The U.S. District Court for the Northern District of California has granted a Department of Homeland Security (DHS) motion which will stay proceedings until March 1, 2008, to permit DHS to undertake a new rulemaking effort that will address the court's concerns with its regulation on Social Security Administration (SSA) no-match letters. In its motion, DHS indicated that it expects to complete the rulemaking proceedings by March 2008.

The current rule was to take effect on September 14, 2007. However, on October 10, 2007, the federal district court for the Northern District of California granted a preliminary injunction, blocking implementation of the rule. As currently written, the rule would affect millions of employees. In granting the preliminary injunction in October, the court determined that the plaintiffs, which included both unions and business groups, had raised sufficient concerns regarding the no-match process such that injunctive relief was appropriate to prevent irreparable harm. These concerns include the possible termination of lawfully employed workers based on incorrect SSA records. The court further held that the threat of criminal prosecution included in the no-match rule's "safe harbor" provision reflects a major change in DHS policy, and that DHS failed to follow mandated administrative requirements to effect the change. The recent motion filed by DHS requested additional time to undertake a rulemaking effort that would address these concerns.

In the court's decision granting the motion, it confirmed that the preliminary injunction barring DHS from implementing or enforcing the rule will remain in effect at this time.