Has the Social Security Administration’s “No Match” Letter Met its Match?

November 13, 2007

Summary
One of four articles in the Winter 2007 edition of the Employment Law Briefing newsletter, this article focuses on the fact that, much to the disappointment of many American employers, the complex interface of employer obligations imposed by the Social Security Administration (“SSA”) and the Department of Homeland Security (“DHS”) has not gotten any easier. Other articles in this issue are: 2. Sexual Harassment Not Limited to Male Against Female, 3. Be wary when using tests to screen job applicants, and, 4. Court clarifies employees’ FMLA rights.

The problem
Much to the disappointment of many American employers, the complex interface of employer obligations imposed by the Social Security Administration ("SSA") and the Department of Homeland Security ("DHS") has not gotten any easier.  It was supposed to have been cleared up by the DHS' new "safe harbor" regulation, which was to take effect on September 14, 2007.  Instead, the new rule has created a quagmire of confusion about employer responsibilities in complying with the Immigration and Naturalization Act (INA) while also respecting employees' civil rights.

The INA prohibits an employer from continuing to employ an alien in the United States knowing the alien is (or has become) unauthorized to work in the United States.  The Department of Homeland Security, which is charged with enforcement of the INA, holds employers accountable for violations of the INA even if employers have only constructive knowledge that employees are unauthorized.  Under the existing rules, constructive knowledge of unauthorized status requires an employer to take reasonable steps to verify that an employee is using a proper name and social security number.  The long-standing challenge for employers has been understanding what constitutes "constructive Knowledge" and what response is required thereafter.

 The Department of Homeland Security's new rule attempts to address both issues of confusion.  First, the new rule states that an employer who receives a "no match" letter from the SSA for an employee who is ultimately discovered to be unauthorized is considered to have constructive knowledge that the employee is (or has become) unauthorized.  A "no match" letter is a Social Security Employer Correction Request, stating that there is a mismatch between an employee's name and social security number.   Where historically, an employer did not know how to proceed once a "no match" letter was received, the new rule tells an employer what it can do to comply with the INA in order to avoid a finding of "constructive knowledge:"

In walks trouble
On August 31, 2007, two weeks before the new rule was to take effect, a district court in Northern California told the Social Security Administration that it could not send out any more "no match" letters and the Department of Homeland Security could not enforce its new rule.   AFL-CIO, et al. v. Chertoff, et al. (N.D. Cal. Case No. 07-CV-4472 CRB).  On October 1, 2007, the Judge in that case, Charles Breyer, gave the Plaintiffs ten more days to demonstrate that irreparable harm will certainly come to millions of legal immigrants if the DHS is allowed to enforce the new rule. 

Where the new rule was intended to alleviate confusion about employer duties and create a "safe harbor" for compliance with the INA, the Plaintiffs in the Chertoff case now argue that using the letters as a means to determine authorization status in accord with the new rule effectively discriminates against legal immigrants on the basis of national origin. 

Although the California district court is expected to issue a final ruling by October 11, 2007, notably, both the Social Security Administration and the Department of Homeland Security report that the SSA will not observe the district court's ruling from Northern California.  Instead, the SSA will send out this year's "no match" letters and employers are still required to address and correct inaccuracies in reporting.  In an effort to provide clarity about an employer's continuing obligations under the INA - despite the California court's ruling - this year's "no match" letters will be accompanied by a guidance letter from the DHS outlining what steps an employer should take to both comply with the INA and avoid liability for civil rights violations.

New Mexico Employers Can Win No Matter What
Despite the hoopla arising from the California litigation, a recent judicial opinion governing New Mexico employers may be helpful, irrespective of the outcome of the AFL-CIO v. Chertoff case.  In February, 2007, the Tenth Circuit federal Court of Appeals upheld dismissal of a case in favor of an employer who terminated an employee who could not resolve a mismatch between his social security number and his name.  In that case, the employer did not use a "no match" letter, but instead hired two data services to "verify" the SSNs of all of its employees in response to information that the employer might soon thereafter be "raided" by the then-INS.  Although the Tenth Circuit did not specifically address whether using such a data service was appropriate, the court ultimately determined that the employer properly relied on information garnered therefrom.  Critical in reaching this determination, seemed to be the fact that the employer verified the SSNs of all of its employees in a uniform manner which did not single out certain employees or certain classes thereof. 

Data service companies can perform the verification of an entire workforce and provide information regarding inconsistencies in I-9 information for every employee.  A couple of examples of such services can be found in the Zamora opinion.

UPDATES WILL BE RPOVDED IN THE NEXT EDITION