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New immigration rules effective September 14, 2007will require all U.S. employers to resolve Social Security no-match notices. Employers who fail to terminate workers who are unable or unwilling to resolve Social Security discrepancies will face liability exposure for employing unauthorized aliens. This draconian new rule expresses a clear federal policy on what is expected of employers which receive a Social Security Employer Correction Request, commonly known as a “no-match letter.”
 
If fully implemented and enforced, this new rule could lead to the dismissal of hundreds of thousands—and, by some estimates, even millions—of workers, assuming the Social Security Administration (SSA) issues no-match letters on all name and Social Security number discrepancies in its database.
 
No-Match Letters
 
When employers send Social Security information on their employees to the SSA in W-2 earnings reports, SSA matches the names and Social Security numbers with the SSA database. If the name associated with a Social Security number in the SSA database does not match the name submitted by the employer, the agency notifies the employer of the discrepancy by way of a Social Security no-match letter. No-Match letters will be captioned at the top:  “Social Security Administration: Retirement Survivors and Disability Insurance: Employer Correction Request.”
Federal rules had not provided a clear standard for an employer’s responsibility to respond to no-match letters, and many employers have failed to respond at all. In an attempt to compel employers to resolve no-match issues, Immigration and Customs Enforcement (ICE, formerly the INS) published a proposed regulation in June 2006. A final rule has now been issued and will go into effect on Sept. 14, 2007.
 
Opposition to the new rule persists. On Aug. 27, a business coalition that includes the U.S. Chamber of Commerce, the National Restaurant Association, the National Retail Federation and other trade groups asked that the Department of Homeland Security (DHS) and SSA wait at least six months before implementing the new rule. Additionally, various labor and immigrant rights groups may file a lawsuit as soon as Aug. 31 in an attempt to block implementation of this rule. So far, DHS has rebuffed all calls for delaying implementation of the new rule and has indicated its intent to proceed with the Sept. 14 effective date.
 
Expanded Scope of “Constructive Knowledge”
 
Under the Immigration and Nationality Act, employers may not “knowingly” hire or employ any individual who does not have authorization to work in the United States. The term “knowing” is not limited to an employer’s actual knowledge of an employee’s lack of authorization to work. The government can charge an employer with having “constructive knowledge” of an employee’s unauthorized status when the employee’s Employment Eligibility Verification Form (I-9) is missing or improperly completed, simply because the employer failed to comply with hiring regulations governing employment eligibility verification.
 
The new regulation expands the situations under which an employer will be found to have constructive knowledge of illegal employment of unauthorized workers. Under the regulation, if an employer receives a Social Security no-match letter and fails to take timely “reasonable steps”, and the employee identified in the letter is found to lack work authorization, the employer will be deemed to have constructive knowledge of the employee’s unauthorized status.
 
Safe-Harbor Response to No-Match Letters
 
The safe harbor provision of the rule describes “reasonable steps” that an employer can take upon receipt of a Social Security no-match letter, to avoid this finding of constructive knowledge. After receipt of a no-match letter, the employer must take affirmative steps to resolve the discrepancy identified by SSA:
 

  • First, within 30 days after receiving the letter, the employer must check its internal records and transmissions to SSA for clerical errors, such as misspelled names or typographical errors. If clerical errors are discovered, the employer must correct the error, inform SSA of the corrected information, and verify with SSA that the corrected name and/or Social Security number match the information in SSA’s database.
  • If the first step does not resolve the discrepancy, the employer must within that same 30-day period ask the employee to confirm that the name and Social Security number in the employer’s records are correct. If the employee identifies errors, the employer must correct its records and inform SSA of the corrected information. The employee has 90 days from the date the letter was received to respond. 
     
  • If the employee insists that the employer’s records are correct, the employer must ask the employee to deal with SSA directly to resolve the discrepancy. The employee must then return to the employer with evidence that the discrepancy has been resolved. 
     
  • If the employer has resolved the error through its own efforts or with the employee’s cooperation, the employer should follow the instructions in the no-match letter to provide the SSA with an update. The employer must also verify that the error has been corrected by using the Social Security Number Verification Service (SSNVS) and retain a record of the date and time of verification. 
  • If, within 90 days of receipt of the no-match letter the employer has not successfully verified with SSA that the employee’s name matches a valid Social Security number, and that the number is valid for work authorization, the employer would ask the employee to complete a new I-9 for that person to be able to continue his or her employment. The new I-9 must be completed by the 93rd day. If the employee chooses this option, the employer must verify the employee’s eligibility for employment as if the employee is a new hire, with the following restrictions on allowable documents presented: The employee may not present a document containing the same Social Security number that triggered the no-match letter, to establish identity or employment authorization; and the employee may not present a document without a photograph, to establish identity. 

The employer must examine the new documents presented by the employee and determine whether the documents are genuine and establish that the employee is authorized to work in the United States. If the employee is unable to present genuine evidence of employment eligibility within 93 days of receipt of the no-match letter, the employer is required to terminate the employee. Failure to terminate the employee in this situation will expose the company to potential sanctions for employment of an unauthorized worker.
 
Whether any final decision is to accept the employee’s evidence of work authorization or to terminate the employee for failure to resolve the Social Security number discrepancy, it is now important for employers to establish steps for responding to Social Security no-match letters, reflecting the safe harbor rules that go into effect on Sept. 14. It will also be advisable to apply those procedures consistently, and to keep meticulous records on the entire employment eligibility verification process.
 
See the ICE Website for More Info:  “Safe Harbor for Employers Information Center”.

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