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Employers: How to Avoid Penalties for SSA "No-Match" Letters

by Carl Shusterman

On August 15, the Department of Homeland Security (DHS) published a final rule entitled "Safe Harbor Procedures for Employers Who Receive a No-Match Letter." The rule was scheduled to become effective on September 14.

Under the Immigration Reform and Control Act of 1986 (IRCA), employers are liable under the employer sanctions provision of the law if they (1) fail to properly complete and save an employment verification "I-9" form for each employee hired after the law's effective date; (2) if they have "actual knowledge" that a worker is not authorized to be employed; or (3) if they have "constructive knowledge" that a worker is not authorized to be employed. IRCA also provides for penalties for employers (1) who discriminate on the basis of citizenship or nationality; or (2) who commit document abuse.

Whether an employer who has received a no-match letter from SSA and takes no action has "constructive knowledge" that the employee is not authorized to work has remained a gray area for the past 21 years. The INS General Counsel issued letters concerning this situation in 1997 and 1999.

However, the guidance offered by these letters was somewhat vague.

Now, the DHS has published a regulation which details procedures and timelines which, if followed by an employer who is in receipt of an SSA no match letter provide him with a "safe harbor" defense should the DHS charge him with having "constructive knowledge" of an employee's unauthorized employment.

Here is how the government's safe harbor procedure works (quoting directly from ICE's web site):

The employer should take reasonable steps to resolve the No-Match, and apply these steps uniformly to all employees listed in the SSA letter. It is possible that a No-Match was the result of a clerical error on the part of the employee, the employer, or the government. DHS/ICE considers the following to be reasonable steps if the employer:

  • Promptly (no later than 30 days) checks its records to ensure that the mismatch was not the result of an error on the part of the employer,
  • If this does not resolve the problem, asks the employee to confirm the accuracy of the employer's records,
  • If necessary, the employer should ask the employee to resolve the issue with SSA. The employer should inform the employee in order to give him/her as much time as possible to resolve the matter and inform the employee that the employee has 90 days from the date the employer received the No-Match letter to resolve the matter with SSA (explaining that resolution of the mismatch could take time).
  • If the employer was able to successfully resolve the mismatch, the employer should ensure that the instructions in the SSA letter have been followed. The employer should also verify that the error has been corrected by using the Social Security Number Verification Service (SSNVS) administered by SSA, and retain a record of the date and time of verification. SSNVS can be or by telephone at 1-800-772-6270; and
  • If none of the foregoing measures resolves the matter within 90 days of receipt of the No- Match letter, the employer should complete, within three days, a new I-9 Form as if the employee in question were newly hired, except that no document may be used to verify the employee's authorization for work that uses the questionable Social Security number. Additionally, the employee must present a document that contains a photograph in order to establish identity or both identity and employment authorization.
  • If the employer cannot confirm that the employee is authorized to work (by following the above procedures), the employer risks liability for violating the law by knowingly continuing to hire unauthorized workers.

    A little background is helpful here. The Immigration Reform and Control Act of 1986 (IRCA), passed with the strong support of the AFL-CIO, imposed penalties on employers who employed persons not authorized to work in the U.S. (i.e., "illegal aliens") and compelled employers to complete "I-9" forms on all new hires. An employer who knowingly hired undocumented workers became subject to civil fines, and if the government could establish a "pattern or practice" of violations, criminal penalties including jail time.

    An employer who failed to complete I-9 forms in an accurate and timely fashion could also be fined.

    At first, the INS fined a large number of employers, primarily for paperwork violations. Although no employer did any time in a Federal Correctional Institute for IRCA violations, some of the fines imposed by INS exceeded a million dollars.

    However, most of the fines were for paperwork violations. Few employers were fined for having "actual knowledge" that an employee was an illegal alien. This is because IRCA spawned a vast "false documents" industry. Employees could buy false drivers' licenses and social security cards for a nominal price, and the employer could not look beyond the documents presented.

    In an effort to prevent employers from discriminating against job applicants who looked or sounded "foreign", IRCA imposed fines on employers who discriminated on the basis of citizenship or national origin. The law also fined employers who asked for documents beyond those submitted by a job applicant in compliance with the I-9 form.

