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Special Guidance on ICE Final Rule, Effective September 14, 2007, on Social Security “No-Match” Letters
Breaking News • August 30, 2007
Over the past several years, the Social Security Administration (SSA) has issued thousands of so-called “no-match” letters to employers around the country. These letters advised employers that certain Social Security Numbers (SSN) that were provided to the SSA by employers (vis-à-vis employees) for withholding purposes for prior tax years do not match the names of the individuals that SSA has on file for such numbers. Although not always the case, no-matches are often caused by employees who are not authorized to work in the United States (and are using either a false SSN or an SSN assigned to someone else).
Background
Previous guidance from the government indicated that the receipt of a no-match letter does not in and of itself put an employer on notice that it is employing unauthorized workers, although the government also informed employers that “it would be equally incorrect for an employer to assume that in all cases it may safely ignore any possible INA (Immigration and Nationality Act) relevance or consequences of SSA discrepancies”. (See April 12, 1999 letter from Paul Virtue, former General Counsel, U.S. Immigration and Naturalization Service.) To add to the confusion, previous SSN no-match guidance from government agencies cautioned employers not to act in ways, while trying to take corrective action, which could expose them to potential discrimination lawsuits and liabilities.
As a result, employers were often left with doing nothing or too little in the face of numerous SSN no-match letters, exposing employers to potential sanctions, or with doing too much, causing potential exposure to discrimination lawsuits.
The New Rule
In an attempt to clarify years of confusion regarding this issue, the sanctions/ enforcement wing of the Department of Homeland Security (DHS), U.S. Immigration and Customs Enforcement (ICE), recently finalized a new rule regarding the legal obligations of employers when they receive SSN no-match letters sent by SSA1.
This new rule also applies to situations in which employers receive written notice from DHS regarding the immigration status of certain employees. The rule becomes effective on September 14, 2007, unless legal challenges that were recently filed stay implementation. The final rule also describes “safe harbor” procedures for an employer to take in order to avoid a finding by ICE that the employer had constructive knowledge that certain employees were not authorized to work in the U.S. based upon the receipt of SSA no-match letters or notification from DHS.
Specifically, the new rule states that an employer will be on notice for having employed an unauthorized alien if it receives a letter from SSA that an employee's name and corresponding SSN do not match SSA records. ICE is careful to point out in the preamble to the final rule that the “rule does not create a new requirement that an employer resolve a discrepancy within 90 days. Instead, the rule creates a safe harbor from use of the no-match letter as part of an allegation of constructive knowledge if the employer takes certain steps to resolve the discrepancy.”
In order for an employer to reach the ICE “safe harbor” after the receipt of a no-match letter from SSA, it must first determine whether the SSN discrepancy resulted from a clerical error by checking its internal records. If so, the employer must then correct the mistake internally and inform SSA of the correct information. The employer must also verify with SSA that the employee’s name and SSN, as corrected, match SSA records. The employer should then make a record of the corrections and store such information with the relevant Form(s) I-9. The employer may correct the relevant I-9 and initial and date all changes, or it may complete a new form. In either case, the employer must not perform new I-9 verifications. In order for an employer to take refuge in the ICE safe harbor when it concerns a simple clerical error, it must complete these procedures within 30 days of receipt of the SSA no-match letter.2
If an employer determines that there was no clerical error within its own records, it must then ask the relevant employee to confirm that the name and SSN in the employer’s records are correct. If the employee states that the information is incorrect, the employer must then follow the procedures outlined in the preceding paragraph. If, on the other hand, the employee confirms that the SSN information is correct, the employer must ask (“promptly”, according to ICE) the employee to resolve the discrepancy with SSA. The employer must advise the employee of the date that the employer received notice from SSA and advise the employee that he or she must resolve the discrepancy with SSA within 90 days of the date the employer received the no-match letter from SSA. The employer is not obliged to provide any assistance to any such employee. We recommend that employers advise employees of SSN discrepancies in writing under these circumstances, asking the employees to sign a receipt confirming acceptance of such notice. If, within those 90 days, the employer is unable to verify with SSA that the name and SSN match SSA records for the particular employee, the employer must then complete a new Form I-9 for the employee within an additional three business days. (See the “New I-9 Procedures” section below.)
The new ICE rule also states that an employer will be held liable for employing an unauthorized worker if it receives written notice from the DHS that an employee’s immigration status document does not match that employee. Most likely, receipt of such notices from DHS would occur following ICE I-9 audits. Under these circumstances, an employer also may take shelter in the ICE safe harbor, provided that the employer contacts its local DHS office and “attempt[s] to resolve the question raised by DHS about the immigration status document or employment authorization document.” According to ICE, the employer must complete the foregoing “attempt” within 30 days of receiving the appropriate written notice from DHS. We recommend that employers document such attempts to contact DHS, and send a letter to the relevant DHS office via registered mail or courier to confirm the attempt at corrective action. If the employer is then unable to resolve the issue within 90 days of receipt of the written DHS notice, the employer must execute a new I-9 within an additional three business days after reaching the 90-day mark. (See the “New I-9 Procedures” section below.)
