On August 19, 2009, Department of Homeland Security (DHS) announced the proposed rescission of the “Safe-Harbor” rule for employers who have received “no-match” letters from the Social Security Administration (SSA). When SSA receives a report from an employer in which the combination of employee name and social security number do not match SSA records, the agency informs the employer by sending an “Employer Correction Request,” commonly known as a “nomatch” letter.

On August 15, 2007 DHS published a final rule describing the legal obligations of employers who receive “no-match” letters and a safe-harbor from enforcement for employers who follow the rule. On August 29, 2007 the AFL-CIO and others brought an action in federal court to enjoin the implementation of the safe-harbor rule. On October 10, 2007, the court granted the plaintiffs’ motion for preliminary injunction. Implementation of the rule remains enjoined to date.

The new DHS Secretary, Janet Napolitano, has now had an opportunity to review the enjoined rule and has decided to propose its rescission. According to the proposed rule, DHS’ efforts to reduce the employment of unauthorized workers will continue through programs such as E-Verify and IMAGE (ICE Mutual Agreement with Government and Employers), which, according to the agency, have proven to be more efficacious methods of reducing the employment of unauthorized workers and reducing the use of fraudulent identity documents by employees than follow up of the “no-match” letters.

Proposing to rescind the Safe Harbor Procedures reaffirms DHS’ efforts to target the root of the problem, steering employers away from hiring practices that allow for the use of fraudulent identity documents. With the proposed rescission of the Safe Harbor Procedures, DHS is refocusing attention from single, individual discrepancies to targeting employers’ hiring and management practices, particularly for those employers who knowingly recruit and/or hire unauthorized aliens to gain a financial advantage over compliant competitors.

Public comments on the proposed rule must be submitted no later than September 18, 2009.