U.S. employers annually send the Social Security Administration (SSA) millions of earnings reports (W-2 Forms) in which the combination of employee name and social security number does not match SSA records. In some of these cases (specifically, situations where a company has more than 10 workers whose names/numbers do not match and those workers represent at least one-half of one percent of the company’s workforce), the SSA sends a letter that informs the employer of this fact. The letter is commonly referred to as a “no-match letter.” Another federal agency, Immigration and Customs Enforcement (ICE), sends out a similar letter when it is unable to confirm that an immigration-status document or employment-authorization document referenced by an employee completing a Form I-9 was actually assigned to that person. The receipt of a no-match letter raises issues about whether the employee who is the subject of the letter is authorized to work in the United States. On August 10, 2007, the Department of Homeland Security (DHS) issued final regulations addressing the legal obligations of employers once they receive a no-match letter from the SSA or ICE.

DHS Regulations on No-Match Letters

Under current immigration law, it is unlawful (and punishable by a fine of up to $10,000 per worker) to continue to employ an alien worker once the employer knows the worker is undocumented. The new regulations explicitly state what the courts have already confirmed: “constructive knowledge” of a worker’s undocumented status is sufficient for liability. An employer that continues to employ a worker who is the subject of a no-match letter may be charged with constructive knowledge of the worker’s undocumented status – that is, the employer should have known from available facts and the exercise of reasonable care that the employee was not eligible to work in the United States. The new regulations, however, outline procedures employers may follow to avoid liability once they have received a no-match letter. An employer following these procedures is given a “safe harbor” period of up to 93 days to determine whether an employee named in a no-match letter is, in fact, an undocumented alien and to take appropriate action.

Once an employer has received a no-match letter from the SSA, the DHS regulations describe the following as “reasonable steps” the employer should take to clear up any discrepancies:

  1. Check records promptly after receiving a no-match letter to determine whether the discrepancy results from a typographical or clerical error in the employer's records or in its communication to the SSA. If there is such an error, the employer should correct its records, inform the SSA, and verify that the name and number, as corrected, match agency records -- in other words, verify with the SSA that the discrepancy has been resolved. DHS considers an employer to have acted promptly if the employer took such steps within 30 days of receipt of the no-match letter.
  2. If this does not resolve the discrepancy, the employer should promptly request that the employee confirm that the employer's records are correct. If the records are not correct according to the employee, the employer should correct them, inform the SSA, and verify the corrected records with that agency within 30 days of receipt of the no-match letter. If the records are correct according to the employee, the employer should ask the employee to pursue the matter personally with the SSA. The employer must inform the employee of the date on which it received the no-match letter and advise the employee to resolve the discrepancy with the SSA within 90 days of that date.
  3. If the discrepancy has not been resolved within 90 days of receiving the letter, e.g., because the employee did not pursue the matter with SSA or could not provide matching information, the employer must have the employee complete a new Form I-9 by day 93. However, in completing the new Form I-9, the employee cannot rely on (a) any document without a photograph to establish his/her identity or authorization to work, (b) any document containing the social security number that was the subject of the no-match letter, (c) any document referenced in the no-match letter, or (d) any receipt for an application for a replacement of a document containing the disputed social security number. The employer must retain the original Form I-9 as well as the newly completed one.
  4. If the employer does not obtain a new Form I-9 within 93 days but nevertheless continues the employee’s employment, the employer faces the risk that DHS may find that the employer had constructive knowledge that the employee was not authorized to work in the United States.

The new DHS regulations also establish procedures for employers to follow when they receive a no-match letter from ICE. After receiving an ICE notice of a discrepancy in an immigration-status or employment-authorization document used in completing a Form I-9, the employer should, within 30 days, contact a local DHS office and attempt to resolve the problem with the document referenced in the no-match letter. If, within 90 days after receipt of the no-match letter, the employer is unable to verify with DHS that the disputed document is assigned to the employee, the employer must have the employee complete a new Form I-9 no later than 93 days after receipt of the no-match letter. In completing the new Form I-9, the employee is subject to the same restrictions that apply to the completion of a new Form I-9 in response to a no-match letter from the SSA. If the employee is unable to complete a new Form I-9, continuing the employee’s employment would create a risk of liability for knowingly employing an undocumented worker.

Employers should keep a written record of these efforts and should document the fact that they have verified resolution of any discrepancy with the relevant agency (since the agency itself may not keep such records). Employers may verify a social security number with the SSA by telephoning toll-free 1-800-772-6270, weekdays from 7 a.m. to 7 p.m. EST. Finally, employers should remember to apply any verification procedures uniformly to avoid claims of discrimination.

Practical Implications

The new DHS regulations create a window period of up to 93 days during which an employer may attempt to resolve a work-authorization issue disclosed in a no-match letter without exposing itself to liability for knowingly employing an undocumented alien based on constructive knowledge stemming from the no-match letter. Employers would be wise to follow the procedures set forth in the new regulations when this situation arises. To forego these procedures and simply discharge the employee based on the no-match letter may expose the employer to national origin or citizenship discrimination claims if the employee is, in fact, legally authorized to work for the employer.