DHS Publishes Final No-Match Rule; AGC to Hold Audio Conference Sept. 20
The U.S. Immigration and Customs Enforcement division of the Department of Homeland Security (DHS) published a final rule on so-called “no-match letters” on August 15, 2007.
A “no-match letter” is a letter from the Social Security Administration (SSA) informing an employer that employee name and social security numbers (SSNs) submitted on W-2s do not match SSA records or a letter from DHS informing an employer that an immigration status or I–9 document presented by an employee was not assigned to that employee according to DHS records. The rule takes effect on September 14, 2007. To view the Federal Register notice containing the final rule, click here.
Current law already prohibits employers from knowingly employing unauthorized aliens, and the term “knowingly” has already been interpreted by regulation and case law to include constructive knowledge. The rule defines constructive knowledge as “knowledge that may fairly be inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition.” The rule currently in effect provides three examples of situations that may establish “constructive knowledge:” (1) failure to properly complete an I-9 form; (2) awareness of a Labor Certification or Application for Prospective Employer; and (3) acting with “reckless and wanton disregard” to the legal consequences of allowing someone else to bring an unauthorized alien into the employer’s workforce or to act on its behalf. The new rule adds another example: failure to “take reasonable steps after receiving information indicating that the employee may be an alien who is not employment authorized,” such as (1) an employee request that the employer file a labor certification or employment-based visa petition on his or her behalf; (2) a SSA no-match letter; or a DHS no-match letter.
The new rule then sets forth a process that an employer may follow upon receiving a no-match letter to show that it has taken “reasonable steps” and to enjoy a “safe harbor” from a finding of constructive knowledge. The process entails:
- The employer must check its records to determine whether the no-match results from a typographical, transcription, or similar clerical error. If a clerical error is found, then the employer must correct the error and notify SSA of the correct information and verify that the employee's name and SSN, as corrected, now match SSA records. [Verification may be conducted through the SSN’s Social Security Number Verification Service (SSNVS) by phone at 1-800-772-6270, weekdays from 7 a.m. to 7 p.m. Eastern Time, or online at http://www.ssa.gov/employer/ssnv.htm.] The employer should record the manner, date, and time of the verification, and should store the record with the employee's I-9. This step must be completed within 30 days of receiving the no-match letter.
- If the mismatch remains unresolved, the employer must promptly ask the employee to confirm that the name and SSN in the employer's records are correct. If the employee states that the employer's records are incorrect, the employer must correct, inform SSA, verify, and make a record as described in step 1, again within 30 days. If the employee confirms that the employer’s records are correct, then the employer must promptly ask the employee to resolve the mismatch directly with SSA, advising the employee that he or she has 90 days from the date that the employer received the no-match letter to resolve the matter.
- If the employer is unable to verify a match with SSN within 90 days of receiving the no-match letter, then the employer must re-verify the employee’s work authorization by completing and retaining a new I-9 as if the employee were a new hire, except that:
a. The employee must complete Section 1 of the I-9 form, and the employer must complete Section 2 of the form, within 93 days of the employer’s receipt of the no-match letter;
b. The employee may not present any document referenced in the no-match letter or any other document containing the disputed SSN;
c. The employee must present a document with a photograph to establish identity;
In the preamble to the final rule, DHS clarifies that the I-9 verification in Step 3 does not include verifying the SSN with SSA, because the mismatch will still occur. DHS also cautions employers not to administer the I-9 verification on a discriminatory basis and not to “mistakenly terminate employment for citizens and authorized aliens.” The regulation expressly prohibits employers from inferring unauthorized status from an employee’s “foreign appearance or accent.”
Termination of employment is not expressly addressed in the final rule. The preamble provides that, if an employer follows the safe harbor process and successfully verifies the employee’s identity and work authorization, then “even if the employee is in fact not authorized to work in the United States, the employer will not be considered to have constructive knowledge of that fact based on receipt of the no-match letter.” However, DHS provides no safe harbor if the employer acquires actual knowledge of an employee’s unauthorized status or constructive knowledge based on facts not addressed in the rule. Furthermore, if an employer completes the safe harbor process but cannot verify the employee’s identity and work authorization, then it must choose between terminating the employee or taking the risk that DHS may find that the company had constructive knowledge that it was continuing to employ an unauthorized alien.
The Administration has indicated that SSA will begin sending out no-match letters based on 2006 W-2s on a staggered basis over the next several months. The latest SSA no-match letters are expected to include a letter from DHS explaining the new rule and the steps that recipient employers should take.
The new rule is just the first in a series of initiatives by the Administration to step up enforcement of existing immigration laws, following the latest breakdown of efforts to pass comprehensive immigration reforms in Congress. The Administration has also announced its intent to:
- Publish a regulation reducing the number of acceptable documents for I-9 verification of employment eligibility;
- Increase civil fines on employers of unauthorized workers;
- Continue criminal investigations against employers believed to knowingly hire unauthorized workers;
- Change the Basic Pilot Program (which is being re-branded as E-Verify) and increase its use and usefulness; and
- Commence formal rulemaking on a rule requiring all federal contractors to use E-Verify.
For more information on these initiatives, click here. For AGC’s reaction, click here.
AGC members are advised to take a proactive approach to reduce their risk of noncompliance and of labor shortages. In addition to following the safe harbor procedures set forth in the new rule, employers should consider taking the following actions:
- Establish a chain-of-command and train HR and other hiring personnel in how to conduct the I-9 process, how to respond to no-match letters, and how to deal with a jobsite visit from the Immigration and Customs Enforcement division of DHS.
- Conduct an internal audit of I-9 forms and consider hiring an outside expert, such as an immigration attorney, to audit a random sample. Correct any errors found before the government finds them.
- Register for SSNVS and begin using it for new hires. If your firm has a significant history of mismatches, then consider using SSNVS to verify the SSNs of your entire workforce.
- Include in your employee handbook a policy regarding your company’s commitment to employing only workers who are authorized to work in the U.S. and whose SSNs and names match government records. Apply and follow the policy on a uniform, nondiscriminatory basis.
- Adopt clauses in contracts with subcontractors, staffing companies, and other service providers furnishing workers on your jobsites by which the latter (a) certify that they are in compliance with immigration laws, (b) promise to conduct periodic self-audits of I-9s, and (c) agree to indemnify you if you are found liable for employing an unauthorized worker that they have provided.
- Establish a recruitment plan in preparation for the possible need to replace workers who abandon their jobs or are terminated during the safe harbor process. AGC’s Model Recruitment & Hiring Program and online Recruitment Center may be of assistance.
On September 20, AGC will conduct its second in a series of audio conferences on immigration law compliance. Details will be posted on the AGC web site when available. For information on all upcoming AGC audio conferences and recordings of past audio conferences, click here.
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