U.S. Immigration and Customs Enforcement issued a final regulation on August 10, 2007, describing the requirements for employers when they receive "no-match letters" from the Social Security Administration (SSA) or receive a letter regarding employment verification from the Department of Homeland Security (DHS). Its effective date was 30 days from the issuance of the final regulation. This rule finalizes a June 14, 2006, proposed rule, where the DHS received approximately 5,000 comments from a wide variety of interested parties, including employers, unions, lawyers and advocacy groups.
To date, employers have been confused as to their obligation upon receipt of no-match letters because the DHS and the SSA provided conflicting guidance and there has been considerable debate as to whether receipt of a no match letter creates notice to the employer that the employee is not authorized to work. The new rule provides clarification. The new rule provides "safe harbors" employers can follow to avoid a finding that the employer had constructive knowledge of unauthorized work in the United States. However, it does so in a way that is unfriendly to employers and workers.
The Final Rule requires employers to take reasonable steps in a timely fashion to resolve a discrepancy in a no-match letter. In particular, the rule requires:
1. The employer must check its records within 30 days of receipt of the letter to determine whether the discrepancy is the result of the employer's typographical, transcription or similar clerical error. If there is an error, the employer should correct the error and its records, and inform the appropriate agency - SSA or DHS depending on who issued the letter. The employer should verify with the agency that the new number is correct and internally document the manner, date and time of the verification and keep it with the employee's I-9 form.
2. If the discrepancy is not the result of the employer's error, the employer should request the employee to confirm that the employer's records are correct. If the employee is able to correct the records, the employer should make the correction, inform the relevant agency, verify that the corrected records match the agency records, and make a record of the manner, date and time of the verification and keep it with the employee's I-9 with the agency.
3. If the discrepancy is still not resolved, the employer should request the employee to bring the necessary documents to the appropriate agency to resolve the discrepancy. The discrepancy will be resolved only upon the employer's verification with the SSA that the employee's name matches the Social Security number in SSA's records or that DHS verifies that its records indicate that the immigration status or employment authorization document was assigned to that employee. The employer should make a record of the manner, date and time of the verification and keep it with the employee's I-9. The discrepancy must be resolved within 90 days.
4. If the discrepancy is not resolved within 90 days, the employer must complete a new I-9 form for the employee by the 93rd day. The employer cannot accept any document containing the disputed Social Security number, or alien number or a receipt for a replacement of such a document. In addition, only documents with a photograph may be used to establish identity.
5. If the discrepancy is not resolved and the employee's identity and work authorization are not verified on a new I-9 form using the required documents, the employer must terminate the employee. Failure to terminate may lead to a finding by DHS that the employer had constructive knowledge of the employee's lack of employment authorization.
An employer who follows the safe harbor procedure will be considered to have taken all reasonable steps in response to the notice and the employer's receipt of the written notice will not be used as evidence of constructive knowledge. But, if other independent evidence exists to the contrary, the employer is not protected. Employers face fines of up to $10,000 per worker and incident if they fail to comply with the new rule.
Employers should have a written No-Match Letter Policy incorporating the procedures outlined in the Final Rule. It is very helpful to have such a written policy in place as it is another indicator to the Department of Homeland Security, Immigration and Customs Enforcement that an employer is acting in good faith.
Lawsuit Challenges the New No-Match Regulations - Court Halts Government from Implementing the Regulations
A lawsuit was filed August 29 in the federal District Court of Northern California against DHS and SSA challenging the regulations. Plaintiffs ACLU, National Immigration Law Center, AFL-CIO and others asked for a temporary restraining order and preliminary injunction against implementation of the regulations. The lawsuit contends that because the Social Security database is full of errors, the rules would lead to mass firings of workers who are U.S. citizens and to discrimination against employees who look or sound foreign.
An order was entered on August 31 temporarily blocking the government from implementing the rule. The judge's order also stopped the SSA from beginning to send notices on Tuesday, September 4, to approximately 140,000 employers across the country notifying them of the new rule, which would impact approximately eight million workers. The judge found that the lawsuit raised serious questions as to whether the new rule is inconsistent with the statute and beyond the statutory authority of DHS and SSA. The court found that the balance of hardships tips sharply in favor of staying the rule while it is being challenged.
A hearing on the request to permanently bar the implementation is scheduled for October 1. Business associations also have expressed concerns about the regulations and the accuracy of the Social Security database. Dozens of business groups, including the Associated General Contractors of America and the National Restaurant Association, sent a letter to DHS and SSA on August 27 asking the Social Security commissioner to delay implementation for six months.