On August 19, 2009, the U.S. Department of Homeland Security (DHS) issued a proposed rule to rescind its no-match rule. DHS issued the final no-match rule in August 2007, but it has not gone into effect because a court has blocked its enforcement. Under federal immigration law, employers may not employ or continue to employ employees they know or reasonably should know are not authorized to work in the United States. The "reasonably should know" standard is known as constructive knowledge.

For years, the Social Security Administration (SSA) has sent letters to employers stating some employee names and social security numbers the employer has submitted to SSA do not match SSA records. These letters are known as no-match letters. Before DHS issued its no-match rule, employers wondered whether receipt of a no-match letter constituted constructive knowledge by an employer that an employee was not authorized to work in the United States. The general consensus was that the employer should first check its own records, and if that did not resolve the discrepancy, it should ask the employee to obtain documentation from SSA resolving the discrepancy.

DHS's no-match rule provides that receipt of a no-match letter constitutes constructive knowledge and sets forth particular steps employers must take within particular timeframes after receiving no-match letters in order to obtain a safe harbor from DHS enforcement. However, this rule was challenged in the courts. While the issue was before the courts, SSA refrained from sending out no-match letters.

DHS has now decided to withdraw the proposed rule and rely on other enforcement tools. If DHS rescinds the no-match rule, it is unclear whether SSA will recommence sending out no-match letters. If SSA does begin sending out no-match letters again, it will mean the state of the law as it existed before the no-match rule will be in effect again, which, as discussed above, was unclear. Because the law is not well-established, employers are advised to consult with counsel upon receiving no-match letters.