Note that if an employer has “actual knowledge” of an employee's unauthorized status, it will not be able to take advantage of any safe harbor coverage. Moreover, in its comments section to the new rule, ICE mentions that employers will not be able to avail themselves of the safe harbor if other evidence exists (independent from the written SSA or DHS notices) that an employer did indeed have “constructive knowledge” of unauthorized employment.
New I-9 Procedures
If an employer is required to complete a new Form I-9 under either of the safe harbor procedures noted above, it must use a procedure that is somewhat different than that used for newly hired employees.
Specifically, under the new rule, the employee must complete Section 1 of the Form I-9, and the employer must complete Section 2, within 90 days of the employer’s receipt of the relevant written notice from either SSA or DHS. In doing so, the employer must not accept from the employee any of the documents referenced in any of the written SSA or DHS notice, any document that contains a disputed SSN or alien number referenced in any written SSA or DHS notice, or any receipt for an application for a replacement of such documents. Finally, the employee must present as a part of the new I-9 process a document that contains a photograph in order to establish identity (List B of Section 2 of the I-9) or both identity and employment authorization (List A of Section 2 of the I-9). Employers must retain the previous I-9 form(s) along with the new I-9, assuming it is able to be completed successfully by the employee.
If the employee is not able to complete the new I-9 successfully within the prescribed time period, employers must terminate employment immediately or risk the imposition of fines and/or penalties by ICE. If an employee resigns during the process, the employer is not obliged to complete the prescribed no-match procedures.
The following, basically taken from the new ICE rule, illustrates the no-match procedures and prescribed timeframes:
| Action | Final Rule |
|---|---|
| Employer receives letter from SSA or DHS indicating mismatch of employees name and social security number. | Day 1 |
| Employer checks own records, makes any necessary corrections of errors and verifies corrections with SSA or DHS. | 1–30 Days |
| If necessary, employer notifies employee and asks employee to assist in correction. | 1–90 Days |
| If necessary, employer corrects own records and verifies correction with SSA or DHS. | 1–90 Days |
| If necessary, employer performs special I-9 procedure. | 91–93 Days |
During the process prescribed above, affected employees may continue to be employed. However, should an employer discover that an employee is not employment authorized during the no-match procedure, the employer must then terminate employment or face possible sanctions. In these circumstances, employers should be wary of potential conflicts of interest that could arise where an attorney represents both the employer and affected foreign national employees in visa sponsorship matters.
ICE also mentions in its preamble to the final rule that it will review the general circumstances surrounding an employer’s good faith attempts to resolve SSN no-matches in order to reach the safe harbor should an affected employee, for example, not be reachable. ICE advises that in these situations employers should always make good faith efforts to comply with the safe harbor procedures as quickly as possible and to document such efforts in case of a potential review by ICE.
Discrimination
Although the new ICE rule seems to outline a relatively clear path towards the resolution of no-match issues for employers, companies must continue to take a reasonable and objective approach with respect to affected employees so as to not trigger potential discrimination claims. The final rule describes general procedures that must be followed by employers in order to take advantage of safe harbor, but the rule of course cannot cover all possible contingencies concerning employees and SSN and/or work authorization discrepancies which can lead to confusion, misunderstandings and potential disputes.
Consistent internal procedures must therefore be developed and refined over the course of time with the assistance of immigration and/or employment counsel. In order to minimize the risk of discrimination claims, we recommend that employers encapsulate or reference the new no-match rule within written policies. Establishment of a SSN no-match policy and procedure should provide guidance to employers to ensure that affected employees are treated in a consistent manner in order to avoid any possible discrimination claims. Therefore, employers should not assume immediately that all affected employees are unauthorized to work in the U.S. and treat them as such due to the receipt of no-match letters. For example, in most cases, even in light of the new safe harbor procedures, employers should not refer to the employee's Form I-9 or employment authorization when first meeting with employees to address SSN no-match notices.
Please do not hesitate to contact our office should you have any questions concerning the above.
- The new no-match rule only applies to employers and does not apply to instances when employees themselves receive no-match letters from a U.S. government agency. ↩
- As with any new hire, employers should, upon receipt of a no-match letter, also confirm that the SSN information is simply not valid. Previous no-match letters offered guidance regarding invalid SSNs, as does the no-match rule:
- numbers that are listed with more or less than nine digits;
- listed numbers whose first three digits are “000” or are in the “800” or “900” series;
- numbers whose middle two digits are listed as “00”; and,
- listed numbers whose last four digits are “0000”. If an employee has provided an invalid number, employers must then re-verify the employee’s work authorization by completing an entirely new Form I-9 and asking the employee to provide the necessary documentation to demonstrate valid employment authorization. ↩