The Department of Homeland Security (DHS) recently rescinded the 2007 No-Match Rule, announcing that it will re-focus its resources on developing and implementing work authorization verification programs, such as E-Verify. Last week the U.S. District Court of Maryland upheld the E-Verify program for federal contractors, which will now become effective Sept. 8, 2009. This advisory provides a brief summary of these two recent developments. Specific questions or concerns regarding this advisory or other related issues can be directed to the attorneys of Davis Wright Tremaine’s immigration and employment practices.

DHS rescinds No-Match Rule

On Aug. 19, 2009, DHS published a proposed rule rescinding the No-Match Rule, which provided a safe harbor for employers in responding to no-match letters from the Social Security Administration (SSA). Originally promulgated in August 2007, implementation of the No-Match Rule was enjoined by the U.S. District Court for the Northern District of California in October 2007.

Since that time, it was uncertain if and when the rule would be implemented. It is clear now that implementation of the rule, or any variation thereof, will no longer be pursued under the Obama administration. In rescinding the rule on Aug. 19, 2009, DHS announced that it will instead focus its resources on increased enforcement and community outreach efforts to improve work authorization verification by employers, including increasing employer participation in the E-Verify and IMAGE programs.

Employers should continue to follow the instructions set forth in the no-match letters and should not follow the steps outlined in the rescinded No-Match Rule. In most situations, it is not necessary or advisable to terminate employees who cannot resolve the discrepancy identified in the no-match letter, unless the employer has actual knowledge that an employee is not authorized to work (i.e., the employee confesses to being illegal in response to a no-match letter) or constructive knowledge based on other evidence demonstrating that under the circumstances, the employer should have known that the employee did not have work authorization. The mere receipt of an SSA no-match letter does not constitute constructive knowledge.

Employers who are concerned about unknowingly employing illegal workers may want to consider participating in the E-Verify program. E-Verify, however, is only mandatory for certain companies in select states or that have contracts with the federal government. Because the program imposes stringent procedural rules on a company’s work authorization verification process, companies interested in E-Verify should consult with Davis Wright Tremaine’s immigration or employment attorneys before enrolling.

E-Verify will be mandatory for federal contractors on Sept. 8, 2009

The U.S. District Court of Maryland recently upheld Executive Order 12989, mandating the use of E-Verify by any business that accepts a federal contract with a period of performance longer than 120 days and a value above $100,000. Executive Order 12989 was originally set to be effective on Jan. 15, 2009, but was delayed following the filing of this lawsuit. Unless an appeal is filed, the Order will become effective on Sept. 8, 2009. The Obama administration has announced its support for Executive Order 12989 and its intention to push ahead with full implementation of the rule on Sept. 8.

Companies with federal contracts that fall within this mandate will be required to use E-Verify on (i) all new hires that perform work within the United States during the contract term; and (ii) all existing employees that are assigned to perform work within the United States on the federal contract. If your company has not yet enrolled in E-Verify, you will have 30 days from the date of the contract award to enroll and 90 days from the date you enroll to initiate verification queries for existing employees who will be working on the contract and all new hires, whether or not they are employees assigned to the contract. After this 90-day phase-in period, you will be required to initiate verification of each newly hired employee within three business days after their start date. Companies may end their participation in E-Verify any time after the federal contract expires.