involve native-born U.S. citizens.
As such, no-match letters often result from name changes and clerical errors, such
as transposed numbers or other honest mistakes. For the construction industry, and
the roofing sector in particular, this problem is severe, as workers who identify
themselves as being Latino or Hispanic represent fully one-third of the workforce.
Name-matching problems with SSA are common among this community due to the multiple
surnames of individuals.
NRCA's members are deeply concerned that the DHS no-match rule, if implemented,
would result in the termination of employees who are in fact authorized to work,
but who are unable to obtain resolution of a no-match problem that occurs because
of corrupt or erroneous data in the SSA database. DHS should not use the SSA database
for immigration enforcement purposes until the accuracy of the system is dramatically
Failure to Perform Regulatory Analysis Required By Law
NRCA questions the determination that the no-match rule "is not a major rule as
defined by section 804 of the Small Business Regulatory Enforcement Act of 1996"
because it "has not been found to be likely to result in an annual effect on the
economy of $100 million or more." This certification is disputed in an analysis
of the supplemental proposed rule by Richard B. Belzer, Ph.D., entitled "Comments
on DHS' Safe-Harbor Interim Regulatory Flexibility Analysis (IRFA)." Belzer's analysis,
based on DHS's raw numbers in the IRFA, finds that "the aggregate costs to employers
alone from the proposed rule will range from $1 billion to $1.6 billion
per year." This conclusion is based on DHS's own estimate of the cost of complying
with the safe harbor procedures for employers who receive no-match letters. In addition,
Belzer's analysis of data in the IRFA also concludes that there would be substantial
economic and social costs to legally authorized employees who cannot resolve
no-match problems with the SSA.
Belzer's analysis also concludes that the DHS data in the IRFA "show that the proposed
safe-harbor rule is economically significant under Executive Order 12866 and under
the Congressional Review Act." Thus, DHS would be required to perform a formal Regulatory
Impact Analysis on the proposed rule under current law, and must do so before moving
forward with any implementation of the rule. Without such analysis as required by
law, the rule must be rescinded.
Small Businesses Disproportionately Burdened
NRCA believes that the no-match rule would adversely impact small businesses disproportionately.
Comments filed in the docket of the 2007 rule by the U.S. Small Business Administration's
Office of Advocacy supports this conclusion. The Office of Advocacy commented that;
Advocacy believes that the supplemental proposed "No-Match" rule, if finalized,
will have a significant economic impact on a substantial number of small entities.
As such, DHS should prepare and publish with any final rule a Final Regulatory Impact
Analysis (FRFA) under the RFA. Advocacy notes that the FRFA must include, in addition
to the economic analysis of the rule, a summary of issues raised in public comments
on the IRFA, the agency's response to them, and a statement of the changes the agency
has taken to minimize the impact on small entities.
Given the impact of the rule on small entities, the construction industry and the
roofing sector, which are both dominated by small firms, will be disproportionately
impacted. (In 2005, 92 percent of all construction firms had fewer than 20 employees.)
Small construction firms often have little or no administrative staff, and the bulk
of its workforce (including management) is outside of their home offices much of
the time. The administrative burden of having to comply with the complex regulations
in the no-match rule would certainly add to the growing paperwork burden that already
threatens the viability of many small businesses in the construction industry.
In addition to the administrative hardships the no-match rule would impose on small
businesses, smaller firms would also be disproportionately impacted because they
have greater difficulty in affording shocks to the size of their labor forces compared
with larger firms. This is especially true in the construction industry, which operates
under very low margins and unique demands, such as weather restrictions, performance
and bonding requirements, and strict timetables for delivery of goods and services.
Absorbing labor shortages in the middle of projects is potentially disastrous for
small construction firms, as failure to meet timetables can result in non-payment
by the building owner or general contractor. Further, worker shortages disproportionately
impact smaller construction companies because it jeopardizes their ability to bid
for future contracts.
One of the greatest potential costs that would be faced by employers if the rule
is implemented is the increased likelihood of discrimination lawsuits brought about
by the required termination of employees who cannot resolve SSA no-matches. The
need to defend against even meritless claims brought by terminated employees will
result in significant legal expenses for employers. Furthermore, the DHS instructions
for employers in the supplemental proposed rule that reference Department of Justice
information on this subject are inadequate.
Insufficient Safe Harbor for Employers
The 2008 final rule defines what constitutes a "reasonable response" by an employer
to a no-match letter and mandates specific steps to be taken by the employer within
defined periods of time. The rule's preamble suggests that taking such measures
may allow the employer to avoid liability and mitigate or eliminate potential
penalties, but still leaves many questions unanswered. A true safe harbor would
provide the employer with protection from all worksite enforcement actions taken
in relation to the no-match guidance.
Out of fear of non-compliance with the rule, employers may become extra vigilant
in trying to verify an employee's identity and eligibility to work in the U.S. However,
there is an extremely fine line for the employer between ensuring that your workforce
is legal and violating existing anti-discriminations laws. For example, an employee
may present documents other than a Social Security card when completing the I-9
Form. If a no-match letter is subsequently issued, the employer may then confront
the employee and request to see the employee's Social Security card. This type of
situation would likely present an issue regarding anti-discrimination laws already
in effect. Since DHS has not been able to provide clarification on how an employer
should respond to such a situation and provide a safe harbor that ensures protection
from liability with respect to anti-discrimination laws, the no-match rule must
Another problem is that the rule would significantly increase the scope of what
is considered "constructive knowledge" under existing federal immigration statutes.
