After two years of controversy and litigation, the U.S. Department of Homeland Security (DHS) announced on October 7, 2009 that it is rescinding a 2007 rule addressing so-called “no-match letters” from the federal government that call the employment eligibility of certain employees into question.
The 2007 “No Match” Rule
A no-match letter is a notice to an employer from the Social Security Administration (SSA) indicating that an employee’s name and social security number submitted to the SSA by the employer do not match the agency’s records or a notice from the Immigration and Customs Enforcement office (ICE) indicating that it cannot verify an immigration-status document or an employment-authorization document referenced by an employee on a Form I-9. Because they can stem from situations in which an undocumented alien has used falsified or stolen information to obtain employment, no-match letters are relevant to an employer’s obligations under the federal Immigration and Nationality Act, which prohibits employers from hiring undocumented aliens or retaining them in employment when the employer knows the aliens are not legally authorized to work in the United States. In 2007, DHS issued a rule declaring that such knowledge can be imputed to an employer that receives a no-match letter concerning an employee and fails to take reasonable steps to determine whether the employee is actually authorized to work in the United States. The 2007 rule, supplemented in 2008, effectively put employers at risk of prosecution for knowingly employing undocumented aliens with respect to whom no-match letters had been issued unless they followed the rule’s “safe harbor” procedure that allowed employers to continue employing the affected employees for up to ninety-three days while specified efforts were being made to resolve the discrepancies identified in the no-match letters.
The Withdrawal of the “No Match” Rule
The DHS “no match” rule generated considerable controversy. Pointing out that no-match letters are often triggered by such benign factors as clerical errors and name changes that had not been reported to the SSA, opponents of the rule argued that the threat of prosecution it posed would discourage employers from hiring anyone who appeared “foreign” and would result in the discharge of U.S. citizens and aliens lawfully authorized to work in the United States. A federal court enjoined the enforcement of the no-match rule, and despite DHS’s attempt to clarify its position in a 2008 supplement to the rule, the no-match rule never went into effect. The rule has, however, remained on the books, but that situation is about to change.
In a final rule published in the October 7, 2009 Federal Register, DHS announced that it is rescinding the 2007 no-match rule and its 2008 supplement. Under the new final rule, the receipt of a no-match letter is no longer expressly mentioned as a situation that will justify the conclusion that the employer had constructive knowledge of an employee’s lack of eligibility to work in the United States. All references to the “safe harbor” procedure described in the 2007 rule are also being eliminated. The new final rule, which goes into effect on December 7, 2009, continues to state, however, that an employer’s constructive knowledge of an individual’s lack of legal eligibility to work in the United States can be sufficient to impose liability under the Immigration and Nationality Act for employing an illegal alien. In comments published with the final rule, DHS stated that such constructive knowledge can be inferred from the totality of the circumstances relating to a particular employee and that an employer’s failure to take reasonable steps to verify an employee’s employment eligibility after the employer receives a no-match letter about the employee is a factor that may be considered in determining whether the employer had constructive knowledge of the employee’s status as an undocumented alien.
Under the 2007 DHS “no match” rule, the mere receipt of a no-match letter about an employee who was, in fact, an undocumented alien would have been sufficient to establish the requisite knowledge of undocumented status for employer liability under the Immigration and Nationality Act if the employer continued to employ the individual without following the specific procedures set forth in the rule. The withdrawal of the “no match” rule greatly reduces the threat of prosecution for employing an undocumented alien after the receipt of a no-match letter, but some legal vulnerability remains. In appropriate circumstances, an employer’s failure to take reasonable steps to verify an employee’s employment eligibility after receiving a no-match letter regarding the employee can be a factor supporting the conclusion that the employer had actual or constructive knowledge that the employee was not legally authorized to work in the United States. Thus, the receipt of a no-match letter concerning an employee should trigger an immediate investigation by the employer.
As an initial step, the employer should compare the information in the no-match letter with information in the employer’s records to determine whether the letter is the result of a clerical error. If a clerical error is discovered, it should be reported to the SSA or the ICE immediately. If no clerical error is detected, the employer should advise the affected employee that he or she should contact the SSA or the ICE to attempt to resolve the matter. The employer should give the employee a reasonable period of time to resolve the issue and should require the employee to report the status of the situation to the employer as it develops. If the employee does not resolve the dispute within a reasonable period of time, the employer should contact legal counsel to discuss its options with respect to the continued employment of the employee.