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By Knight Kiplinger

The Kiplinger Washington Editors

July 3, 2008

The largest U.S. banks are hurting badly, and the pain is starting to spread. Most small and midsize banks are still ready to lend to businesses, but they're getting nervous. This week's Kiplinger Letter examines the outlook.

ALSO IN THIS ISSUE: Jobs, Employer Health Costs, Estate Taxes, Retail Retrenching, Legal Trends, Infrastructure Spending

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I am a strong believer border security, keeping track of work and student visas, etc but do you think that deportation of illegal immigrants is a waste of money?

-- Dingobiscuit

Employers Face New Immigrant Hiring Rules

Four months after a federal court put a hold on an attempt to crack down on employers, the Bush administration is ready to try again.

By Ted Reinert, Intern, The Kiplinger Letter

February 22, 2008

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Employers are bracing for new hiring rules aimed at illegal immigrants. Within a matter of days, the Department of Homeland Security will likely offer up a new proposal to help firms verify the legal status of their workers and punish companies that don't go along. This will be the administration's second try at a crackdown on employers who violate existing laws. Rules announced last May were blocked by a federal court before they could take effect. The court effectively agreed with employers and unions that the regulations were unworkable and unfair.

The new rules will preserve the goal -- to discourage firms from looking the other way when questionable papers are presented with employment applications. Businesses that fail to take steps to verify Social Security numbers and other data will be subject to fines and even criminal penalties for repeated and willful wrongdoing. Criminal penalties could include fines of up to $3000 per worker and up to six months in prison.

The government will contact companies if a significant number of their workers have filed Social Security numbers that don't match up with government records. Firms and employees will have to resolve the discrepancy, or the business will have to fire the worker. The new regs will be more lenient than those originally announced, allowing 180 days rather than 90 for employers and workers to investigate problems after receiving so-called "no-match" letters about Social Security numbers.

In issuing the rules, the Department of Homeland Security will argue that it has now met the court's conditions, including the completion of a study on the cost of compliance for employers, especially small businesses. The department has also filed a brief in its appeal seeking to overturn the court ruling but is not likely to prevail on that front.

Employer groups are waiting nervously for the new rules. The administration consulted them, and they hope their advice will be apparent when the regulations are issued. They're pleased with the additional time for checks, but employers still worry about the accuracy of the government database used to check Social Security numbers. They want a promise that they won't be held liable for hiring illegal employees as long as they have followed the proscribed procedure.

"There's got to be adequate time to correct errors for both the employer and the employee," says Randy Johnson, the U.S. Chamber of Commerce's vice president for Labor, Immigration and Employee Benefits and a founder of the Essential Worker Immigration Coalition. He said there must be as close to an "absolute safe harbor" as possible for employers who cooperate with the rule.

A 30-day comment period on the revised rules is expected once they're released and before they're made final.

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POSTED BY: Joseph J Honick (February 22, 2008 09:09 AM)
The madness that has gripped the undocumented issue would be incredible if one did not simply look to where the furor comes from, especially the one hook journalism of Lou Dobbs who does not run a business but does extremely well as an employee, documented we are sure. In this mad rush to legislation, one would also hope that it would be matter of legal requirement for all members of the Congress,the White House and cabinet members, too, to sign a document affirming they do not and will employee undocumented folks, even to mow their lawns, work their farms or wash their cars. Then, given the neurotic need to prove everyone sexually faithful, perhaps a fidelity clause could be written into that document as well. While I do not support Sen. McCain's presidential bid, he is the only one who has come up with a workable plan for this difficult situaton: a guest worker arrangement where all must be registered, pay fines for illegal work and be deported if guilty of crimes. Finally, not one of the gasbag commentators on the subject has said a word about illegals, tens of thousands of them, who are Caucasian from all over Europe and elsewhere. Why do you think that is?

POSTED BY: doug d (February 22, 2008 01:01 PM)
Finally perhaps Jorge Bush will do something positive for this country. As people continue to lose jobs and the economy sours it will be great to remove the illegal workers frmo the economy and pressure companies to pay living wages. because I am so tired of hearing that they do jobs Americans dont want. My father company was forced out of the construction business by competitors here in FL using illegal labor at $8 per hour cash while he paid his men $13 per hour. Wake up America!

POSTED BY: Veteran (February 22, 2008 03:01 PM)
Breaking the law for profit is called crime. Elected officials and law enforcement who look the other way are called corrupt. Smokescreens and denying the facts is called lying. Using legal residents tax money to pay for it is called stealing. Slipping into the country ahead of others obeying the law is called cheating. I could go on and on but I think these definitions pretty well sum up the illegal immigration problem. Building a wall along the border is a pointless waste of money. Prosecute the businesses who hire illegals. Cut off the jobs and welfare for non U.S. citizens and most of them will go home. It makes me sick to think that my Grandfathers, my Father, and I served and defended this country, only to watch it rotting from within and be conquered by those who only pledge allegiance to greed and profit.

POSTED BY: Ellen (February 22, 2008 03:30 PM)
I don't know what planet or city Joseph lives in, but it must not be a border city. My late husband was a heavy equipment operator and he went through much agony over all the illegals on the jobs and how many Americans were being put out of their jobs because the law of the land has been ignored by our Federal government and our local sanctuary cities. I don't care where they came from (95% from Mexico here), they all need to get the hell out of our country.

POSTED BY: howard (February 22, 2008 04:52 PM)
I can hardly believe that the feds are actually going to do something. It probably won't work and be declared broken next year. That is why states will have to address this issue. Feds have already been bought by big business and really aren't interested in anything but amnesty. Call your state reps and start demanding they do something about illegal immigration. If you don't stand up for your rights and your country, who will, the politicians?

POSTED BY: J Gray (February 22, 2008 05:46 PM)
Great. Another immigration fix that does not address the massive H1B shrinkage for legal, highly-skilled immigrants. Good luck at keeping up technologically with the rest of the world without them.

POSTED BY: Tom Thorn (February 22, 2008 06:53 PM)
You forget, Lou was an employer. He was President of a dot-com business. Don't you remember him flying a bi-plane or something really stupid in his advertisement. I can't remember why he left that fine position. Perhaps he couldn't cut it in the real (?) world.

POSTED BY: Hank (February 23, 2008 07:06 PM)
Joseph's comments, while obviously angry, are also deceptive. The new rules on employer verification will impact the employers of European illegals, just as much as employers of South and Central American and Mexican illegals, AND RIGHTLY SO. How does Joseph feel about the HB-1 visa LEGAL immigration, with the frequent fraudulent non-compliance by large, contracting, U.S. employers (GE, State Farm, etc.) and their sub-contracting Indian and other companies? How does he feel about the vastly increased legal immigration permitted (at the expense of U.S. CITIZEN employees), in the last thirty years? Joseph has a big-business employer bias, most apparently. Let us disregard his comments.

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