As published in yesterday's Federal Register, the Department of Homeland Security (DHS) has officially rescinded its Social Security "no-match" regulation, which had been stalled in federal litigation and was never fully implemented. The "no-match" rule laid out mandatory procedures for employers to follow if they received Social Security Administration (SSA) no-match letters or DHS notices regarding discrepancies with an employee's name or Social Security Number. The proposed rule would have required employers and their employees to resolve the discrepancies in a very short timeframe. By following these procedures, employers could avoid the risk that a no-match letter could be used as part of any allegation that the employer had "constructive knowledge" that the employee was not authorized to work in the U.S. DHS had acknowledged that the no-match letters were often received by employers months and even years after the submission of W-2 earnings reports. DHS had also acknowledged that the discrepancies were often a result of the high percentage of inaccurate data within the SSA database. For these and other reasons, DHS issued a proposed rule rescinding the no-match regulation on August 19, 2009. The final rule published in yesterday's Federal Register adopts the proposed rule without changes and becomes effective in 30 days.
With the no-match regulation now rescinded, it remains unclear whether SSA will continue to issue no-match letters to employers. If no-match letters continue to be issued, the final rule provides employers with some important guidance on how to handle receipt of such letters. DHS advises employers, upon receipt of a no-match letter, to check their own records for errors, inform the employee of the no-match letter, and allow employees a reasonable period of time to resolve the no-match with SSA. The final rule makes it clear that receipt of a no-match letter, without more, does not mean that the employee is not authorized to work or that the employee provided a fraudulent name or Social Security Number. Employers must never use a no-match letter, without more, as a basis for firing an employee without resolution of the mismatch. Employers taking such action could run afoul of the anti-discrimination provisions of the Immigration and Nationality Act (INA). For this reason, it is critical that employers seek the advice of counsel before any adverse action is taken against an employee based in part on the receipt and non-resolution of a no-match letter.
Employers can expect to see DHS continue its focus on the full implementation of the E-Verify program as the best means to combat unauthorized employment. E-Verify is the federal government's electronic employment eligibility verification system. The E-Verify program is currently available to employers on a voluntary basis, although a federal regulation that became effective September 8, 2009, now requires certain federal contractors and their subcontractors to begin using the program to verify the work eligibility of both newly hired employees and existing employees assigned to work on qualifying contracts. More information on the E-Verify program and the federal contractor rule can be found in our latest advisory on this topic. Our team of immigration attorneys is also available to explain the federal contractor rule and the E-Verify program in more detail, including how recent changes surrounding employment eligibility verification requirements could affect your business.