Department of Homeland Security Issues Final Regulation Regarding "Safe Harbor" Procedures for Employers Who Receive "No-Match" Letters"
2007-09/06 Jeffrey T. Jones

On August 15, 2007, the Federal Register published the Department of Homeland Security’s final regulation outlining the safe harbor procedures for employers who receive no‑match letters (i.e., name of employee/job applicant does not match listed social security number).  The rule is effective September 14, 2007.  The rule imposes certain safe harbor procedures for employers to take to ensure that the Department of Homeland Security does not find that the employer had constructive knowledge that it was employing an alien not authorized to work in the United States.

The rule includes two new examples of situations where employers can be found to have constructive knowledge: (1) An employer receives a written notice from the Social Security Administration (“SSA”) that the combination of name and security number submitted for the employee do not match SSA records; or (2) An employer receives a written notice from the Department of Homeland Security/Immigration and Customs Enforcement (“DHS”) that the immigration status document or employment authorization document which an employee presented as proof of work authorization is either assigned to another person or there is no record of that document being assigned to anyone.  The rule also states that whether an employer has constructive knowledge depends on the “totality of relevant circumstances” in each particular case.

The rules prescribe certain safe harbor procedures employers can undertake after receiving a no-match letter in order to ensure that the no-match letter will not be used as any part of an allegation that the employer had constructive knowledge that it was employing an unauthorized alien.  According to DHS, employers should take the following reasonable steps after receiving a no-match letter:

1. The employer should check its own records to verify that the discrepancy was not the result of employer error either in its own records or in its correspondence to the respective agency.  If the employer made an error, it should correct its records, inform the relevant agency, verify that the information in the employer’s records now matches the agency’s records, and record the manner, date, and time of verification.  Employers may verify a social security number with SSA by calling (800) 772-6270 or online at http://www.socialsecurity.gov/employer/ssnv.htm.  (This must be done no later than 30 days after receiving the no-match letter.
   
   
2. If the above does not resolve the discrepancy, the employer should ask the employee to confirm the accuracy of the employer’s records.  If the employee finds that the employer’s records are not accurate, the employer should take the steps listed in Number 1 to correct the information with the relevant agency.
   
   
3. If the employee confirms the accuracy of the employer’s records, the employer should ask the employee to resolve the issue with the respective agency.  The employer must inform the employee that the issue must be resolved within 90 days of receiving the no-match letter.  If the employee is able to resolve the discrepancy, the employer should take the steps listed in Number 1 to correct the information with the relevant agency within 90 days of receiving the no-match letter.
   
   
4. If an employer is unable to resolve the discrepancy within 90 days of receiving a  no-match letter using the above measures, the employer should, within 93 days of receiving the no-match letter, complete a new I-9 form as if the employee was a new hire, except that no document may be used to verify the employee’s work authorization that uses the questionable social security number or alien number.  The employee must also provide a document that contains a photograph to establish identity and employment authorization.

If an employer cannot confirm an employee’s authorization to work using the above procedures, the employer must choose between taking action to terminate the employee or facing the risk that it could be found liable for violating the law by having constructive knowledge that the employee was an unauthorized alien.  The above safe harbor procedures should also be applied uniformly to all employees with no-match letters to prevent charges of discrimination.

The civil penalty for knowingly hiring an unauthorized alien (for offenses occurring on or after September 29, 1999 – the fines are different for offenses occurring before that date) are:

       (A)  First offense - $275 to $2,200 for each unauthorized alien;

       (B)  Second offense - $2,200 to $5,500 for each unauthorized alien; and

       (C)  Third offense - $3,300 to $11,000 for each unauthorized alien.

Employers which engage in a “pattern or practice” of knowingly hiring or continuing to hire unauthorized aliens can also face criminal penalties consisting of fines of up to $3,000.00 per unauthorized alien and/or imprisonment for up to six months. 

Please direct your questions regarding the content of this alert to Jeff Jones who prepared this article or any of the attorneys within the Employment, Labor & Benefits Practice Group:  Ron Rutlin, Dean Dietrich, Jeff Jones, Mary Ellen Schill, Chris Toner, or Sara Ackermann.

© 2007 Ruder Ware, L.L.S.C. Accurate reproduction with acknowledgment granted. All rights reserved.
This document provides information of a general nature regarding legislative or other legal developments. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed.