09/19/2007
New "No Match Letter" Rule Hits Legal Road Block for Time Being

As most employers know by now, the Department of Homeland Security (“DHS”) has proposed a new rule for what actions employers should take when they receive a “no-match letter” from the Social Security Administration (“SSA”).  If an employer follows the steps set forth in the DHS proposed rule, the employer can take advantage of a “safe harbor” against a finding that it had constructive knowledge of an employee’s unauthorized status based upon the employee’s incorrect or fraudulent use of a social security number.  We addressed the DHS’ proposed rule in our February 2007 Employer’s Counsel newsletter.

The DHS rule was scheduled to go into effect on September 14, 2007.  However, a federal court recently issued a temporary restraining order enjoining the DHS and SSA from implementing the new rule for the time being.  The court took this action at the request of the AFL-CIO and other organized labor groups that have challenged the rule as being inconsistent with current federal law and as being beyond the authorized power of the DHS.  The next hearing relating to the temporary restraining order is scheduled for October 1, 2007.  Following the hearing, the court could dissolve the temporary restraining order allowing the new rule to go into effect or the court could extend the injunction for months until the conclusion of the legal challenge to the new rule.

Under the proposed rule, in order to take advantage of the safe harbor, within 30 days of receiving a no-match letter, an employer should check its personnel records to ensure that the discrepancy is not due to a clerical error.  If a clerical error is found, the employer should notify the SSA of the error and confirm that the corrected number matches SSA records.  The employer should also correct the error on the employee’s I-9 form and document the steps it has taken in the event that its actions are challenged.  If no clerical error is found, the employer should ask the relevant employee whether the information is correct and direct him or her to the SSA to resolve any discrepancy.  In addition, the employer should advise the employee that he or she must resolve any discrepancy within 90 days of the employer’s receipt of the no-match letter.  The employer should take this action quickly in order to provide the employee as much time as possible to resolve the discrepancy.  In addition, the employer should document its file so that it can later prove, if necessary, how and when the employer advised the employee.  If the employee has not resolved the discrepancy within 93 days of the employer’s receipt of the no-match letter, the employer must re-verify the employee’s identity and work authorization by completing a new I-9 form.  Again, this step must be completed within 93 days of the employer’s receipt of the no-match letter and after providing the employee time to address any discrepancy with the SSA.  When completing the new I-9 form, the employer may not accept any document that contains the disputed social security number or any receipt for the replacement of such document in order to establish identity or work authorization.  As with the initial I-9 process completed at the beginning of employment, if an employee in this situation is unable to provide a document or documents that establish his or her identity and work authorization, the employer should not continue to employ the individual.

The practical impact of the court’s temporary restraining order for employers is that it is unclear today when, or if, the proposed no-match rule will go into effect.  When and if the proposed rule goes into effect, Boult, Cummings, Conners & Berry will send out another E-Mail Alert discussing some of the latent risks to be aware of and avoid when following the approach set forth in the rule.  In the meantime, if you have any questions about this area of the law, do not hesitate to contact our Labor and Employment team.

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