The Department of Homeland Security (DHS) has finalized new regulations that target employers who ignore “no-match” notices issued by either the Social Security Administration (SSA) or DHS. Since employer sanctions became effective in 1987, employers have been subject to civil and even criminal penalties when they are found to have either “actual” or “constructive” knowledge that an employee is not authorized to work in the United States. The new regulations, which will go into effect on September 14, 2007, expand the definition of “constructive knowledge” to include employers who receive “no-match” notices from the SSA or DHS and who fail to act in a timely manner to resolve the apparent discrepancies.
While the rules are complex, they essentially deal with two issues:
1. What an employer must do if it receives a “no-match” letter from SSA. A “no-match” letter is a written notice issued to an employer by SSA advising that the combination of a worker’s name and social security account number do not match SSA’s records.
2. What an employer must do if it receives written notice from DHS that the immigration status or employment-authorization document presented by an employee during the I-9 process was not assigned to the employee, according to DHS records.
An employer who receives either type of communication must follow a “safe harbor” procedure within specified timeframes. If it does not, it may be found to have “constructive knowledge” that the employee was not authorized to work in the United States. That finding may well result in civil and possibly criminal penalties.
Expanded Definition of Constructive Knowledge
Under the regulations, an employer can be found to be in violation of the employer sanctions laws not only if it has “actual” knowledge that an employee is unauthorized to be employed by that employer, but even if it has “constructive knowledge” of that fact. The new rule broadens the definition of “constructive knowledge” to include a failure to take “reasonable steps” after receiving information that the employee may be unauthorized to work. The no-match letter from the SSA and the notice from DHS constitute the kind of information the rule contemplates.
The final rule’s expansion of the definition of “constructive knowledge” also includes situations where an employee who had previously represented himself to be a U.S. citizen or permanent resident later requests employer sponsorship for a visa status or for labor certification for permanent residence. In those cases, the employer has a duty to inquire further to determine whether the employee is indeed work-authorized in light of this new information.
The New 30 and 90 Day Rules
To benefit from the rule’s “safe harbor” provisions, an employer must take the following steps:
1) Within 30 days of receiving a no-match letter from either SSA or DHS, the employer must first determine if the discrepancy was caused by its own mistake (e.g., a misspelling of the worker’s name or a mistake in the way the social security number was recorded by the employer). If the employer finds that its record are inaccurate, it must make the necessary corrections, inform SSA of the correct data, and then verify with SSA that the employee’s name and number, as corrected, match SSA records. The employer should also update the existing I-9 form or complete a new one with the corrected information (while retaining the original form). But it should not perform a new I-9 verification.
2) If the employer believes that its own records are accurate, then within 30 days of receiving the no-match notice, it must ask the employee to confirm that the name and number, as listed in the employer’s records, are indeed accurate. If the employee finds errors and makes corrections to the employer’s information, then the employer must correct its records and so advise SSA, and then verify with SSA that the corrections match SSA records. The employer should also either update or complete a new I-9 form with the corrected information.
3) If the employee advises that the employer’s records are correct, then the employee must be directed to correct the discrepancy with the relevant agency (SSA or DHS) within 90 days. If the employee later advises that a correction has been made (e.g., advising SSA of a change to a married name), the employer must then verify with SSA that the correction has in fact been entered in the SSA database, or confirm with DHS that the authorization document previously in question has now been assigned to that employee. And the employer should then either update or complete a new I-9 form.
Employers may verify a social security number (SSN) with SSA either by telephone (1-800-772-6270) or online (www.ssa.gov/employer/ssnv.htm). Another SSA website describes still other methods for verifying that the SSN and name match: www.ssa.gov/employer/ssnvadditional.htm.
4) If after 90 days the problem is still unresolved, the employer must complete a new I-9 verification within three days (for a total of 93 days from receipt of the no-match notice) and request proof of identity and work authorization other than the SSN or the immigration document previously found by SSA or DHS to be a “no-match.” This step offers the employee one last opportunity to show that he/she is authorized to work.
What Happens at the End of 93 Days?
If within 90 days (plus three days to complete a new I-9 form) the employee is unable to produce new documentation that appears to be genuine and related to the individual, then the employer is faced with a clear choice: Either terminate the employment, or risk being found to have constructive knowledge that it is employing an unauthorized person. The rule further provides that the determination of whether an employer has had constructive knowledge will depend on a totality of the circumstances.
The new regulations make clear that an employer should not terminate a worker sooner than the 93 days unless the employee admits sooner than that that he is unauthorized to work.
This new rule reinforces what we have said many times before, most recently in our April 21, 2006 Client Alert: If an employer receives a no-match letter, it has a duty to inquire further and to give the employee a reasonable period to correct the situation. The new DHS rule now spells out exactly how and when the employer must act in order to secure a “safe harbor” against a finding of constructive knowledge. Failure to follow these procedures may lead to finding that the employer knew that it was employing an unauthorized individual and may well result in civil or criminal penalties.