The Department of Homeland Security should carefully review alternatives to the No-Match Rule before summarily dismissing alternatives that would meet DHS objectives while minimizing the burden on small business.
Small Business Administration's Office of Advocacy

In a letter to Department of Homeland Security's (DHS) chief Michael Chertoff, the U.S. Small Business Administration's (SBA) Office of Advocacy (Advocacy) proposed alternatives to the DHS's Supplemental Rule on Safe-Harbor Procedures for Employers Who Receive a No-Match Letter ("No-Match" rule). The alternatives would reduce the cost and impact of the rule on small business.

Advocacy hosted a small business roundtable to obtain input on the rule as well as to consider possible alternatives. As a result of those discussions, Advocacy believes that DHS should "carefully review alternatives before summarily dismissing alternatives that would meet DHS objectives while minimizing the burden on small business." Advocacy says the following alternatives may merit consideration:

Alternative 1: Exempt small entities, or phase in the rule over a period of years. In the proposal, DHS indicates that exempting small entities or delaying compliance dates would actually harm small entities by not providing them with the security of the safe-harbor. As such, no alternative is possible and the proposed rule becomes the only option. However, small businesses believe that DHS could revive the consideration of alternatives by acknowledging the rule is substantive in nature and that it could be implemented in a phased and orderly fashion. For example, by imposing the rule on large entities first, many of the errors in the SSA database could be corrected over time and best practices for resolving "no-matches" could be developed. These lessons could then be used to ease small entities into the compliance process. Large entities (including both private sector and governmental employers) that receive "No-Match" letters have sophisticated human resources departments that are capable of handling this new mandate; however, it will be highly problematic for small entities with limited human resources capacity to try to resolve these "no-match" issues. In Advocacy's view, a "one-size-fits-all" regulation is particularly unsuited here given the tremendous variety of employers and the fact that millions of authorized "no-match" employees populate the SSA database.

Alternative 2: Provide additional time (such as a 180-day extension) for small employers, or at least suspend the running of the timeframes while an employee is actively working with SSA to resolve an issue. With thousands or even millions of employees suddenly contacting their local SSA offices to resolve "no-matches" under the new rule, small businesses believe that SSA will be inundated and overwhelmed with requests for corrections. According to some small business representatives, some employees trying to resolve "no-matches" have had to make several trips to their local SSA office and the documents they need to prove their identity may be difficult or impossible to retrieve, especially for foreign-born, naturalized citizens or U.S.-born citizens from rural or remote areas that do not have good records. Local SSA offices are also often located far from many small, rural, or remote employers, making travel to them difficult, time-consuming, and expensive. The proposed timeframes for small entities could be difficult or impossible to meet. Accordingly, small businesses recommend that DHS consider providing additional time for small entities to comply, such as a 180-day extension. Further, DHS should consider suspending the running of the timeframes when an employee is actively working with SSA to correct the discrepancy (the current rule provides no such provision). Finally, DHS might also consider a tiered approach where timeframes are established based on the size of the employer (with smaller employers receiving more time to comply). Provisions might also be developed that allow more time based on the distance to the local SSA office. Advocacy believes these approaches would more accurately reflect a "reasonable" response by a particular employer.

Alternative 3: Provide a simpler, more straightforward "safe-harbor" that reduces the burden on small employers. One small business representative suggested that DHS adopt a simpler, more straightforward rule that says that an employer who receives a "No-Match" letter should: 1) complete an internal investigation to determine whether the source of the discrepancy is the employer's own clerical error; 2) if not, inform the affected employee of the discrepancy; and, 3) if the employee challenges the discrepancy, require proof that the employee has been in contact with SSA to resolve it. Under this scenario, the reasonable employer could assume that the matter was being handled and would not follow up unless another no-match letter was received (or some other adverse information arose). This approach would reduce the burden on small employers and leave it up to the employee and SSA to resolve the matter. It would be far less complicated and would eliminate the presumption that receipt of a "No-Match" letter puts the employer on notice that the employee may be unauthorized to work in the United States.

Alternative 4: Provide special provisions for employers with short-term, seasonal, or intermittent employees. DHS analysis indicates that the industries with the most "no-matches" are agriculture, construction, and the service sector (such as restaurants or hotels). This is no surprise since these industries employ many short-term, seasonal, or intermittent employees and have high turnover rates. Small business representatives in those industries have suggested that DHS consider industry-specific or special provisions for these industries. This is especially true in agriculture where many employees are hired for 60-day periods. Since "No-Match" letters are only sent by SSA on an annual basis, most of these letters will arrive long after the term of employment has ended. Since the employee no longer works for the employer, the employer's responsibilities should end there. DHS should also specifically clarify that employers are not required to track and contact past employees for whom they receive "No-Match" letters. These employees no longer work for the employer and requiring employers to track past employees would create additional costs and burdens.

Alternative 5: Submit unresolved "no-matches" to DHS for investigation. Rather than placing the entire burden for resolving "no-matches" on the employer and the employee, small business representatives suggested that unresolved "no-matches" involving small employers could be sent to DHS for investigation after the requisite timeframe has expired. This would put DHS on notice of the existence of the "no-match" discrepancy, but not require that the employee be terminated until DHS has had an opportunity to investigate the matter. Such a process would protect from automatic termination the thousands of authorized employees that DHS' analysis shows would be unable to resolve "no-match" discrepancies each year.

Alternative 6: Create a "no-match" ombudsman at DHS where unresolved "no-matches" could be sent after the employee has been unable to resolve a discrepancy at SSA. Some small business representatives believe that DHS should create a special office or appoint an ombudsman to assist employees in resolving "no-matches" where the employee has been unable to resolve within the requisite timeframe. Such an approach could lead to an efficient, inter-governmental correction process with direct lines of communication to investigate "no-matches" and correct the SSA database. This would relieve the burden on employers and protect authorized employees from automatic termination. Such a program might be limited to employees of small employers.