Proposed Rule Requires Employers Take Action Upon Receipt of “No-Match” Letter

June 22, 2006

The Department of Homeland Security (“DHS”) wants to eliminate unauthorized workers. To further its goal, on June 14, 2006 the DHS published proposed rules regarding what an employer must do when it receives a “no-match letter.”
What is a “no-match letter?” Annually, employers send the Social Security Administration (“SSA”) millions of W-2 Forms in which the combination of employee name and social security number does not match SSA records. Often, when there is a discrepancy, the SSA sends a letter to the employer, i.e., a “no-match letter.” Currently, there are no detailed regulations regarding an employer’s obligation to respond to these letters. The DHS has now proposed rules that would require employers to take specific action or be subject to possible penalties.
What would the rule require? The proposed rule outlines the steps that an employer must take after receiving either a “no-match letter” from the SSA or any type of written notice from the DHS regarding an employee’s immigration status. (The term “no-match letter” is used herein to refer to the DHS notice as well.)
Step 1. Within 14 days of receiving the no-match letter the employer must check its records to determine whether the discrepancy results from a typographical or similar clerical error. If there is such an error, the employer must immediately correct its records and inform the relevant agencies that the discrepancy has been resolved.
Step 2. If the employer cannot find a clerical error that explains the discrepancy, it must meet with the employee and ask the employee to confirm whether the employer’s listed SSN is correct. If the employee finds that the employer’s record is inaccurate, the employer would need to correct the error and inform the relevant agencies of the correction. If, however, the employee finds the employer’s records are correct, then the employer must ask the employee to pursue the matter with the relevant agency. (For example, the employer could suggest that he or she visit the local SSA office to clear up the discrepancy.) This step must also be taken by the employer within 14 days of receipt of the no-match letter.
Step 3. If the discrepancy is not resolved within 60 days of receipt of the no-match letter, the employer must complete a new Form I-9 for the employee. In completing the new I-9, the employer may not accept any document containing the SSN or alien number that is the subject of the no-match letter for either employment authorization or identity. Further, the employer may not accept any document without a photograph to establish identity.
Conclusion: If the discrepancy is not resolved and the employer is unable to complete a new I-9 form, then the employer must either terminate the employee or risk possible DHS-imposed penalties for engaging an unauthorized worker. The agency will solicit comments on the rule until August 14, 2006. If you have questions about how to submit comments on this rule, please contact Sara Ackermann, the author of this article, or any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.

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