Fresh Produce Discussion Blog

Created by The Packer's National Editor Tom Karst

Tuesday, October 28, 2008

Safe harbor - supplemental final rule issued

As noted earlier, the Department of Homeland Security has pushed its supplemental final rule forward on the no-match rule for employers. From the summary in today's FR:

The Department of Homeland Security (DHS) is finalizing the Supplemental Proposed Rule published on March 26, 2008 and reaffirming regulations providing a ‘‘safe harbor’’ from liability under section 274A of the Immigration and Nationality Act for employers that follow certain procedures after receiving a notice— either a ‘‘no-match letter’’ from the Social Security Administration (SSA), or a ‘‘notice of suspect document’’ from DHS—that casts doubt on the employment eligibility of their employees. DHS is also correcting a typographical error in the rule text promulgated in August 2007. DATES: This final rule is effective as of October 28, 2008.


TK: Find the entire rulemaking docket here. The DHS estimated that a firm with more than 500 employees with a 40% no match rate would spend $30,239 complying with the rule. Reaction continues to roll in. From the California Farm Bureau.

In spite of Chertoff's eagerness to have the court revisit the issue, a California Farm Bureau specialist said he expects the injunction will remain in place for at least several months. California Farm Bureau Federation Associate Counsel Carl Borden, who has been following the case and has read the new document, said the Homeland Security response did not revise the rule, but simply provided more background information to justify it.

"Nothing's changed. The government intended this whole process to address the court's issues with the no-match rule. DHS didn't change a word of the no-match rule," Borden said. "All they did was give additional background for it. They also conducted and concluded from a small-employer impact analysis that the rule will not unduly burden small employers."

But the United States Chamber of Commerce contends that the rule's aggregate cost to employers would range from $1 billion to $1.6 billion annually.

Homeland Security says its response clarifies its position that an employer must take reasonable steps to resolve a Social Security number discrepancy identified in a Social Security Administration no-match letter. DHS says the failure to take such steps, coupled with the employer's receipt of the letter, proves the employer had "constructive knowledge" that a current employee identified in the letter is not eligible to be employed in the United States--a violation of federal law. In addition, the rule specifies the specific steps an employer may take to earn a "safe harbor" guarantee that Homeland Security will not use a no-match letter as evidence.

"No-match basically says you are going to get a letter from Society Security as an employer. It is going to tell you there is a problem. You have to resolve the problem," Chertoff said. "If you take the (no-match) letter and throw it in the wastebasket because you do not want to be bothered or you do not want to get the bad news, then you are taking a risk."

Borden said he believes the issue will be tied up in court for a long time.

"DHS says its effort will satisfy the court's concerns about the rule and that the court will lift the injunction," Borden said. "But the plaintiffs will vigorously contend the supplemental rulemaking didn't come close to fixing the problems identified by the court. The stakes are so high that no matter how Judge Breyer rules, it's a given the losing side will appeal."

Homeland Security originally proposed the no-match rule in June 2006 and first issued it in final form in August 2007.

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Economy - where from here?

Just back from the PMA convention, where on exhibitor told me it was a place that was happily insulated from the doom and gloom in recent headlines. Unfortunately, as we return to our offices, the doom and gloom have not departed. Consider this story that quotes the now-familiar economist Roubini:

U.S. house prices will fall by the most since the Great Depression and continue to decline until at least 2010, said Nouriel Roubini, the professor at New York University's Stern School of Business who predicted the current financial crisis in 2006.

''I expect home prices are going to fall at an annualized rate of 16 percent,'' Roubini said Monday in a Bloomberg Radio interview. ``The cumulative fall in home prices is going to 40 percent until 2010. It's the biggest drop in home prices since the Great Depression.''

The latest S&P/Case-Schiller home-price index of 20 U.S. cities dropped a more-than-forecast 16.3 percent in July from a year earlier, after a 15.9 percent decline in June. The gauge has fallen every month since January 2007, indicating that the worst housing recession in at least a generation has yet to bottom out even before this month's market turmoil.

As many as ''21 million out of the 50 million homes that have mortgages are going to go into negative equity,'' Roubini said. ``People will have an incentive to walk away from their homes.''

The 50-year-old former senior advisor to the U.S. Treasury Department forecast in February a ''catastrophic'' financial meltdown that central bankers would fail to prevent and that would lead to the bankruptcy of large banks exposed to mortgages. His comments preceded the collapse of Bearn Stearns & Cos. and Lehman Brothers Holdings Inc.

``We're at the beginning of a U.S. and global recession, Roubini said. ``We're going to have a severe and protracted two- year recession.''

It would be no surprise if the U.S. Federal Reserve lowered interest rates by 50 basis points to 1 percent, Roubini said, without being specific on the timing of the cut. Rates will subsequently be reduced to ''nearly zero percent'' as a recession takes hold, he said.


TK: We can hope Roubini is wrong, which has been a rare event. Even if he is right, however, all is not lost. One of the most memorable moments of the convention, for me, was Bruce Taylor's speech to attendees about his experience when things weren't going well. From his speech:


Finally, let me tell you a personal story to provide encouragement for you. I am sure a touch of fear has crossed your mind recently. Fourteen years ago I did not have a job. I had started a new company, but that was only a piece of paper. I had business cards made at Kinko’s. I would spend the day in a small office at our home…and when no one was looking I would lie on the floor and stare at the ceiling… for hours. I was scared… and it felt like I had nothing. But usually about the time I was feeling sorriest for myself, our youngest son would crawl in and lay on top of me… and Linda would come in with a hug and a word of encouragement. In the next twelve months I came to learn that instead of having nothing… I really had everything. I had a loving and supportive family; I had former suppliers and former customers who wanted to support me; I had friends and former associates who wanted to be on the new team; and I had the benefit of thirteen years of PMA-inspired events, education and relationships.

I tell you this because today, each of you has more going for you than you think. You have more strength and support than you know.

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