It's a high stakes game of chicken between the Bush Administration and Congress, says ag-labor consultant James S. Holt, and employers are the ones who will likely lose.

The Department of Homeland Security (DHS) in August released a number of proposals designed to “develop a workable solution to the challenge of immigration in the country,” according to Homeland Security Secretary Michael Chertoff. Among those proposals was a final regulation that DHS says clears up past ambiguity regarding Social Security mismatches.

For years, says Holt, who is based in Washington D.C., the Social Security Administration (SSA) has sent “no-match” letters to employers when the agency determines that an employee's name and Social Security Number (SSN) don't match official records.

“Each year, there are literally hundreds of thousands of these no-matches reported,” Holt says. In fact, according to Chertoff, out of the 250-million wage reports the SSA receives every year, as many as 4% show no matches.

Some of these no-matches may result from clerical error — the number was written down incorrectly on the I-9 form, for example — or from name changes resulting from marriage, divorce or other reason. But many are the result of illegal workers using forged and fraudulent documents to obtain work.

“The magnet that brings most economic immigrants into this country is work. And if we have worksite enforcement directed at illegal employment, we strike at that magnet,” Chertoff says.

If you hire help for your operation, that puts you directly in the government's crosshairs. That's because agriculture has one of the highest rates of Social Security no-matches among the nation's business sectors. Holt says that when SSA can't match a name with an SSN, the reported wages go in what is called a “suspense file.” The reported wages in that file are somewhere in the $500-billion range.

Something in excess of a third of all wages that go into that suspense file are reported by agricultural employers, and the agricultural employment in this country is less than 2% of total employment,” Holt says. “So that gives you an idea of how disproportionately concentrated this employment is in agriculture.”

According to DHS, in cases where an employer has a significant number of employees with inaccurate personal identity information, SSA will send the employer a “no-match” letter. It's unclear, however, what a “significant number” is.

How it works

Within 30 days of receiving a no-match letter, businesses should check their records to make sure the discrepancy isn't a clerical or administrative error. If that's the case, an employer can report that error to the SSA and the problem is cleared up.

If that's not the case, the employer then has to bring the employee in and ask him or her to confirm the accuracy of the information and, if necessary, contact the SSA to correct the problem.

“But if the problem can't be resolved within 90 days, then the employee has to come forth with some new, reliable evidence that they're authorized to work, like a passport. Or, if work eligibility can't be confirmed after 90 days, the company is going to have to terminate the employee,” Chertoff says.

What it means

The final regulation that provides tighter guidance on how an employer should deal with a no-match letter becomes effective Sept. 14, Holt says. “After Sept. 14, all employers, agricultural and otherwise, who receive a Social Security no-match letter, will be obligated to confront the employee and get the information corrected, or they will be considered to have “constructive knowledge” that the employee is, in fact, not legally entitled to work in the U.S. That will bring into play the civil and criminal penalties for knowingly hiring an illegal alien,” Holt says.

Howard Rosenberg, a University of California Extension ag labor management specialist, agrees. He says an employer isn't required to follow the steps laid out in the no-match letter.

“There is no new penalty, no new basic change of law that's created by this new regulation. It's just a matter of changing the odds. What it means is employers have a vastly increased risk of being found in violation of the 21-year-old Immigration Reform and Control Act of 1986,” if the employer chooses to ignore the no-match letter and keep those workers on the payroll.

While the new regulation gives employers and affected employees 90 days to correct problems, Holt says, realistically, things will happen much sooner than that. Here's a scenario:

An employer gets a no-match letter, checks the records, finds no discrepancies, and tells the employee they need to talk. If the employee is in the U.S. illegally and is using fraudulent documents to get a job, that employee simply doesn't show up for work the next day.

“The employee doesn't show up tomorrow; he or she just goes down the road to somebody they haven't worked for before, and hires on using those same fraudulent documents,” Holt says. At the same time, employees at the operation down the road do the same thing. “It's going to make the agricultural workforce like a revolving door,” Holt says, and the employees are going to have to keep moving every time a new set of no-match letters comes out.

“In practical terms, I think it sends a bit of a chill through the employer community and through the employee community, as well,” Rosenberg says. “It might drive a lot of people to go underground. A Social Security computer that never sees a name and a number on an employer report can't tell that there's a mismatch.”

Timeframe for enforcement

Ordinarily, Social Security no-match letters would have gone out this spring based on information reported in early 2007 for employees working in 2006. “However, in anticipation of this regulation, the administration held up sending out the 2006 mismatch letters and they're going to be sending those out right after Sept. 14,” Holt says. “So employers are going to have to immediately act on those, because the rule will be in effect.”

According to Chertoff, SSA will send about 15,000 letters a week over a period of eight to 10 weeks, beginning in mid September.

That means employers who are the first to receive the no-match letters have until the middle of December to act. Given Chertoff's estimate of eight to 10 weeks for the letters to be mailed, the musical chairs the letters create will continue into next spring.

“It means that by the middle of February of next year, all the chickens that are unleashed by this rulemaking are going to come home to roost. This is something that people don't have a lot of time to sit back and figure out how they're going to deal with,” Holt says.

There's still the possibility the rule will be challenged in court and be set aside. And that's a possibility, Holt says, because there are some legal questions about whether the rule violates the confidentiality of social security records. However, as of press time, no indication was available that a legal challenge would happen.

In the meantime, if you receive a no-match letter from SSA, you have a choice — if, after following the steps prescribed in the letter and determining that you or the employees in question can't resolve the differences between their reported name and SSN, you can fire the employee or face the heightened risk of charges that you knowingly have illegal workers on your payroll.

But the real question is this, Holt says: “How will people run their operations after the middle of February? That's because operations that need a stable, year-round work force, like cattlemen, will be particularly affected.

“For somebody who has people in year-round jobs, including by now many long-term, valued employees, there is real consequence,” Holt says. “This churning is going to have a devastating impact on those operators.”