It states that "the employer's obligations under current law, which is that if the
employer fails to take reasonable steps after receiving such information, and if
the employee is in fact an unauthorized alien, the employer may be found to have
had constructive knowledge of that fact." NRCA questions whether this expansion
of the definition of constructive knowledge in the rule is justified in existing
One of the ways by which an employer can be put on notice is by receiving a written
notification from DHS. Unlike SSA, DHS does not have a mechanism in place that regularly
checks and reports mismatched immigration documents. Rather, DHS generally is made
aware of mismatched immigration documents in the context of an I-9 Forms audit.
As noted in the final rule, if an employer receives a letter from DHS, the employer
is expected to resolve the issue by "tak[ing] reasonable steps, within 14 days of
receiving the notice, to attempt to resolve the question raised by DHS about the
immigration status document or the employment authorization document." However,
DHS provides no specific guidance as to what those steps should be and what an employer
should do to rectify the situation. This is yet another reason why the no-match
rule must be rescinded.
Another problem with the rule is that it is not clear what exactly constitutes receipt
of a no-match letter by an employer. The rule does not state what happens in the
instance where an SSA no-match letter goes directly to an employee at the employer's
place of business. Is the employer considered to be on notice and have constructive
knowledge in this situation? This is further reason why the finale rule must be
Termination of Lawfully Documented Workers
According to information in the DHS IRFA, the 2008 final rule, if implemented, would
result in between 37,000 and 165,000 legally authorized workers losing their
jobs because they are unable to rectify no-match problems with SSA. Some authorized
workers who cannot resolve no-match problems may be forced into long-term unemployment.
The social and economic costs of this outcome would be staggering. Richard Belzer
estimates the aggregate social welfare costs to authorized workers who cannot
resolve no-match problems will be between $8 billion and $37 billion depending on
the percentage of no-matches that are authorized vs. unauthorized workers.
In addition to causing many authorized workers to lose their jobs because of unresolved
no-match problems, it is highly likely that the DHS no-match rule would result in
substantial numbers of legally authorized workers being terminated when an
employer receives a no-match letter before the employee can even begin the
process of attempting to resolve the problem with SSA. Given the high degree of
complexity in the final rule and the uncertainty associated with attempting to implement
the rule's "safe harbor" procedures, many employers will simply make a "business
decision" to endure the economic disruption associated with losing a valued employee
rather than risk legal liability by attempting to remedy the no-match problem. Out
of caution, panic and confusion surrounding the intricacies of the rule, if implemented,
many employers would likely select the safe legal route by shedding the potential
legal liability associated with workers who are the subject of no-match notices
by firing these employees.
As a result, it is likely that many native-born U.S. citizens and lawfully documented
immigrants will face termination if the no-match rule were to be implemented. The
social costs of this regrettable outcome of the no-match rule are extraordinarily
Insufficient Time for Resolution
The current timeframes established in the rule for resolving no-match problems are
insufficient. Both large and small employers would be faced with challenges to meet
the 90-day standard set forth by the rule. The employer has only 90 days, from the
date of receipt of the letter or notice, to ensure and confirm that the discrepancy
has been rectified. Thus, an employee has less than three months to work out a resolution
with the SSA bureaucracy, which could often be an insufficient amount of time. It
is well known that efforts to rectify data problems with SSA can, and often do,
take significantly longer than 90 days under existing conditions. This problem will
be exacerbated by the exponential increase in volume that SSA offices will experience
if the no-match rule were to be implemented.
To reiterate, by DHS' own estimates, the failure by employees to resolve no-match
problems within the 90-day allotment will result in the termination of thousands
of lawfully authorized workers, despite good faith efforts to correct the
Impact on Illegal Immigration
The no-match rule would effectively apply only to employers who are making good
faith efforts to comply with the law, and therefore does not address the problem
of "bad actor" employers who operate in the underground economy, do not complete
the required I-9 Form and pay workers "under the table" in order to avoid federal
law. By not addressing the bad actor employers and only proposing increased regulations
on those employers trying to act in accordance with the law, the no-match rule will
merely increase incentives for employers and employees to enter the underground
economy. Workers in the underground economy do not pay taxes and remain in the shadows,
and employers are not held accountable.
Thus, the rule, if implemented, would likely have little discernable affect on reducing
illegal immigration and in fact could seriously exacerbate the problem by increasing
incentives for both employers and workers to operate in the underground economy.
This would be harmful to employers who are now attempting to operate within the
law since it would increase the competitive advantage that bad actor employers have
in the marketplace. Creating further incentives for employers and employees to operate
in the underground economy is neither sound economic policy nor in our national
By focusing its regulatory efforts on employers who are attempting to comply with
the law, NRCA believes that the no-match rule would be a misallocation of scarce
resources which could be put to better use targeting those employers that deliberately
evade the law.
To conclude, NRCA believes that the no-match rule issued in October, 2008, would
not achieve the stated goal of reducing illegal immigration, but would have substantial
negative impacts on our nation from both an economic and national security perspective.
The rule would have severe negative impacts on both native born and immigrant workers
who are in fact authorized to work in the U.S. by depriving them of the right to
work and earn a living for themselves and their families. As such, NRCA strongly
supports the August, 2009, proposal to amend federal regulations in order to fully
rescind the no-match rule.
Duane L. Musser
Vice President of Government Relations