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New immigration rules will force firings
San Francisco Chronicle


August 20, 2007

WASHINGTON -- People clamoring for a crackdown on illegal immigration got their wish with the Bush administration's announcement of sweeping new enforcement measures that will force employers to fire the millions of illegal workers they now employ.

"We strike at that magnet" of jobs, said Homeland Security chief Michael Chertoff, announcing a new rule holding employers liable for workers whose Social Security numbers do not match government records. The new rule, announced last week, takes effect in 30 days.

Sen. Dianne Feinstein, D-Calif., predicted a "catastrophe" in her state's $32 billion agriculture industry as the new rules become effective with the fall harvest. But the proposal met no opposition from House Speaker Nancy Pelosi, who issued a statement saying, "Securing our border remains a top priority for the New Direction Congress."

The rule will require employers to fire employees unable to clear up problems with their Social Security numbers 90 days after they have been notified or face sanctions and a fine of at least $2,200 for a first offense. Until now, employers have routinely ignored what are called no-match letters.

"In certain industries and in certain states, there will be a very significant impact on the functioning of businesses or entire sectors," said Deborah Meyers, a senior policy analyst at the Migration Policy Institute, a nonpartisan think tank. "Some employers are going to find themselves having to fire significant portions of their workforces, and I think there will be employees -- some who are authorized and some who are not -- who will find themselves out of a job."

Business groups pointed out that a significant fraction of no-match letters are in error because of name changes and clerical mistakes, and could cause trouble for legal workers. Immigrant rights groups said the rule could drive millions of illegal immigrants who are now paying taxes underground and drive businesses who depend on them to relocate overseas.

The system also has a big loophole that some experts warn could lead to more identity theft. Social Security does not catch numbers that are valid but have been stolen and used by another person, increasing the incentive to steal valid Social Security numbers.

Hiring undocumented workers has been illegal for two decades, but until now, employers were not held liable for fraudulent documents.

"This is going to cause a lot of pain, but that pain I hope will be an impetus for our nation to get realistic and fix our broken immigration system," said Larry Rohlfes, assistant executive director of the California Landscape Contractors Association. "In the meantime, people are going to be hurt."

Rohlfes predicted that many workers would not leave the country but go underground as unlicensed contractors, where they will not pay taxes. "It's going to hurt our remaining workers because the underground economy competes with us and because they have much lower costs," Rohlfes said.

Much will hinge on how effectively the administration enforces the new rules.

"If you look at what ICE (Immigration and Customs Enforcement) has been doing, they've been pretty busy," said Karen Maarouf, director of product marketing for Workforce Logic, a Sonoma, Calif., company that sells worker verification software. Maarouf said employers have to report Social Security withholding on all workers, so the new rules will affect everyone.

About 12 million people are estimated to be in the country illegally, and about half a million more have been arriving each year. Illegal immigrants make up about 5 percent of the civilian workforce, according to the Pew Hispanic Center. Most have arrived since 1990.


E-mail Carolyn Lochhead at clochhead(ast)
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