Safe-Harbor Procedures for Employers Who Receive a No-Match Letter

Ms. Marissa Hernandez U.S. Immigration and Customs Enforcement 425 I St. NW, Suite 1000 Washington, DC 20536 RE: SUPPLEMENTAL PROPOSED RULE ON THE SAFE-HARBOR PROCEDURES FOR EMPLOYERS WHO RECEIVE A NO-MATCH LETTER: CLARIFICATION; INITIAL REGULATORY FLEXIBILITY ANALYSIS (DKT NO ICEB- 2006-0004). Dear Ms. Hernandez: On behalf of the small business owners represented by the National Federation of Independent Business (NFIB), I am writing to offer comments on the Department of Homeland Security (DHS) Supplemental Proposed Rule on the Safe-Harbor Procedures for Employers Who Receive a No-Match Letter: Clarification; Initial Regulatory Flexibility Analysis, listed in the Federal Register on March 28, 2008. NFIB appreciates DHS's call for comments on this important rule. NFIB is the nation's leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB's mission is to promote and protect the right of its members to own, operate and grow their businesses. Ninety percent of NFIB members have fewer than 20 employees. The median NFIB member reports gross sales of around $350,000 per year. In 2000, NFIB established the NFIB Small Business Legal Center (formerly known as the NFIB Legal Foundation) to help ensure that federal and state agencies comply with the law in their treatment of small businesses. One of the NFIB Small Business Legal Center's primary concerns is agency compliance with the Regulatory Flexibility Act (RFA), 5 U.S.C. § 601 et seq. (2006), the federal law charged with protecting small businesses from onerous regulations. The NFIB Small Business Legal Center has filed over 20 comments with various federal agencies on RFA compliance matters. The D.C. Court of Appeals has acknowledged the RFA's importance in federal rulemaking when it held that an agency's failure to undertake required regulatory flexibility analysis is not an error that can be considered "harmless." U.S. Telecomm. Ass'n v. FCC, 400 F.3d 29, 42 (D.C. Cir. 2005). In addition to the submission of comments to agencies, the NFIB Small Business Legal Center has vindicated its members' interests in RFA compliance in court. Nat'l Ass'n of HomeBuilders v. U.S. Army Corps of Engineers, 417 F.3d 1272 (D.C. Cir. 2005) (finding RFA applied to Army Corps' Clean Water Act nationwide permit rulemaking). Background On August 15 2007, DHS issued a Final Rule entitled "Safe-Harbor Procedures for Employers Who Receive a No-Match Letter." The rule sought to outline procedures that would remove from liability employers who receive "no-match" letters from the Social Security Administration (SSA) when their employees' W-2 forms do not match SSA's records. A consortium of labor and business groups, led by the AFL-CIO and the U.S. Chamber of Commerce, filed suit in the United States District Court for the Northern District of California to prevent the issuance of these letters under the new rule, on the grounds that DHS had not properly explained its decision for changing its policy, as required by the Administrative Procedures Act (APA), and had not conducted a required Initial Regulatory Flexibility Analysis (IRFA) under the Regulatory Flexibility Act (RFA), among other grounds. The NFIB Small Business Legal Center (formerly known as the NFIB Legal Foundation) filed an amicus curiae brief in support of these groups. On October 10, 2007, the U.S. District Court granted a motion for preliminary injunction against DHS, pending resolution of the stated issues. The court agreed with the AFL-CIO that DHS was attempting to promulgate a new rule that departed from past procedures, and therefore needed to explain the reasons behind such a change. As the court explained, "agencies are free to change course as their expertise and experience may suggest or require, but when they do so they must provide a reasoned analysis indicating that prior p…