The Immigration Reform and Control Act of 1986 ("IRCA") regulates those who are authorized to work in the United States. Under IRCA, it is illegal to knowingly hire an illegal alien. To satisfy IRCA's requirements, an employer must verify the identity and employment eligibility of anyone to be hired by filling out an Employment Eligibility Verification Form ("I-9 Form"). In order to complete the I-9 Form, the employee must, within three days of hire, present to the employer original documents demonstrating that he or she is authorized to work in the United States. Employers must accept documents that appear on their face to be authentic and relate to the individual.

The Department of Homeland Security ("DHS") recently published its finalized regulations entitled "Safe Harbor Procedures for Employers Who Receive a No-Match Letter." The Social Security Administration ("the SSA") is required to send no-match letters to employers notifying them that the employee information submitted to it by the employer does not match the agency's own records. The new regulations outline a series of steps that employers should take in response to receiving a no-match letter, and states that employers that fail to take these steps can be imputed with "constructive knowledge" that the employee does not have proper employment authorization. Employers who are "knowingly" employing individuals without proper authorization are subject to criminal penalties and civil sanctions up to $10,000 for each unauthorized employee. The new regulations take effect on Sept. 14, 2007.

Summary of New Regulations

The new regulations allow Immigration and Customs Enforcement ("ICE") to use receipt of a no-match letter as evidence that the employer has "constructive knowledge" that the employee is unauthorized to work. Employers who follow the steps laid out in the regulation are entitled to a "safe harbor" and will not be found to have constructive knowledge, even if the employee in question is later found to be an undocumented alien.

The Safe Harbor Procedures

Upon receipt of a no-match letter, employers should take the following steps:

  1. Within 30 days of receipt of the letter, the employer should check its records to ensure that the discrepancy is not a typographical, transcription or similar clerical error. If the employer discovers such an error, it must inform the SSA and verify that the corrected information matches the agency records. Employers should document all efforts to resolve and verify the discrepancy.
  2. If the employer determines that the discrepancy is not due to an error in its own records, it must promptly request the employee to confirm that the name and social security number in the employer's records are correct. If the employee identifies a mistake in the employer's records, the employer should contact the SSA and verify that the corrected information matches the agency records. The employer should continue to document each step taken.
  3. If the employee confirms that the employer's records are accurate, the employer should request the employee to resolve the discrepancy with SSA. The employee must be advised to resolve the discrepancy within 90 days of the date the employer received the no-match letter.
  4. If the discrepancy has not been resolved within 90 days of receipt of the notification, the employer has until the 93rd day to complete a new I-9 Form for the employee. In completing the new I-9 Form, the employer may not use documents containing the disputed social security number. In addition, the employee, to establish identity or both identity and employment authorization, must now present a document that contains a photograph. Both the new and original I-9 Forms must be retained.
  5. If the discrepancy is still not resolved, and the employer cannot complete a new I-9 Form using different documents, the employer should terminate the employee or it runs the risk that the DHS will find that it had constructive knowledge that an unauthorized alien was in its employ.

Employers may also use these "safe harbor procedures" after receiving notification from the DHS questioning the validity of an employee's immigration documents. Employers are therefore advised to contact their attorneys upon receipt of such notification from the DHS.

Employers must follow these procedures carefully to benefit from the "safe harbor." Additionally, employers must apply these procedures uniformly to all employees or risk unlawful discrimination claims on the basis of nationality or citizenship status. Employers can best protect themselves by waiting until all the procedures are complete before taking an adverse employment action against an employee whose records do not match. However, if, at any time, an employer becomes aware that an employee is, in fact, unauthorized to work, and still permits such employee to continue to work, ICE or the DHS could determine the employer had actual knowledge and impose criminal and civil sanctions.

Please be advised that the 2007 SSA no-match letters will start going out to employers in a matter of weeks. Employers may find it difficult to comply with the above "safe harbor procedures," particularly as circumstances vary with each individual employee. If you have any questions concerning the new DHS regulations or how to comply with the "safe harbor procedures," don't hesitate to contact us.