Originally published April 9, 2008
Keywords: DHS, No-Match Rule, foreign nationals, working illegally, firing employees, civil liability, criminal penalties, Social Security records, immigration authorities, SSA, no-match letter, constructive knowledge
Employers may soon find themselves squarely in the middle of the government’s efforts to root out foreign nationals who may be working in the United States illegally — facing difficult choices involving firing valuable employees, civil liability, and even criminal penalties.
On March 26, 2008, the Department of Homeland Security published a new proposal to force employers to fire employees who can’t quickly clear up discrepancies in their Social Security records. The rule, which was initially proposed nearly two years ago, hasn’t gone into effect due to an injunction granted in a federal lawsuit filed last year by immigrant advocates.
At issue are so-called "no-match" letters, which the Social Security Administration sends to employers when the SSA finds that the employer’s wage report includes names and social security numbers that do not match.
Companies have received no-match letters from the government for years. The letters, intended to clear up Social Security databases, provide no immigration information and require no formal action by the employer.
Current immigration law prohibits employers from knowingly hiring or continuing to employ anyone without authorization to work in the United States, and the government can prosecute employers who turn a blind eye to telling facts and whose "deliberate failure to investigate suspicious circumstances imputes knowledge."
What constitutes so-called "constructive knowledge" has always been a bit of a moving target. But US immigration authorities have said for years that receipt of a no-match letter, by itself, doesn’t create liability or an obligation for an employer to act. The new rule would change that.
While the DHS proposal frames the new procedure as a "safe harbor" for employers who receive a no-match letter, the intent is clear: employers who don’t follow the procedure face civil and/or criminal sanctions. Specifically, the rule allows authorities to claim that an employer had constructive knowledge about a worker’s immigration status and failed to act reasonably if the employer receives a no-match letter from the SSA.
To avoid constructive knowledge liability for employing an unauthorized worker after receiving the no-match letter, an employer must:
- Within 30 days, check its records to see if the no-match resulted from clerical errors;
- If no clerical errors are found, then, within 5 days of the records check, ask the employee to confirm that the employer’s records are accurate;
- If the employee confirms the accuracy of the information, then the employer must, within 90 days from the employer’s receipt of the no-match letter, direct the employee to personally resolve the discrepancy with the SSA;
- In each instance, the employer should record the manner, date, and time of its efforts to resolve the discrepancy and confirm that the employee’s name matches agency records;
- If the employer can’t verify with the SSA within 90 days of receiving the no-match letter that the employee’s name and social security number match, the employer must, within 3 days of the end of the 90-day period, re-verify the employee’s identity and employment eligibility by completing a new I-9 form. The types of documents the employer can accept from the employee are more limited than for other employees; and
- If the discrepancy remains unresolved, the employer must fire the employee or risk violating the law by knowingly employing an unauthorized worker.
So what’s the problem with this procedure? First, the government’s proposal essentially assumes that everyone on a no-match list is an illegal worker. Second, the procedure assumes that correcting faulty SSA information will be relatively simple. Neither of these assumptions is true.
The SSA database is notoriously error-filled. Government studies estimate that nearly 18 million Social Security records are incorrect, most of which relate to US citizens. So the rule will reach well beyond immigrants without work authorization.
As anyone who has ever tried knows, obtaining information from the government isn’t easy, and it is even more difficult to correct information in government databases. The deadlines in the rule could leave workers with less than two months to contact the SSA, present the correct information, have the database changed, and allow the employer to confirm the change has been made to avoid being fired.
As a result, the procedure will likely result in many authorized workers being fired before they are able to correct their records.
Further, the civil and criminal liability for continuing to employ unauthorized workers could lead skittish employers to fire some or all employees on a no-match list hastily, without following the entire procedure and giving employees a chance to correct their records. This course of action could lead to claims by employees that employers discriminate by not applying safe-harbor procedures consistently and uniformly among employees of different races and nationalities.
Finally, in the absence of comprehensive immigration reform, the rule will result in substantial hardships for employers and their workers who are unauthorized. It creates penalties for both without offering any options for allowing those employees to become legal workers.
DHS intends to finalize the rule within several months and then ask the federal court to dissolve the injunction that is currently preventing the rule from taking effect. If the injunction is lifted and the rule implemented, employers may reduce risks by strictly following the proposed safe-harbor procedures after receiving a no-match letter. Employers should also create clear procedures for employee hiring, termination, and recordkeeping. Additionally, employers should internally monitor compliance with all procedures to reduce their risk of liability under the no-match rule and discrimination laws.
While the federal courts will decide the legal issues, the proposed "no-match" rule puts employers at the center of an initiative designed to weed out undocumented workers — and potentially in the middle of a "no-win’’ situation.
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