    Originally, the government decided that only by placing the burden on employers to enforce the immigration laws would illegal aliens stop coming to the U.S. Congress was aware that once someone had crossed the border illegally or overstayed their visa, the INS lacked the manpower to track down and deport them. They reasoned that since jobs were the "magnet" that caused persons to violate the immigration laws, if they put the burden on employers to enforce these laws, the "illegal alien problem" would be solved.

    However, since employers had to walk a fine line between complying with "employer sanctions" laws on one side and "anti-discrimination" and "document abuse" laws on the other, their effectiveness as "mini-INS agents" was severely diminished. As a result, during the past decade, INS has virtually halted its enforcement of employer sanctions laws. Witness the recent raids on the Swift meatpacking plants in which over 1,000 workers were arrested for being undocumented, but Swift was not charged with even a single employer sanctions violation.

    However, the government has one last enforcement card to play against employers: "constructive knowledge". In a series of federal appellate cases dating back into the 1990s, the INS relied on this doctrine to fine employers who had no "actual knowledge" that they employed undocumented workers, but who should have known that they had illegal aliens on the payroll.

    Example: What if an employer receives a letter from the Social Security Administration (SSA) informing them that some of their employees have submitted Social Security cards which appear to belong to someone else? Some employers respond by sending a letter to each of the affected employees instructing them to contact SSA, get the problem resolved, and report to HR within 30 or 60 days. In all the cases that I have been involved with, 99% of these employees disappear before the allotted time period elapses. Of course, one presumes that they simply apply for another job using the same documents, inconveniencing themselves and Employer #A but benefiting Employer #B. Of course, this does virtually nothing to reduce the number of persons working without papers in the U.S.

    As mentioned above, on August 15, 2007, the DHS issued a regulation which stated that if employers, in receipt of a "no match" letter took the steps mentioned earlier in this topic, they would not be charged with having constructive knowledge of an employee's illegality, and would have a "safe harbor" under the employer sanctions provisions of IRCA.

    Employer organizations, unions (The AFL-CIO apparently had an epiphany regarding the desirability of employer sanctions sometime after 1986.) and immigration advocates united in their opposition to these regulations which they understood would herald a new era of heightened immigration enforcement. Not only would such enforcement be extremely disruptive to the economy, but the unreliability of the SSA database could result in terminations of not just undocumented workers, but also of nonimmigrants, lawful permanent residents and U.S. citizens.

    On August 29, the AFL-CIO and a number of other plaintiffs sued to stop the implementation of the "no match" regulations, and two days later, a Federal District Court Judge issued a Temporary Restraining Order (TRO) prohibiting the SSA from sending out 140,000 letters to employers informing them of the new regulations, and stopping the rule from going into effect on September 15th. A hearing is scheduled on October 1 regarding the plaintiffs' request for a permanent injunction against the regulations.

    "We are very pleased that the judge recognized the need to halt the implementation of this ill-advised DHS rule," said John Sweeney, President of the AFL-CIO. "Employers have historically used SSA 'no-match' letters to exploit workers and this rule would only give them a stronger pretext for doing more of the same."

    As immigration counsel to many employers, I will join representatives of the ACLU and the unions in discussing the "no match" regulations at the Labor and Employment Section Annual Conference of the State Bar of California in Oakland on October 20th.

    About The Author

    Carl Shusterman is a native of Los Angeles and a 1973 graduate of the UCLA School of Law. He served as an attorney for the Los Angeles office of the U.S. Immigration and Naturalization Service (INS) until 1982 when he entered the private practice of law. He is authorized to practice before the Supreme Court of California, the Federal District Court in the Central District of California, the U.S. Court of Appeals, Ninth Circuit and the Supreme Court of the United States. Mr. Shusterman is a former chairman of the American Immigration Lawyers Association (AILA), Southern California Chapter and served as a member of AILA's national Board of Governors (1988-97). He has chaired numerous AILA Committees, spoken at dozens of AILA Conferences and has contributed a number of scholarly articles to AILA's publications. Mr. Shusterman is a Certified Specialist in Immigration and Nationality Law, State Bar of California. He serves as a member of the Immigration and Nationality Law Advisory Commission for the State Bar. He is a member of the Executive Committee of the Immigration Section of the Los Angeles County Bar Association and of the American Bar Association. Mr. Shusterman is a frequent writer and lecturer on immigration law. Mr. Shusterman has testified as an expert witness before the Senate Subcommittee On Immigration in Washington, D.C.

    The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

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