ABCO Payroll Services®

By Roger Reynolds

STANDBY FOR CHAOS!

On Friday August 10, 2007 the Bush administration announced their "Worksite Enforcement Initiatives".

The new policies will become effective in mid September. Each year the SSA (Social Security Administration) sends letters to employers called "no-match" letters when the social security number and name doesn't match the SSA records. When the letters are sent out for tax year 2006 they will be accompanied by a letter from ICE (Immigration and Customs Enforcement) requiring the employer to clear up the discrepancy or fire the employee within 90 days. Otherwise, ICE can assume the employer is knowingly employing unauthorized workers and may face penalties and sanctions.

In practice, SSA intends to send letters to employers who have 10 or more employees with discrepancies with their records. SSA will be sending letters to 140,000 employers. That represents, at a minimum, 1.4 million workers.

This is going to create CHAOS particularly with employee leasing companies. Now, employee leasing clients will find out what "Co-employer" really means when the leasing companies tell them they need to terminate some of their employees! Employers that didn't have 10 or more employees with discrepancies are going to be affected because they are under that big "Umbrella" the employee leasing companies are always talking about!

Will employee leasing companies take the letters seriously? The fines range up to $2,200 per employer for the first offense, and then it goes up for the second and third offense. Employers who have systemic violations of the law or willful violations of the law that meet the criminal standard will be facing criminal prosecutions and the possibility of jail. I think employee leasing companies will take the letters seriously!

We need to remember that chaos and confusion means there is opportunity for us to make in-roads with clients of employee leasing firms.

In case you're wondering why the federal government has decided to start enforcing existing laws at this time let me quote Secretary of Homeland Security Chertroff:

"As you doubtless know, Secretary Gutierrez (Secretary of Commerce) and I spent a good deal of time over the last several months working with Congress to develop a workable solution to the challenge of immigration in this country."

"We're obviously disappointed in the fact, as is the President, that Congress has not chosen to act on our comprehensive solution. The Senate bill that we worked on would have given us important new tools and resources to strengthen border security, increase and toughen interior enforcement, and help meet the needs of our growing economy through a temporary worker program. Our hope is that the key elements of the Senate bill will see the light of day at some point. But until Congress chooses to act, we're going to be taking some energetic steps of our own."

During the news conference in which Secretary Chertoff made previous remarks he was asked the following questions:

QUESTION: Secretary Chertoff, could you respond first to employers' concerns that the no-match letter is going to cause huge havoc? And then could both of you also speak to the larger goal behind all these rules and regulations? Are you trying to force Congress's hand? Are you trying to squeeze employers? What's the larger purpose?

PART OF SECRETARY CHETOFF'S RESPONSE:

"Let me be very clear about what we're doing here. I have said with absolute consistency, from before we started the immigration reform effort earlier this year, that I was determined to enforce the laws of this country to the utmost of my vigor. And we've done that since we've—at least since I've been Secretary. We had hoped that immigration reform on a comprehensive basis would give us a much wider set of tools; we don't have that. We still think Congress can act on it. But until the laws change, we are enforcing the laws as they are to the utmost of our ability, using every tool that we have in the toolbox, and we're going to sharpen some of those tools."

"So this is not a reaction to anything. It is simply the discharge of certainly my oath of office, which requires me to execute the laws as they are."

My interpretation of the sudden enforcement of the worksite laws is that the administration is trying to put enough pressure on congress until they say uncle and pass a comprehensive immigration reform bill.

Both parties are looking to the future and the impact the Hispanic vote will have in this century. Loosing that block of voters would end a party's chances of controlling congress or the White House.

I try to see something positive in everything and what I see is another reason your clients should not be a co-employment relationship.