1221 S. MoPac Expy.
Three Barton Skyway
Suite 300
Austin, Texas 78746
Main - (512) 732-8900
 Fax - (512) 732-8905

Page design by
Boulette & Golden
© 2010 all rights reserved

DHS’s Embattled “No-Match” Rule

On August 15, 2007, DHS issued its now abandoned No-Match rule, which addressed an employer’s obligation to respond to Social Security “no match” letters. The Social Security Administration (“SSA”) generates no-match letters when the employee name and Social Security number reported on Form W-2 do not match the SSA’s records. Under the August 15, 2007, rule, if an employer received a no-match letter and failed to take “reasonable steps” in response, and an employee identified in the letter turned out not to be authorized to work, the employer was deemed to have “constructive knowledge” that the employee was unauthorized to work for purposes of the Immigration Reform and Control Act (“IRCA”).

The Temporary Injunction

The DHS No-Match rule was met by a suit by the AFL-CIO, among others. On October 10, 2007, following a temporary restraining order delaying the implementation of the rule, the United States District Court for the Northern District of California restrained the implementation of the August 2007 DHS rule pending trial. The court’s initial temporary restraining order is available here, and the court’s decision to extend the temporary restraining order until the time of trial is available here. Notably, the Social Security Administration (“SSA”) was prepared to send mismatch notices to some 140,000 employers regarding approximately 8,000,000 employees, prior to the entry of the order.

DHS’s “Revised” Rule

On March 26, 2008, DHS responded by publishing a “revised” no match rule, which it then finalized on October 23, 2008, the DHS finalized the “revised” supplemental No-Match rule it published on March 26, 2008. Notably, neither the March 26, 2008, proposed supplemental No-Match rule nor the October 23, 2008, final “revised” supplemental No-Match rule make any substantive change to the original No-Match rule issued way back in August 17, 2007. Compare 73 Fed. Reg. 63,843 (Oct. 28, 2008), 73 Fed. Reg. 15, 945 (Mar. 26, 2008), and 72 Fed. Reg. 45,611 (Aug. 15, 2007).

No Real Change

Rather, the October 23, 2008, final revised supplemental rule attempted to address the stated bases for the October 10, 2007, temporary injunction, all of which were technical in nature (e.g., DHS’s failure to provide a reasoned analysis or Regulatory Flexibility Act analysis in support of the original rule). By addressing these technical grounds without changing the substance of the rule, the DHS hoped to clear the way to implementation of the original August 15, 2007 rule. See October 23, 2008, DHS press release (“The additional information in this supplemental rule addresses the specific items raised by the Court, and we expect to be able to quickly implement it.”) Indeed, on November 6, 2008, based on the “revised” supplemental rule, DHS filed a motion to vacate the injunction barring implementation of the original August 17, 2007, No-Match Rule. Ultimately, however, DHS chose to abandon the rule entirely, effectively conceding the suit to the AFL-CIO.

Safe Harbor

The now abandoned August 15, 2007, rule established a specific series of “safe-harbor” steps an employer may take in response to a no-match letter. If an employer took these steps, the employer is deemed to have taken “reasonable steps” and thus protected from a finding of constructive knowledge on basis of the no-match letter. To take advantage of this safe harbor, the employer was required to:

Within 30 Days of Receipt of the No-Match Letter

FIRST - Check its records. The employer must first check its records to determine if the discrepancy was caused by a clerical error. If it was, then the employer must correct the error with SSA and verify that the corrected name and Social Security number now match the SSA's records. The employer is advised to keep a record of the manner, date, and time of the re-verification with the SSA. The employer may update the employee’s Form I-9 with the corrected information or have the employee complete a new one. In either event, the employer should not re-inspect documents. 8 C.F.R. § 274a.2(b)(l)(2)(i)(A).

SECOND - Promptly check with the employee. If the employer determines that the no-match is not a result of an error in its records, the employer must “promptly” ask the employee to confirm that the name and Social Security account number in its records are accurate. If the information is inaccurate, the employer must correct its records, inform the SSA of the correction, and then verify a match on the corrected information. The employer is advised to keep a record of the manner, date, and time of its re-verification with the SSA. 8 C.F.R. § 274a.2(b)(l)(2)(i)(B).

THIRD - Promptly send the employee to SSA. If the employee confirms that the employer’s information is accurate, the employer must “promptly” advise the employee of the date of receipt of the no-match letter and inform the employee that he or she must resolve the discrepancy with the SSA no later than 90 days after the receipt date of the letter. The employer is not under any legal obligation to advise the employee on how to resolve the discrepancy with the SSA. If the employee resolves the issue, the employer must update its Form I-9 as necessary to reflect any corrected information. 8 C.F.R. § 274a.2(b)(l)(2)(i)(B).

Within 93 Days of Receipt of the No-Match Letter

FOURTH - New Form I-9 within 93 days. If the employee cannot resolve the issue with the SSA within 90 days of the date the employer received the no-match letter, the employer must have the employee complete a new Form I-9 within 93 days of the date the employer received the letter (i.e., within three days of the 90th day following receipt of the letter). When the employee completes the new Form I-9, the employer cannot accept any document that has the no-match Social Security number on it, and the employee must present a document with his or her photograph on it to establish his or her identity (or to establish both identity and authorization to work). If the employee is able to provide such documentation, then the employer keeps the new Form I-9 with the old Form I-9. 8 C.F.R. §§ 274a.2(b)(l)(2)(i)(B), (b)(l)(2)(iii). 

TERMINATION? If the employee has not resolved the issue with the SSA and is not able to complete a new Form I-9 complying with the requirements identified above, the employer must choose between terminating the employee (which brings with it the potential for national origin discrimination claims under Title VII of the Civil Rights Act of 1964 and related state law claims) or risking a “constructive knowledge” finding under the IRCA (if the employee is in fact not to be authorized to work).

DHS Notices and Response to Same

The August 15, 2007, rule also called for the employer to take “reasonable steps” in response to any DHS notice indicating that the immigration status document or employment authorization document presented or referenced by the employee in completing Form I–9 is assigned to another person, or that there is no agency record that the document has been assigned to any person. 8 C.F.R. § 274a.2(b)(l)(1)(iii)(C). 

The “safe harbor” outlined for responding to DHS notice consisted of contacting local DHS office (in accordance with the written notice’s instructions, if any) and attempting to resolve the question raised by the DHS about the immigration status document or employment authorization document within 30 days of the notice. 8 C.F.R. § 274a.2(b)(l)(2)(ii)(A). If the employer could not resolve the matter with DHS within 90 days of receiving the DHS notice, then the employer was required to have the employee complete another Form I-9, following the procedure laid out above in the no-match safe harbor response (i.e., not accepting the suspect document identified in the notice and requiring the employee to present a document bearing his or her photograph to verify identity). 8 C.F.R. § 274a.2(b)(l)(2)(ii)(B).

Other Reasonable Responses

Under the rule, the safe harbor responses outlined for SSA no-match letters and DHS notices were not the exclusive means for responding to information that an employee may not be authorized to work. See 8 C.F.R. §§ 274a.2(b)(l)(2)(i), (ii) (employer is “deemed” to have taken “reasonable steps” if the employer takes the actions outlined in the regulations). Moreover, the rule did not establish “safe harbor” responses for other sources of information indicating that an employee may not be authorized to work (e.g., an employee requests that the employer file labor certification for him or her).

Questions

The foregoing is not intended as legal advice. If you have specific questions regarding a Social Security “no-match” letter, Form I-9, constructive knowledge under the IRCA, or the risks associated with national origin claims under Title VII of the Civil Rights Act of 1964, please contact one of our attorneys.