Experts contend that legal workers could get caught in the net of the Department of Homeland Security’s initiative, which will force companies to either resolve within 90 days discrepancies between a worker’s name and Social Security number or fire the employee.

Mismatches occur in about 4 percent of the 250 million earnings reports submitted annually to the Social Security Administration. Companies that receive these “no-match letters” currently aren’t compelled to act on those inconsistencies.

Employers don’t resist confirming work eligibility, but are concerned about flaws in government databases, according to groups representing them. The HR Initiative for a Legal Workforce says that the Social Security Administration estimates that 17.8 million of its re¬cords have “no-match” inconsistencies affecting 13 million Americans.
 
Some of the differences between company and government information are due to clerical errors or changes in marital status. But the 90-day window can close quickly in the bureaucratic resolution process.

“It’s going to knock out some people who are not foreign nationals, who are not here on temporary visas,” says Montserrat Miller, a lawyer with Greenberg Traurig in Washington.

About 5 percent to 10 percent of the U.S. workforce could be vulnerable, says William Manning, a partner at Jackson Lewis in White Plains, New York.

“If the government goes around disenfranchising those people, you could have a recession or depression,” he says.

The homeland agency takes a more benign view of the regulation, which will be implemented in this month (September). Homeland Security Secretary Michael Chertoff describes the initiative as a tool to help employers deal with no-match letters.

“This regulation lays out a clear path to doing the right thing,” Chertoff said during a press conference. “What the company may not do is ignore the problem.”

Other steps the administration is taking to curtail illegal employment include raising civil fines as high as $12,500 per violation and eventually requiring 200,000 federal contractors to use E-Verify, a government electronic verification system formerly called Basic Pilot.

One critic, the Society for Human Resource Management, asserts that the system is inefficient and ineffective against identity theft. Homeland Security says it is adding a photo-screening mechanism to the system to help combat stolen identity.

Chertoff calls E-Verify “quick and … easy to use” and emphasizes that companies that follow the no-match procedures will avoid trouble.

“The person who does their best in good faith has nothing to fear from us,” he says. “We’re going to clamp down on employers who knowingly and willfully violate the law.”

Employer advocates, however, say the no-match regulation now effectively makes a company’s failure to act an immigration violation.

“They’ve turned the presumption completely around,” Manning says.

As it announced punitive immigration measures, the Bush administration also says it will streamline existing temporary worker programs that help industries such as agriculture, landscaping and hospitality.

Still, those groups may be hit hard.

“You could see doors closing on businesses,” says John Gay, senior vice president for government affairs and public policy at the National Restaurant Association. “We warned against doing this—enforcement without reform.”

—Mark Schoeff Jr.