On April 25, 2008, the comment period for the Department of Homeland Security’s supplemental proposed rule on “no-match” letters closed. Published on March 26, 2008, the proposed “supplemental rule” amends the original rule published on August 15, 2007 to address three concerns raised by Judge Charles Breyer (Northern District of California) when he preliminarily enjoined implementation of the original rule in October 2007.

The proposed supplemental rule does not change the original rule’s safe harbor provisions that provide employers a 30-day period to determine whether no-match results were caused by errors on their part. If the no-match results were not due to employer error, employees would have 60 days to resolve the discrepancy with the SSA.  Rather, the supplemental rule focused on procedural considerations connected with implementation of the original rule.

The supplemental rule contains a clarification that DHS does not believe the no-match rule changed its policy on the use of no-match letters and, if it did, the change was reasonable. DHS explains that the rule was written to eliminate ambiguity regarding an employer’s responsibilities upon receipt of a no-match letter, since “existing law clearly establishes that employers may be charged with constructive knowledge when they fail to conduct further inquiries in the face of information that would lead a person exercising reasonable care to learn of an employee’s unauthorized status.”

The supplemental rule also rescinds the anti-discrimination provisions included in the original rule and refers employers to the Justice Department for further guidance. The district court was concerned that the anti-discrimination provisions created a serious question of whether DHS had exceeded its authority by interpreting anti-discrimination provisions of the INA (which are enforced by the Justice Department’s Office of Special Counsel and not DHS) to preclude enforcement where employers follow the safe-harbor framework.

Finally, although DHS continues to maintain that the no-match rule “would not have a significant economic impact on a substantial number of small entities” and that the Regulatory Flexibility Act does not mandate it, DHS published an initial regulatory flexibility analysis (IRFA).  Published in response to the preliminary injunction, the IFRA allowed public review and comment on the costs that may be incurred by employers who choose to adopt safe harbor procedures.

According to a study submitted with the U.S. Chamber of Commerce comment to the supplemental rule, the no-match rule would cost employers between $1 billion to $1.6 billion per year to implement. Accordingly, the U.S. Chamber of Commerce requested the no-match rule be withdrawn until a proper Regulatory Flexibility Analysis is conducted. 

Immigrant advocacy groups also submitted comments voicing their concerns that the new rule would cause employers to incorrectly assume that workers listed in no-match letters are not authorized to work and fire them without giving them a chance to correct their records. These groups also expressed concern that the rule may result in increased discrimination based on race and national origin. 

DHS has not announced a timetable for its next action or the promulgation of a final rule. A DHS spokeswoman explained that the department wants to ensure a “quality review” of the hundreds of comments submitted.

The public comments received by the department may be reviewed on the government’s regulations website.