DHS Rescinds Safe-Harbor Procedures for No-Match Letters

September 1st, 2009

The Department of Homeland Security (DHS) has proposed to amend its regulations by rescinding its safe-harbor procedures for employers who receive a no-match letter, which were originally promulgated on August 15, 2007, and October 28, 2008.  According to the proposed rule in Federal Register: August 19, 2009 (Volume 74, Number 159)][Page 41801-41805]: 

“Implementation of the 2007 final rule was preliminarily enjoined by the United States District Court for the Northern District of California on October 10, 2007. After further review, DHS has determined to focus its enforcement efforts relating to the employment of aliens not authorized to work in the United States on increased compliance through improved verification, including participation in E-Verify, ICE Mutual Agreement Between Government and Employers (IMAGE), and other programs.”

No-match letters result when employers’ W-2 information does not match Social Security Administration records.  According to the Federal Register discussed above, “Employers annually send the Social Security Administration (SSA) millions of earnings reports (W-2 Forms) in which the combination of employee name and social security number (SSN) does not match SSA records. In some of these cases, SSA sends a letter, such as an “Employer Correction Request,” that informs the employer of the mismatch. The letter is commonly referred to as an employer “no-match letter.” There can be many causes for a no-match, including clerical error and name changes. One potential cause may be the submission of information for an alien who is not authorized to work in the United States and who may be using a false SSN or a SSN assigned to someone else. Such a letter may be one indicator to an employer that one of its employees may be an unauthorized alien.”[[Page 41802]]

The proposed rule describes a similar process that ICE undertakes after it has inspected an employer’s Employment Eligibility Verification forms (Forms I-9) during an investigation audit and after unsuccessfully attempting to confirm, in agency records, that an immigration status document or employment authorization document presented or referenced by the employee in completing the Form I-9 was assigned to that person.

The FR continues:  “Over the years, employers have inquired of the former Immigration and Naturalization Service, and now DHS, whether receipt of a no-match letter constitutes constructive knowledge on the part of the employer that he or she may have hired an alien who is not authorized to work in the United States. On August 15, 2007, DHS issued a rule describing the legal obligations of an employer following receipt of a no-match letter from SSA or a letter from DHS regarding employment verification forms. See 72 FR 45611. The rule also established “safe-harbor” procedures for employers receiving no-match letters.”

The proposed rule then concludes:  “DHS has determined that improvements in U.S. Citizenship and Immigration Services’ (USCIS) electronic employment verification system (E-Verify), along with other DHS programs, provide better tools for employers to reduce incidences of unauthorized employment and to better detect and deter the use of fraudulent identity documents by employees. As discussed below, DHS therefore has concluded that rescinding the August 2007 No-Match Rule and 2008 Supplemental Final Rule will better achieve DHS’s regulatory and enforcement goals.”

DHS’s rescission of the safe-harbor procedures for employers is certainly welcome news, since it would have deemed employers who did not follow the safe-harbor rules to have constructive knowledge of employing an individual without authorization, and thereby subject them to possible criminal prosecution.  These safe-harbor procedures were problematic in that they did not take into account errors in the DHS and SSA database that could not be resolved within the time period granted under the procedures. 

However, the alternative that the government has chosen is not ideal.  It is relying on an electronic system that still has defects.  Furthermore, without comprehensive immigration reform, employers will be penalized for hiring necessary foreign workers.  Let’s hope that this is the first step towards legalization of the millions of undocumented workers who are crucial to our economy and deserve legal status in the US.