Contact:

Mike Flagg, NAPEO, (703) 739-8174, mike@napeo.org Edie Clark, NAPEO, (703) 739-8162, edie@napeo.org

Alexandria, Va. (October 11, 2007) — A federal judge temporarily blocked the Department of Homeland Security's plan to crack down on businesses that hire illegal immigrants, but a prominent labor lawyer says small businesses aren't out of the woods yet.

Every year the Social Security Administration sends businesses "no-match" letters when there's a discrepancy between employees' names and their social security numbers. Employers can then ensure the social security taxes employees pay are being credited to the right person.

But Homeland Security wanted employers to use the letters to ferret out illegal workers, although as part of the plan it gave businesses three months and a set of rules to clear up the discrepancy — guidance they hadn't had before.

The court's ruling leaves employers in the same murky situation that the new rules tried to clear up, says an immigration lawyer.

"The court's ruling is not necessarily a victory for employers," said Sean G. Hanagan, a partner at the law firm Jackson Lewis LLP. "There is a real need to clarify an employer's obligations when they receive a 'no-match' letter, and these proposed rules were the government's first attempt. The Social Security Administration will continue to send 'no-match' letters, and without clarifying the rules, the huge uncertainty over how to deal with them stands unresolved.'

In the past, the government has used a business' flagrant disregard of the letters as proof that the business knew, or should have known, that its employees were illegal immigrants.

The court's ruling today was a victory for civil rights groups, unions and business, which contended that Homeland Security was putting too heavy a regulatory load on employers.

"These letters were created to help employees, but the government wanted to use them to put small businesses squarely in the middle over illegal immigration, creating a huge burden," said Milan P. Yager, executive vice president of the National Association of Professional Employer Organizations, or NAPEO. "Congress failed to act on immigration last summer, and now it needs to take up the issue again and make clear rules businesses can live with — or small businesses, their workers and the entire economy will continue to be at risk."

The Jackson Lewis law firm specializes in labor law and is a member of NAPEO (www.napeo.org), the trade association for companies that do human-resource chores for small businesses, such as helping them comply with immigration laws.

To ask Mr. Hanagan what small businesses should do now, call NAPEO public relations to arrange an interview.

NAPEO has more than 370 PEO members found in all 50 states, representing more than 70 percent of the revenues of the $53 billion PEO industry. PEOs enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation. PEO clients focus on their core competencies to maintain and grow their bottom line.