Last year, the Social Security Administration issued "no-match" letters to approximately 120,000 employers nationwide, reporting non-matching social security account numbers relating to approximately 7.3 million employees. For privacy reasons, the letters do not identify the names of the employees to whom the numbers relate. The non-matching numbers are detected by SSA in processing W-2 forms filed annually by workers and their employers.
To date, employers have had little incentive to take any action based on these letters since no employer has ever been prosecuted or fined for failing to do so. Even though large numbers of the non-matching numbers are considered to relate to unauthorized foreign workers, the SSA no-match letters instruct employers not to terminate affected employees because of the many variables which could otherwise explain the perceived discrepancies. Under current law, the SSA cannot share information about an employer who receives a "no-match" letter with officials of the Department of Homeland Security (DHS) charged with enforcing the country’s worksite immigration laws, unless DHS can articulate independent grounds for believing that the employer has violated the employer sanctions laws.
Ignoring SSA no-match letters in the future could pose significant risks of employer sanctions fines and penalties. In a June 14, 2006 notice of proposed rulemaking, DHS has stated an intent to prosecute employers for knowing hire violations under the constructive knowledge theory if DHS discovers that they disregarded SSA "no-match" information with respect to individuals who turn out to be unauthorized. Under the proposed rule, employers can secure a safe harbor from prosecution for constructive knowledge violations in connection with SSA "no-match" letters if they adhere to the following rules and timetables:
- Within 14 days of receiving a "no-match" letter from SSA, the employer should check its records to make sure that there have been no typographical, transcription, or other clerical errors in either the employer’s records or in its communications with the SSA that could account for the alleged discrepancies.
If there is no such error, proceed to step 2.
If there is such an error, the employer must correct its records and contact either the SSA to confirm whether the employee’s corrected information produces a match. If the SSA subsequently verifies the employee’s account number, the employer must make a record of the manner, date, and time of the verification. If there is still no match, however, proceed to step 2.
- Within 14 days of receiving a "no-match" letter from SSA, the employer should contact the employee in question and confirm with him that his employment information is correct.
If the employee’s information is correct, the employer should ask the employee to contact SSA to resolve the issue. Once the employee has done so, the employer should contact SSA to confirm the employee’s account number. If there is a verified match, the employer should make a record of the manner, date, and time of the verification. If there is no match, however, proceed to step 3.
If the employee’s information is not correct, the employer should correct its records and contact SSA to confirm whether the employee’s corrected information produces a match. If there is a verified match, the employer should make a record of the manner, date, and time of verification. If there is still no match, however, repeat step 2 (that is, follow the instructions in the paragraph immediately above).
- Within 63 days of receiving a "no-match" letter from SSA, both the employer and the employee should complete a new Form I-9, but with these additional restrictions:
- Neither the employee’s employment authorization nor his identity may be proved with any document containing a social security number or an alien number that was the subject of a "no-match" letter.
- The employee’s identity may only be established with a document that has a photograph of the employee on it.
- Only a document that has a photograph of the employee on it can be used to establish both the employee’s identity and his employment authorization at the same time.
If the employer and the employee cannot complete a new Form I-9 under these restrictions, the employer should terminate the employee or else risk being held liable for employing an unauthorized worker.
The proposed rule is open for comment through August 14, 2006. DHS specifically has requested feedback on the proposed time frames for investigating no-match reports and resolving alleged discrepancies prior to reverifying employees whose accounts have not been cleared by SSA. In the meantime, Congress continues to debate immigration reform, including lifting the ban on information sharing between SSA and DHS with respect to SSA no-match information. Both the House and the Senate have also proposed that investigation of SSA no-match information become a mandatory recordkeeping function, subject to fines and penalties for paperwork and knowing hire violations for failure to comply. Should such legislative proposals become law, they would supersede the proposed administrative rule.
Because of recent stepped up worksite enforcement efforts on the part of DHS, it makes good business sense to follow the proposed DHS rules and timetables for investigating SSA no-match information. Staying within the guidelines and applying them uniformly regardless of race or national origin should provide a valid defense to a charge of unlawful discrimination. Moreover, compliance could provide a safe harbor to a charge of constructive knowledge in the event of an I-9 audit or worksite investigation.