U.S. Immigration and Customs Enforcement (“ICE”) is beefing up its response to employers who receive a “no-match letter” from the Social Security Administration (“SSA”) concerning an employee. The new regulations, entitled Safe- Harbor Procedures for Employers who receive a No-Match Letter” were originally scheduled to be effective on September 14, 2007. On August 31, 2007, a federal court in California issued a temporary restraining order against DHS barring it from implementing the final regulations. Following a hearing on the issue on October 1, the judge extended the temporary retraining order pending his ruling, which is expected in mid-October.

The SSA issues a no-match letter to an employer when an employee’s Social Security information does not match the SSA’s information. Such a letter is no longer informational, but rather evidence of a possible violation of immigration law. Under this rule, employers can expect to receive general notices from the Department of Homeland Security (“DHS”) outlining their obligations to follow immigration laws and the steps they must take to satisfy the requirements under the rule. (DHS will not have access to information about employers who have received no-match letters.) Compliance with these notices is crucial; noncompliance will be viewed as “constructive knowledge” of an immigration law violation and may be used in future civil or criminal actions brought by DHS against employers.

Two New Examples of Constructive Knowledge

The amended regulation, Control of Employment of Aliens, 8 C.F.R. Part 274a, expands the definition of “knowing” in the Immigration and Nationality Act, 8 U.S.C. § 1324a(a)(2), which states:

It is unlawful for a person or other entity, after hiring an alien for employment in accordance with paragraph (1), to continue to employ the alien in the United States knowing the alien is (or has become) an unauthorized alien with respect to such employment.

“Knowing” was defined as “not only actual knowledge, but also knowledge that may fairly be inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition.” This new amendment adds two more examples of information putting an employer on notice that an employee could be an alien not authorized to work in the United States:

(1) written notice to an employer from SSA, e.g. an “Employer Correction Request,” that the combination of name and Social Security Number submitted for an employee does not match SSA records (a “no-match” letter); and

(2) written notice from DHS that the immigration status document, or employment authorization document, presented or referenced by the employee in completing Form I-9 was assigned to another person, or that there is no agency record that the document was assigned to anyone.

Safe Harbor Procedures for Employers

The regulation also identifi es employers’ obligations after receiving a no-match letter – a safe harbor for employers. If the employer fails to take reasonable steps after receiving such a letter from the SSA or DHS, and the employee is in fact not authorized to work in the United States, the employer may be found to have had constructive knowledge of that fact. Under this new amendment, DHS must continue to review the totality of the relevant circumstances in determining if an employer had constructive knowledge that an employee was an unauthorized alien in a situation described in any of the regulation’s examples.

The following are considered reasonable steps to be taken by employers who receive SSA no-match letters or DHS letters regarding employment verification:

(1) An employer may check its records promptly after receiving the no-match letter to determine whether the discrepancy results from a clerical error in the employer’s records, or in its communication to the SSA or DHS. If there is a clerical error, the employer should inform the relevant agencies, verify the correction with the agencies’ records, and record the manner, date and time of the verifi cation. The time period for a reasonable employer to take such steps is 30 days from receipt of the letter.

(2) If an employer fi nds that a clerical error is not present, the employer should promptly request the employee to confi rm that the employer’s records are correct. If they are not correct, the employer should take action to correct them, i.e., inform the relevant agencies in accordance with the letter’s instructions, and verify the corrected records with the relevant agencies. If the records are correct according to the employee, the employer should ask the employee to pursue the matter personally with the relevant agencies. A reasonable employer should take such action within 30 days of receipt of the letter.

(3) If the discrepancy in the employee’s record is not resolved within 90 days of receipt of the letter, the employer must verify the information with the SSA or DHS that the employer’s information matches the agencies’ records and that the documentation is correctly assigned to that employee. If the employer cannot verify this information, it must re-verify the employee’s identity and employment authorization by completing a new Form I-9 for the employee. This step should be completed within 93 days of receipt of the letter.

If an employer cannot resolve the discrepancy and the employee’s identity and work authorization cannot be verifi ed, the employer must choose between 1) terminating the employee, or 2) facing the risk that DHS may fi nd that the employer had constructive knowledge that the employee was an unauthorized alien and violated the Immigration and Nationality Act.

Employers should be cautioned not to request more or different documents than are required under the regulation or to refuse to honor documents that on their face reasonably appear to be genuine and relate to the employee. Moreover, the resolution of a discrepancy does not in and of itself demonstrate that an employee is authorized to work in the United States, e.g., an alien presenting a false name and matching false Social Security number. This regulation does not address such fraud.

Finally, all federal employers, under a proposed rule, will have to participate in E-Verify, DHS’s electronic employment verifi cation system. This system has been expanded to allow employers to match photographs provided by employees to photographs that exist in the federal databases. ICE’s new focus on illegal alien employment should make all employers more active when in receipt of a no-match letter. Training or informational sessions for human resources personnel, a system of tracking the status of no-match or DHS letters received, and general employee awareness of this policy are also good preventive measures.