The New Immigration and Customs Enforcement Rule on Social Security No-Match Letters and Department of Homeland Security Letters

Note: The Social Security No-Match Rule has been the subject of significant litigation as discussed in our News Updates section. Since September 2007, the rule has been suspended under various injunctions and is not currently in effect. Our office is carefully monitoring developments - keep watching our front page for the latest information.

Q: What does this rule do?

A: The new rule does two main things. First, it expands the definition of an employer's "constructive knowledge" that an employee is not authorized to accept employment (situations where an employer is legally presumed to know that the employee isn't authorized to work, regardless of whether or not the employer actually knew).

Also, the new rule provides the employer with a "Safe Harbor" in the event it receives a Social Security Administration("SSA") No-Match letter or Department of Homeland Security ("DHS") correspondence indicating that work authorization documentation presented is invalid. The Safe Harbor amount to a set of procedures which the employer can follow when they receive an SSA No-Match letter or DHS communication in order to avoid a later finding that one of these letters gave them constructive knowledge that an employee.

Q: What are these new situations where the employer can be found to have constructive knowledge that an employee is unauthorized to accept employment?

A: The three situations are:

• Where an employee asks an employer for sponsorship for a labor certification or visa petition (in other words, this request by an employee to an employer by itself may be construed as constructive knowledge);
• Receipt of a no-match letter from the Social Security Administration ("SSA"); and
• Receipt of a notice from the Department of Homeland Security ("DHS") that the employee's employment authorization documents presented in connection with completion of an I-9 form do not match DHS records (this usually happens right after an I-9 audit).

Q: What can an employer do to avoid a finding of constructive knowledge in these situations?

A: The rule also establishes "Safe Harbor" procedures for employers - procedures which employers must follow upon receipt of No-Match letters from the Social Security Administration (SSA) or certain communications from the Department of Homeland Security in order to have a defense against a claim that they had "constructive knowledge" that they were employing someone ineligible to work.

The new rule extends from 63 days to 93 days the time period an employer has to complete reconciliation of information where a discrepancy exists according to a specific procedure, with deadlines running from the time a communication is received from SSA or DHS:

• Stage 1 (30 days) for SSA No-Match letters time stated in letter for DHS communications - may be less than 30 days): Employers must check their own records, correct any clerical errors, and verify the changes with SSA or DHS to ensure that everything is now a match. Changes can be made on an original I-9 or a new one can be completed (but the employee should not be called in for reverification at this point). Detailed records should be kept be the employer of all actions and all communications with SSA and DHS.
• Stage 2 (30 days): If the problem is still not resolved, the employer must ask the employee to confirm that the information in its records is correct. If the employee corrects an error in the employer's records, the employer goes back to Stage 1 and verifies the changes with SSA or DHS to ensure that everything is now a match. If the employee confirms that the employer's information is correct, the employer must inform the employee of the situation, the date of the correspondence received, and that the employee has 90 days from the date of the communication to resolve the matter with SSA.
• Stage 3 (93 days): If the issue has still not been resolved, the employer has until the 93rd day to reverify the employee's employment eligibility on a new I-9 form. The employee must complete Section 1 and the employer must complete Section 2 of the I-9, and the employee must present new identity and employment documentation. No document that was the subject of the SSA or DHS letter (or that contains a number which was the subject of such a letter) can be used for this reverification. The new I-9 must be kept with the original I-9.

If this procedure is followed exactly, the employer gets "safe harbor" - immunity from a constructive knowledge charge - but only if the employer follows the procedure precisely. If the employer doesn't follow the procedure but uses it's best good-faith efforts and takes "reasonable steps," a "total facts and circumstances test" will be applied but there are no guarantees of employer safety.

Q: So, if the employer just follows these procedures, they are safe?

A: Following these safe-harbor procedures only means that the employer is safe from constructive knowledge claims based upon receiving an SSA no-match letter or a DHS communication concerning an employee's work authorization document validity. In theory there are countless other ways that an employer, could be found to have constructive knowledge that an employee is unauthorized to work.

Further, nothing will protect an employer who can be proven to have had actual knowledge that an employee was not authorized to work.

Q: When do I need to start worrying about this rule?

A: The rule becomes effective September 14, 2007.

Q: But this rule deals in part with letters from the Social Security Administration - can ICE DO that?

A: Do you mean, can the Department of Homeland Security enact a regulation dealing with another agency? Good question. When the agency published the proposed rule, many people questioned this - but the agency didn't think it was a problem and went forward with the final rule. There's good chance that DHS' authority on this point will be challenged in court once they start enforcing this.

Q: If I get one of these letters concerning an employee, do I have to fire the employee? If so, at what point in the process?

A: From the time either an SSA no-match letter or a DHS notice concerning an employee's employment authorization documents not matching DHS records is received, there are only two situations where an employer has to fire an employee under this rule to avoid risk of liability from a finding of constructive or actual knowledge that it employed a person who was unauthorized to work:

• During the initial 93-day period, if the employer gains actual knowledge that the person is not authorized to work; or
• If at the end of the 93-day period the issue has not been resolved and the employee cannot provide sufficient documentation to complete a new I-9 form which does not contain the information in dispute.

Of course, an employer is also permitted (though not required) to terminate an employee for any other legally valid reason. Legally valid reasons might include unexcused absences, misrepresentations to the employer on the initial application, insubordination, or any other typical reason. Of course, employers should always seek the advice of employment law counsel ins such a situation.

Q: What if, rather then going through the hassle of the safe-harbor procedures and/or just to be safe, the employer terminates an employee?

A: If it turns out that the employee was in fact authorized to work after all (an entirely possible outcome, since the SSA's database can often be incorrect), the employer might be liable to the employee in an unlawful termination suit.

Q: What if I as the employer want to comply with the safe harbor rules, but can't meet the deadlines because the employee isn't around?

A: It's easy to envision a situation where the employee simply isn't in the workplace for a prolonged period after a key piece of correspondence is received, triggering a deadline period: the person might be out on leave (perhaps even leave the employer is required to provide, such as under the family and medical leave act), may be a seasonal H-2B worker, may be on vacation in a far-off home country, etc. Unfortunately, there is no specific provision which places a "hold" on any of the deadline periods under the new regulation in such a case.

However, the employer should still make a good faith effort to resolve the matter as quickly as possible given the circumstances, and should keep thorough documentation of all efforts to do so. Good faith efforts will likely be considered in an evaluation of an employer's constructive knowledge, and will likely be helpful in defending an employer's position.

Q: What if the employee is no longer employed by the company by the time I receive a No-Match letter from the Social Security Administration?

A: If the employee is no longer with the company, the employer has no obligation to do anything with a no-match letter from the Social Security Administration.

Q: How much help to I need to provide to the employee to resolve the issue?

A: None, really. The employer needs to inform the foreign national employee of the deadlines involved - in other words, explain how long the employee has to produce valid or explanatory documentation or otherwise resolve the situation.

However, the employer isn't obligated to provide the foreign national employee with any assistance or guidance in obtaining paperwork. Of course, employers are permitted to assist, but should be wary both of its own legal and ethical obligations in actions taken to resolve the problem and of the necessity of not discriminating in how or to who it provides assistance.

Q: If we have to reverify an employee under this procedure and create a new I-9, does that change our record-keeping requirements for how long I need to hold on to the I-9 records?

A: No. The original date of hire remains the same, and is not changed by this procedure.

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The above is presented for informational purposes only, and does not constitute legal advice or create an attorney-client relationship with our firm. The information provided should not be used as guidance in pursuing an immigration matter absent consultation with a qualified immigration attorney.