'No Match' Rules Viewed

October 23, 2007
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GRAND RAPIDS — For more than 10 years the Social Security Administration has been mailing “no match” notices to employers when a new hire’s name and Social Security number don’t match W-2 Form information in SSA records. The letters serve as an immigration enforcement tool, and under newly revised no-match rules, the U.S. government will place the responsibility for identifying undocumented immigrant workers squarely on employers’ shoulders. 

The new no-match rules have been finalized and were supposed to go into effect Sept. 14 but have been in limbo since late August, at which time the U.S. District Court for the Northern District of California issued a temporary restraining order blocking the Department of Homeland Security and SSA from sending out new no-match notices.

The court action was in response to a lawsuit filed by the AFL-CIO, ACLU, National Immigration Law Center and others. The federal judge turned the restraining order into a preliminary injunction six weeks later, so the old rules remain in effect until the case is decided, which could take several weeks or months, said Mike Snapper, an employment and labor lawyer and partner at Barnes & Thornburg LLP.

Under the old law, when an employer received a no-match letter he or she wasn’t required to do anything about it — it was simply a fact brought to the employer’s attention. As such, the old law wasn’t really effective in purging illegal workers from the system. SSA data shows that the agency sent more than 138,000 no-match notices in 2006, of which 1,735 went to Michigan employers.

The new regulation clarifies employers’ legal obligations under current immigration law and provides additional guidance on the steps employers must take after receiving a no-match letter, according to SSA. The rules require that employers take action and gives them 90 days to check out and correct personal information in an employee’s file. If an employer follows the recommended steps, then that employer won’t be treated as if he or she knew that an illegal was being hired, Snapper said. If procedures aren’t followed, the federal government may treat the employer as if he or she had clear knowledge that an illegal was being hired. 

“It’s really an effort to put part of immigration law enforcement on the employers who are hiring people,” Snapper said. “Some businesses might not want to comply just because they don’t want to take on any administrative burden. There are employers in certain industries and in certain areas of the country more than others where the employment of illegals is very, very high.”

The AFL-CIO lawsuit questions Homeland Security’s statutory authority in revising the rule, and charges there are serious errors in the SSA’s database, which could lead to the unfair firing of U.S. citizens and legal workers. A 2006 survey by SSA’s inspector general revealed that slightly more than 4 percent of the agency’s records were flawed.  

Snapper said the suit is heavily supported by the union side, but a number of business groups — including the U.S. Chamber of Commerce and the National Restaurant Association — have since joined the fray, due to concerns about additional administrative burdens, potential discrimination suits and worker shortages in certain industries.

The new rules give legitimate workers a chance to correct faulty personal information in their records so they won’t be denied SSA benefits, and it also alerts them as to whether they might be victims of identity theft.

The rules also offer safe-haven protections for employers, Snapper said. An employer has to identify and correct clerical errors his or her company may have made in an employee’s record, but if there are no errors on the company’s end, the responsibility of correcting the information falls to the employee. If the employee can’t correct it, the employer has to go through the same process he or she went through when the person was hired — filling out a federal I-9 form that verifies the eligibility of an employee to work legally in the United States.

Employers have to verify an I-9 form for every employee hired. A worker with “right-to-work” status receives a verification number from Homeland Security.

What this new set of rules says is that if an employer has a no-match that neither the company nor the employee can clear up within 90 days, the employer has to treat the employee like a brand-new hire and go through the I-9 process again — but the second time around, the employee cannot use the disputed Social Security number, Snapper explained.

“If the Social Security number is no good, what happens is the employee is ‘un-hired’ or terminated, and that’s the real enforcement mechanism in the law,” he observed.

He said that under the new regulation, if Homeland Security can show that an employer received a no-match letter and did not go through the required steps, the agency can use that against the employer.

“I think Homeland Security would say that the new rules give it a significant enforcement lever on employers. The conscientious employers — which are most of them — are going to follow the rules, just do this, and those who don’t will be at much greater risk of getting into legal trouble,” he noted.

Snapper recommends that employers sit tight for the time being. He recommends that in the interim, if an employer receives a no-match letter, the employer should ask the employee to resolve it. He advised against taking any action beyond that until the court has decided on the issue.

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