Summary of No Match Letter Regulations

Workers’ and Employers’ Guide are available in both Korean and English. 

SUMMARY OF NO-MATCH REGULATIONS

The Social Security Administration (SSA) maintains earnings information on every worker to determine the eligibility and amount of Social Security benefits for each worker. The purpose of sending no-match letters to employers is to help them improve the accuracy of their wage reporting. On August 16, 2007, the Department Homeland Security (DHS) published the final rule on “safe-harbor” procedures for employers who receive a no-match letter. Under this final rule, DHS can use no-match letter as an immigration enforcement tool by allowing the Immigration and Customs Enforcement (ICE) agency to use receipt of the no-match letter as evidence that the employer has “constructive knowledge” that an employee is unauthorized to work. If employers are found to have “constructive knowledge,” they might face civil and criminal penalties unless they follow certain regulations, known as “safe harbor” procedures. These letters sent out to employers will be used as such evidence.

“No-match” occurs when an employee’s name and Social Security number (SSN) provided on the W-2 form does not match SSA’s records. SSA stated that a “no match” can occur for a number of reasons: (i) transcription or typographical errors; (ii) incomplete name or SSN; (iii) name changes; or (iv) cases where the name or SSN reported is false or (v) the SSN has been assigned to someone else. For example, Korean Americans can receive the letter because of the spacing of their name (i.e. Ok hee v. Okhee). Most importantly, the regulation clarifies that employers may be held liable if they ignore the no-match letter by failing to take specified steps of the “safe harbor” procedure within 93 days of receiving the letter. SSA will begin sending this year’s no-match letters to approximately 140,000 employers this fall. These letters will correspond to approximately 8 million workers and contain strong language warning employers not to take any adverse action against workers.

Based on the fact that SSA reports numerous inconsistencies on its record, NAKASEC has already expressed deep concerns about the possible and negative impacts on employers, workers (citizens and other “lawfully work authorized individuals”) and the economy. The new no-match letter regulation will result in widespread cases of unjust termination of authorized workers who end up with a discrepancy because of inaccuracies in the government’s database, paving the way for possible lawsuits based on Title VII violations. Advocates are already reporting that there has been termination of authorized workers based on an employers’ receipt of the “no-match letters. The no-match letters regulation will drive undocumented workers further underground and fuel the market for counterfeit identity documents. In sum, this regulation is highly likely to cause work authorized individuals to lose their jobs while moving us further away from a regulated wage economy to an unregulated cash economy.

Summary of No-match Letter Regulations

Employers who follow the procedures, so called “safe harbor” procedures, would secure immunity and will not be punished even if the worker is later found to be undocumented. However, DHS makes it clear that “if, in the totality of the circumstances, other independent evidence exists to prove that an employer has “constructive knowledge,” the employer may still face liability.”

Constructive Knowledge: Under the Immigration and Nationality Act (INA), employers who have constructive knowledge that the employee is not authorized to work are liable for a violation of INA. “Constructive knowledge” is knowledge which may fairly be inferred through notice of certain facts and circumstances which would lead a person, through the exercise of reasonable care, to know about a certain condition. The final rule adds the following two examples to the current regulation’s definition of constructive knowledge:

      1. Receipt of a no-match letter from the SSA; or
      2. Receipt of a notice from DHS (usually after an I-9 audit) that the employee’s employment authorization documents presented in connection with completion of the 1-9 form do not match DHS records.

Also an employer will be considered to have constructive knowledge if s/he fails to take “reasonable steps.”

o “Reasonable steps”
    1. DHS will use a “total fact and circumstances test” to determine whether an employer took “reasonable steps.”
    2. Employers who followed safe harbor procedures will be deemed to have taken reasonable steps and, thus, avoid being charged “constructive knowledge.”
         – The final rule extended the time period for an employer to complete reconciliation of information when there is a discrepancy (from 63 days to 93 days).
         – Safe harbor does not apply to a situation where DHS believes the employer had “actual” knowledge that she or he was hiring undocumented individuals

o “Actual” knowledge can be found in any one of following situations, and usually in the form of a confession:
   1. Employee tells the employer that s/he is not present in the United States legally.
   2. Employee tells employer s/he does not have work authorization documents.
   3. Employee asks the employer where s/he can obtain work documents.
   4. The employer is aware that an employee’s work authorization documents have expired and that the employee has not obtained renewal documents.

It must be noted that DHS is not extending the safe-harbor procedures to employers who received information (suggesting that her or his employee might be an undocumented workers) through sources other than no-match letters.

