Earlier this month the U.S. District Court Judge presiding over a lawsuit regarding SSA "No-Match" letters rejected the Department of Homeland Security (DHS)'s request for an accelerated hearing schedule. If the court rules for DHS, DHS could implement its October 23, 2008 supplemental regulation and send out SSA No-Match letters to an estimated 140,000 employers nationwide. "No-Match" letters are issued to employers in response to a identified mismatch between the Social Security Administration (SSA) system data and the information submitted for an employee by an employer. If the DHS regulation is implemented, the receipt of a "No-Match" letter by an employer will place a burden on the employer to resolve the conflicting data, which could result in significant costs to the employer. However, DHS now will have to wait, as the court ruled that it will receive written arguments from the parties through February 24, 2009.

The lawsuit regarding the SSA No-Match letters began in summer 2007 shortly after DHS published its initial No-Match rule. In that rule, DHS outlined a series of steps an employer should take upon receipt of a letter from the Social Security Administration (SSA) stating that the information submitted for an employee does not match SSA records (hence the expression SSA “No-Match” letter), including giving the employer and employee 90 days to resolve the mismatch. However, the original rule was never implemented because of the lawsuit to prevent it. The regulation published in October 2008 contains some additional analysis but little substantial change from the original "No Match" regulation.

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) filed a lawsuit against DHS, claiming that the original No-Match rule is inconsistent with current federal law and would result in irreparable harm to workers and employers if implemented. In August 2007, a federal judge in California granted a temporary injunction preventing the regulation from taking effect. In its recent request to the court, DHS has asked the court to lift the injunction, which would permit DHS to implement the No-Match regulation. However, the court's decision will not come before the next administration takes office, and the court noted that President-Elect Obama may want to re-examine the whole No-Match letter issue.