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The Immigration and Customs Enforcement arm of the Department of Homeland Security is trying to add teeth to the no-match letters that started going out to employers in 1994 and have been widely ignored. Under proposed rules, entrepreneurs would have to fire workers whose Social Security numbers don't match their names and other information or risk paying fines or going to jail. However, a federal judge's ruling has blocked implementation of the rules indefinitely.
In the past, undocumented workers asked by employers to supply Social Security numbers sometimes made up numbers or used other people's. When Social Security notified workers and companies via no-match letters, they could--and often did--simply not respond.
Under the rule, employers who receive no-match letters would have 90 days to remedy discrepancies or submit new documentation, or face fines and possibly jail time, says Pat Reilly of Immigration and Customs Enforcement. If a problem can't be traced to a typographical error, unreported name change or other factor unrelated to legal status, termination may be an entrepreneur's only way to avoid trouble.
A lawsuit by a coalition of groups that includes the AFL-CIO and the American Civil Liberties Union claimed the rules threaten jobs and are flawed because no-matches are often due to errors. According to the ACLU, 12.7 million of the 17.8 million discrepancies in the Social Security database belong to U.S.-born citizens.
At press time, Homeland Security secretary Michael Chertoff said the administration is considering an appeal. But even if the rules take effect, many entrepreneurs may barely be affected. For one thing, Social Security will only send no-match letters to employers who have more than 10 mismatched numbers on their payroll. For another, Immigration and Customs Enforcement is primarily targeting employers who present national security risks, such as contractors on military bases and those who egregiously violate rules by doing things such as providing illegal immigrant workers with false documents.
However this particular battle plays out, attempts to restrict the hiring of undocumented workers will likely continue, so entrepreneurs should always tread through the hiring process carefully.
Mark Henricks writes on business and technology for leading publications and is author of Not Just a Living.