On August 15, 2007, Department of Homeland Security published its final "No-Match" regulation, entitled "Safe Harbor Procedures for Employers Who Receive a No- Match Letter," which was scheduled to become effective on September 14, 2007. However, a temporary restraining order issued by a district court in California has delayed this effective date and brought to the forefront the controversy of DHS’ authority to regulate in Social Security territory.
By way of background, employers annually send 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, SSA sends a letter that informs the employer of this fact (called the no-match letter). There are many causes for such a no-match, including clerical error, but another cause could be the submission of information for a worker who provided a false social security number or a social security number assigned to someone else. SSA clearly states that employers should not use this no-match letter to take any adverse action against employees and that doing so could violate state and federal law. Still, DHS would like to view the no-match letter as constructive knowledge of employing unauthorized workers.
In the final rule, DHS expands the definition of "constructive knowledge" and adds three situations under which an employer will be deemed to know that an employee is unauthorized to work:
- an employee’s request for the employer’s sponsorship of the employee for a labor certification or visa petition;
- receipt of a no-match letter from the SSA; and
- receipt of a document discrepancy notice from DHS (usually after an I-9 audit).
The regulation also creates a new procedure that employers must follow after receiving a no-match letter from the SSA or a document discrepancy letter from DHS. If an employer follows the steps required by the rule, then the employer will receive "safe harbor" from any claims that the employer had constructive knowledge of the employee’s ineligibility to work. Further, DHS takes the position that employers who follow these steps in a uniform manner will not be considered in violation of state and federal laws relating to document abuse and/or unlawful discrimination on the basis of national origin and citizenship status.
However, in the real world, employers will find it a challenge to meet the requirements of this regulation while at the same time avoid claims of discrimination.
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