HOMELAND SECURITY ADOPTS FINAL NO MATCH REGULATION

By Michael C. Saqui and Anthony P. Raimondo

Aug. 13, 2007

            The federal government has announced a final rule on how employers must respond to Social Security Mismatch letters.  For the first time, mismatch letters will have an impact on immigration compliance.  However, employers must remember that they still have an obligation under tax laws to use “due diligence” to report wages under the correct Social Security Number.

            Employers may not hire or employ individuals who they know are not authorized to work in the United States.  “Knowing” includes both actual knowledge and “constructive knowledge,” which exists when an employer has information that would lead a reasonable person to conclude that the employee lacks legal status.

            Historically, receiving a letter from the Social Security Administration (SSA) informing the employer that the employee’s name and Social Security Number (SSN) do not match was not a basis for constructive knowledge.  But the Department of Homeland Security (DHS) is set to publish a new regulation that will put new obligations on employers, and will create a connection between “no match” letters and immigration.  The regulation is scheduled for publication in the Federal Register on August 15, 2007, and will take effect on September 15, 2007.  The procedure n the regulation also applies to a letter from DHS notifying an employer that an immigration status document or work authorization document provided by an employee in the I-9 process is assigned to another person or has not been assigned to any person.

            A no match letter will be basis to find that an employer has constructive knowledge that an employee is undocumented UNLESS the employer takes the following steps:

·        The employer must check for clerical or typographical errors in recording the SSN, and must inform the SSA of any error found within 30 days of receipt of the no match letter.  The process must be documented and stored with the employee’s I-9.  Remember to stamp no match letters with a “received” stamp on the day the letter comes in.

o       If a clerical or typographical error is found and corrected, the employer must verify the corrected information with the SSA.  The Social Security Verification System can be reached at www.ssa.gov/employer/ssnv.htm or by telephone at (800) 772-6270 (7:00 am to 7:00 pm EST). Verification should be documented by notes and by printing the verification screen from the computer.

·        If no clerical or typographical error is found, the employer must require the employee to confirm his or her name and SSN.  If the records are correct, the employer must double check for a clerical error, and must direct the employee to resolve the issue with the SSA within 90 days of receipt of the no-match letter.

o       Again, if a correction is made, the employer must verify the corrected information with the SSA.  The entire process must be documented, including documentation of any telephone calls with government agencies.

·        If the employer still cannot resolve the no match, then it must reverify the I-9 within 3 days using the following procedure:

o       Compete a new I-9, but:

§         The employee must complete section 1 (employee information) and the employer must complete section 2 within 93 days of receipt of the no match letter. 

§         The employer may not accept any document with the disputed SSN or a receipt for an application for such a document.

§         The employee must use a document with a photograph to establish identity or identity and employment authorization. 

§         The new form I-9 must be kept with the former I-9.

§         The regulation is not clear whether the employer must verify the legitimacy of documents used for the new I-9, but given the fact that DHS has identified an unresolved mismatch as a suspicious circumstance, the best approach is to verify immigration documents (such as Permanent Resident Cards) with DHS when such documents are used for reverification after a mismatch.  If a U.S. Birth Certificate is produced to show authorization to work in the United States, employers should insist on a certified copy of the certificate. 

·        If the employer cannot resolve the mismatch, and cannot verify the correction, and if the employee cannot complete a new I-9, then the employer must terminate the employee or risk immigration violations based on constructive knowledge.

o       There has been some confusion about whether an employer must terminate employees immediately at the end of the 90 day period.  The best approach is to allow an employee with an unresolved mismatch an additional three days to reverify the I-9.  If the employee cannot reverify the I-9, or the employer cannot verify the documents used for such reverification, then the employee must be terminated.  Employers still must be cautious about discrimination charges, and reverification will protect employers from accusations that it presumes that employees with unresolved mismatches are undocumented.  Remember, not all mismatches result from immigration problems.  For practical purposes, many employees will abandon their jobs when faced with the prospect of I-9 reverification, and their departure will be a voluntary quit, rather than being fired by the employer, a characterization that will further help protect against discrimination allegations. 

o       DHS and the U.S. Attorney’s office have been eager for years to use mismatch letters against employers, and will undoubtedly be aggressive in pursuing such cases, particularly in light of political points that can be scored in the present environment by going after employers.

·        If the employer has information apart from the mismatch that gives rise to actual or constructive knowledge, it cannot continue to employ the individual. Accordingly, employers must terminate employees who admit that they are undocumented, and should not allow employees to work under more than one name.

COUNSEL TO MANAGEMENT:

            The regulation will become effective on September 15, 2007.  In the meantime, employers should adjust their standard operating procedures to ensure that they respond properly to mismatch notifications and to document the required process.  It is critically important that employers apply these procedures to all employees who are the subject of mismatch notifications without exception in order to avoid discrimination charges.  According to DHS, SSA mismatch notices will also include information from DHS about the new safe harbor regulation and employer obligations, so employers should carefully review both the SSA letter and the DHS letter to make sure that they respond to fully to the government inquiry.

            DHS has informed employer groups that the SSA has withheld mismatch letters during the winter and spring of 2007 in anticipation of the rule.  Employers should expect letters to begin arriving soon, and should apply the new procedures to any letters received in the fall of 2007.

            There is some confusion in the rule about how it applies to seasonal or temporary employees who are not around when the mismatch notice arrives.  We recommend the following procedure:

·        Immediately check your records for clerical or typographic errors.  There is no reason to delay checking internally for transcription errors in recording the SSN.  Employers do not need the employee for this part of the process, and immediate response will help demonstrate a commitment to compliance.

·        Follow up with the employee on rehire.  If the employee returns in a subsequent season, the employer should start the 90 day period for the employee to correct the mismatch on the date of hire.  If the problem is not resolved within that period, then follow the I-9 reverification procedure.  It is vital that employers prohibit employees from using alternative names, and that employers maintain a consistently applied policy of terminating employees who provide false information in the hiring process.

            In addition, this is a good time to review I-9 procedures.  The I-9 remains a critical protection for all employers against alleged immigration violations, particularly in light of DHS’s announcement that it will step up worksite enforcement against employers.  Employees who process new hires must be properly trained in I-9 procedures, and every I-9 must be completed completely and accurately.

            We cannot emphasize enough the importance of consistently applied policies and procedures.  Employers are going to find themselves caught between the political pressure for increased enforcement, and unions and labor advocates who are desperately trying to protect workers from the consequences.  Employers must navigate between compliance on one hand, and discrimination charges on the other.  The best way to stay on safe ground is to establish written procedures that are followed without exception, and to carefully document each step in the process in each case. 

The goal of this article is to provide employers with current labor and employment law information. The contents should neither be interpreted as, nor construed as legal advice or opinion. The reader should consult with Saqui & Raimondo at (831) 443-7100 in Salinas, or (916) 782-8555 in Sacramento for individual responses to questions or concerns regarding any given situation.