'No Match Letters' Are The Subject Of Substantial Controversy

Law Talk

Sam K. Abdulaziz
Attorney at Law

As all employers should know, when hiring a new employee you must have the employee fill in an I-9 form issued by the Federal Government, and employer thereafter files W-2 forms each year with the Social Security Administration. According to the U.S. Immigrations and Customs Enforcement Agency (ICE), as many as 4% of the 250 million wage reports that are received by the Social Security Administration ("SSA") do not match the Social Security's Administration records.

When this occurs, the Social Security Administration issues a letter which is known as a "no match" letter to the employer, stating that the name or corresponding social security account number submitted for certain employees do not match the agency's records. Similarly, no-match letters are sometimes also issued by the Department of Homeland Security ("DHS"), notifying the employer that the immigration-status or employment-authorization documentation presented or referenced by the employee is not consistent with the Department of Homeland Security's records.

The Department of Homeland Security had enacted a new regulation, in which some have argued would result in the termination of employees whose Social Security Administration discrepancies were not resolved within 93 days of the receipt of a no-match letter. The effect of the new regulation was a finding that if an employer did not respond to a "no-match" letter, the Department of Homeland Security could conclude that the employer had "constructive knowledge" the employee was not authorized to be in the U.S. and they might then prosecute the employer accordingly.

A Federal Court issued a preliminary order stopping enforcement of the new Rule, which the court found could result in irreparable harm to the innocent workers and employers. The AFL-CIO, among others, filed a Federal lawsuit in the Northern District of California, seeking to prevent the government from enforcing the new regulation. The Union argued that the "no match" letter will serve to undermine all workers' labor rights, and that the majority of these letters are based on error-filled Social Security Administration records. The Department of Homeland Security suggests that the new regulation merely reiterates that employers should remain accountable for the workers they hire, and it clarifies the steps employers should take to resolve mismatches identified in the letters issued by the Social Security Administration. According to ICE, there are other reasons for a mismatch between the employer and the SSA records, including transposition errors and name changes following marriage that are not reported to SSA. Employers are told not to assume that the mismatch is the result of any wrongdoing on the part of the employee, but it was argued before the Federal Court that employers out of fear from being prosecuted would nevertheless terminate employees who could not reconcile problems with their Social Security or other employment information.

The DHS regulations specify the following steps that employers should take upon receipt of a no match letter: 1) verify within 30 days that the mismatch was not a result of a record-keeping error on the employer's part; 2) request that the employee confirm the accuracy of the employment records; 3) ask the employee to resolve the issue with SSA; 4) if these steps lead to the resolution of the problem, follow the instructions on the no match letter itself to correct the information with SSA and retain a copy of the verification with SSA; and 5) where the information cannot be corrected, complete a new I-9 form without using the questionable social security number and instead using approved documentation presented by the employee that conforms with the I-9 document identity requirements, including a photograph and other biographic data. ICE advises that, "Employers unable to confirm employment through these procedures risk liability for violating the law by knowingly continuing to employ unauthorized persons. The word "knowingly" is the problem with the regulation. Unfortunately, if the employer cannot resolve any record keeping discrepancies, then the employer will then have a "catch-22" by having to either terminate the employee, or, face the risk that DHS will find the employer had constructive knowledge that the employee was unauthorized to work, which means that the employer will be violating the law and could be prosecuted.

The latest ruling from the Federal Court came down on October 10, 2007. This halted enforcement of the new regulation. As we know more, we will report the decision of the Federal Court. If in doubt, before terminating any employee, you should discuss that action with a lawyer practicing employment litigation to avoid any potential liability on your part.