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The Department of Homeland Security (DHS) issued a final rule today that will affect employers' responsibilities in verifying workers' employment authorization.  Every year, the Social Security Administration (SSA) issues "no-match" letters to employers informing them that certain employees' names and corresponding Social Security numbers provided on Forms W-2 do not match its database. The new DHS regulations provide specific steps employers must take when receiving a no-match letter to ensure they are complying with legal hiring requirements.

No-match letters issued to employers by the SSA for tax year 2006 will now be accompanied by a letter from U.S. Immigration and Customs Enforcement (ICE) informing employers on how to respond in a manner consistent with obligations under U.S. immigration laws.

Requirements Under the Final Rule

Under the final rule, employers are expected to:

Verify within 30 calendar days that the mismatch was not a result of a clerical error on the employer's part.

Request that the employee confirm the accuracy of employment records.

If employment records are accurate, ask the employee to take action to resolve the issue with SSA, such as by visiting a local SSA office.

If these steps resolve the problem, the final rule requires employers to follow instructions on the no-match letter to correct the information with the SSA and retain a record of the verification with the SSA.

Where the discrepancy cannot be resolved within 90 days, the employer is required to complete a new Form I-9 without the questionable Social Security number and instead using alternate documentation from the employee that conforms with I-9 identity requirements. The employer has an additional three days to complete the new I-9. The employer can continue to employ the individual until all of the steps in the above procedure are completed. 

Steps Mitigate Employers' Risk

By following these actions, employers 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 United States. However, the new rule does not provide a safe harbor for employers that for some other reason have actual or constructive knowledge that they are employing an alien not authorized to work in the United States.

If the discrepancy referred to in the no-match letter is not resolved, and if the employee's identity and work authorization cannot be verified by completing a new I-9, the employer must either terminate the employee or face the risk that the DHS could find that the employer had constructive knowledge that the employee was an alien not authorized to work in the U.S. 

The final rule becomes effective September 14, 2007. Please do not hesitate to contact us should you have questions or concerns about how it will affect your responsibilities in verifying workers' employment authorization. More information can also be found online at the ICE's Safe Harbor Information Library.