An Employer Must Conform To The Followings Safe Harbor Procedures When It Receives a SSA and DHS No-Match Letter:

Within 30 days upon receipt of the notification:
· The employer promptly checks their records to ensure that the mismatch is not a result of a typographical or clerical error. If there is an error, the employer should correct the information with the relevant agency (SSA or DHS). If the letter is from SSA, the employer may update an I-9 form relating to the employee. However, the employer should not perform an I-9 form re-verification.
o If the information is incorrect, the employer must make corrections, inform the relevant agency (SSA or DHS) of the correction(s) and verify that the information has been corrected. In addition, the rule advises that employers document a record of the manner, date, and time of such verification.
· If the employer determines that the SSA or DHS no-match is not a result of an error in the employer’s records, the employer should promptly request that the employee confirm that the name and social security account number in the employer’s records are correct.
o If the employer confirms that the employer’s record information is correct, the employer must promptly advise the employee of the date of receipt of the no-match letter and advise the employee to resolve the discrepancy with the relevant agency (SSA or DHS).
· DHS considers that no-match has been resolved only when the employer verifies with DHS or SSA that the information corresponds with the proper agency’s records.

Within 90 days of receipt of the notification:
· Within 90 days of receipt of the notification, the employer should re-verify the individual’s work authorization. If the employer cannot cure the discrepancy within 90 days, s/he has 3 additional days to complete the new I-9. When the employer completes a new I-9 form for the employee, s/he cannot use a document containing the SSN or alien number that is the subject of the no-match letter to establish work authorization, identity or both. Additionally, all documents used to prove identity and/or employment authorization must contain a photograph.
· The new 1-9 form should be retained with the original I-9 form.

What Employers Can Do When Discrepancies Cannot be Resolved

If the employer cannot confirm that the employee is authorized to work after completing a new I-9 form, the employer has two choices: either terminate employment (but risk a potential lawsuit by employees for Title VII violations) or continue employment and risk liability for violating the law by knowingly continuing to hire undocumented workers.
· DHS and SSA also emphasized that the receipt of a no-match letter does not, in and of itself, indicate that a worker is undocumented. But an employer’s failure to follow the safe harbor protocol outlined above could subject the employer to possible penalties.

Consequences of Violations

There are both criminal and civil sanctions. Currently, the penalties are:
1. The criminal penalty: for any person or entity which engages in a pattern or practice of violations will be fined not more than $3,000 for each undocumented workers, imprisoned for not more than six months for the entire pattern or practice, or both.

2. The civil penalty for knowingly hiring an undocumented worker: Employers who don’t comply could face fines of $270 to $11,000 per undocumented worker and incident, depending on number of prior offenses.

Additionally, companies that are determined by DHS/ICE (if a respondent fails to request a hearing) or by an administrative law judge, to have failed to comply with this final rule could face fines of $100 to $1,100 per undocumented worker and incident. It is expected that there will be a 25% increase in civil penalties in the near future.

Information Sharing between SSA and DHS

It is important to note that SSA is not required to share information with DHS. Thus, while SSA will continue to send out no-match letters to employers, SSA will not give DHS the names of employers that SSA sent no-match letters to and the no-match letters alone will not trigger immigration worksite enforcement actions. However, if DHS is conducting an I-9 audit and finds an employer’s receipt of the no-match letter, it could use the fact the employer received no-match letters to try to prove the employer had actual or constructive knowledge that it was hiring undocumented workers and will impose criminal and civil penalties.

What Employees Can Do When Employers Advise Them of A Discrepancy

· Employees need to request a copy of the no-match letter to ensure that the employers are indeed responding to notices from SSA or DHS.
· If the employees are represented by a union, the employees need to contact their union as they have additional rights under their union contracts.
· Be aware that employers cannot terminate employees until the processes of verifying discrepancies are completed. Employees cannot be discriminated based on their race, national origin, and language skills under Title VII.
· Be prepared for employer abuse and misuse of the DHS rule and SSA no-match letters. It is very important for employees to document who the employer has notified of a discrepancy and how many days each person was allowed to correct the information.

This summary was produced by the National Korean American Service & Education Consortium (NAKASEC) in collaboration with its affiliates, the Korean American Resource & Cultural Center (KRCC), Korean Resource Center of Los Angeles, and YKASEC – Empowering the Korean American Community of New York.

Sources:
8 CFR Part 274a, Safe-Harbor Procedures for Employers Who Receive a No-Match Letter, available at http://www.ice.gov/doclib/finalsafe.pdf.
American Immigration Lawyers Association (AILA), AILA Summary of the ICE No-Match Letter; and AILA’s teleconference, “Late-Breaking Audio Seminar: Social Security No-Match Regulation.”
National Immigration Law Center (NILC), DHS To Finalize Regulations On SSA No-Match Letters.
Greenberg Traurig’s Business Immigration and Compliance Group, Department of Homeland Security Issues FINAL Regulations on Social Security Number No-Match Letters.

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FOR MORE INFORMATION, CONTACT
Becky Bae | bbae@nakasec.org | 323.937.3703 x. 209
www.nakasec.org

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