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New
Immigration Rules for Responding to “No-Match Letters”
from Social Security Administration
By
Minh
Phung Ngo and Richard
M. Rawson
[August 2007]
On Sept. 14, 2007, a new rule from the Department of Homeland
Security (DHS) takes effect that will significantly change the
way employers must respond to no-match letters from the Social
Security Administration (SSA) or notices from DHS concerning
discrepancies on I-9 employment verification forms. Entitled
“Safe-Harbor Procedures for Employers Who Receive a No-Match
Letter,” the new rule amends existing regulations relating
to the unlawful hiring or continued employment of unauthorized
aliens. The rule requires the employer to take affirmative action
to attempt to resolve the no-match within 30 days, and if the
no-match cannot be resolved within 90 days, the employer must
re-verify the alien’s identity and employment authorization
using a modified I-9 process. Below is a summary of the new
rule and a step-by-step guide for employers to ensure compliance
with the new so-called “safe harbor” procedures.
Constructive Knowledge Redefined
Under the Immigration Reform and Control Act (IRCA), an employer
may be held liable for actual or constructive knowledge
that an employee does not have employment authorization. The
final rule expands liability under the IRCA by adding two additional
examples of constructive knowledge. Under the new rule, employers
may be found to have constructive knowledge if they fail to
take reasonable steps after receiving: 1) a “no-match”
letter from SSA, or 2) notice from DHS (usually after an I-9
audit) that the employee's employment authorization documents
presented in connection with completion of the I-9 form do not
match DHS records.
Responding to No-Match Letter from SSA
Each year the SSA sends thousands of letters to employers
across the country listing the names and social security numbers
(SSNs) of employees whose SSNs do not match their names on the
earnings records of the SSA. The stated purpose of the so-called
“no-match” letter is to properly credit earnings
records to the employee’s SSA account for future benefits.
The new rule provides employers with specific guidelines to
follow after receiving a no-match letter from SSA (the so-called
“safe harbor” procedure). If an employer follows
the steps outlined in the safe harbor procedure, DHS is prohibited
from using an employer’s receipt of an SSA no-match letter
as evidence of constructive knowledge of unauthorized employment.
It is important to note that even if an employer follows
the safe harbor procedures, it may still be found liable based
on actual knowledge (i.e. if the employee admits to the employer
that he/she is unauthorized) or constructive knowledge based
on other evidence. The safe harbor procedure involves the
following steps:
Step 1: Employer must check its own
records within 30 days
Following receipt of an SSA no-match letter, the employer
must check its records to determine whether the discrepancy
was caused by a clerical error, such as errors in spelling
the employee’s name or in listing the employee’s
SSN. If such an error occurred, the employer must correct
the error with SSA, and verify that the corrected name and
social security number now match SSA's records. The employer
should make a record of the manner, date, and time of such
verification, and then store such record with the employee’s
I-9 form. Employers may verify a SSN with SSA by calling 1-800-772-6270
or online at www.ssa.gov/employer/ssnv.htm.
The employer may update the I-9 form relating to the employee
or complete a new I-9 form (retaining the original), but should
not perform a new I-9 verification. The above steps must be
completed within 30 days after
receipt of the no-match letter.
Step 2: Employer must ask employee to assist
in resolving no-match within 90 days
If the employer determines that the SSA no-match is not
a result of an error in the employer's records, the employer
must promptly request that the employee confirm that
the name and social security account number in the employer's
records are correct. If the employee states that the information
is incorrect, the employer should correct the error
as outlined above. If the employee states that the employer's
record is correct, the employer must promptly advise
the employee of the date of receipt of the no-match letter
and advise the employee to resolve the discrepancy with the
SSA no later than ninety (90) days
after the receipt date. The employer is under no legal obligation
to advise the employee regarding the means or manner of resolving
the discrepancy with the agency.
Step 3: Employer must re-verify employment
authorization within 93 days
If the no-match cannot be resolved with SSA within 90 days
of receipt of the no-match letter, the employer must attempt
to re-verify the worker's employment eligibility by completing
a new I-9 employment verification form. Companies should use
the same procedures as when completing an I-9 form at the
time of hire, with a few exceptions:
- The employee must complete section one and the employer
must complete section two of the new I-9 form within 93
days of receipt of the no-match letter.
- The employer cannot accept a social security number that
is the subject of an SSA no-match letter or any other document
referenced in a DHS notice of I-9 discrepancy to establish
employment authorization or identity.
- The employee must present a document that contains a photograph
in order to establish identity or both identity and employment
authorization.
- The new I-9 form should be retained with the original
I-9 form.
Step 4: Consult with counsel about possible termination
of employee after 93 days
If the employer cannot re-verify the employee's work eligibility
through completion of a new I-9 form, the employer must decide
whether to terminate the employee or face the risk in any
subsequent DHS enforcement action of being determined to have
constructive knowledge and being penalized for the continuing
employment of an unauthorized alien. In most circumstances,
employers should terminate the employee to avoid a finding
of constructive knowledge of unauthorized employment. However,
we recommend that you always consult with legal counsel before
terminating the employee to ensure that such action is in
compliance with the final rule and applicable employment laws.
There may be special cases where you have strong evidence
that the employee is authorized to work in spite of the no-match
and inability to re-verify identity and employment authorization.
An employer should not terminate an employee until the process
is completed, unless the employer obtains actual knowledge
(such as through an admission by the employee) that the employee
is not eligible for employment in the United States.
Responding to Notice of I-9 Discrepancy
from DHS
The safe harbor procedures for responding to a notice of I-9
discrepancy from DHS are somewhat different than those listed
above for the SSA no-match letter. The employer must contact
the local DHS office in accordance with instructions in the
written notice and attempt to resolve the question raised by
DHS about the immigration status document or employment authorization
document. The instructions in the DHS notice may provide less
than 30 days for the employer to respond. If the employer is
unable to resolve the discrepancy with DHS within 90 days of
receiving the written notice, the employer must re-verify the
employee’s employment authorization within the following
three days as outlined above.
Common Questions
Does mere receipt of an SSA no-match letter
open up potential liability?
Not initially. Keep in mind that potential liability only
arises when an employer “fails to take reasonable steps
after receiving information indicating that the employee may
be an alien who is not employment authorized.” DHS acknowledges
that there will be situations where mere receipt of a no-match
letter does not indicate that the employee may be an individual
who is not employment authorized. However, because such a determination
would depend on a number of factors, we recommend that the safe
harbor provision be followed in response to receipt of every
SSA no-match letter.
Is the safe harbor procedure a requirement?
The safe harbor procedure is not a requirement but we highly
recommend that all employers follow it. There may be other procedures
that would be considered “reasonable steps” of responding
to these notices. DHS will base a finding of constructive knowledge
on a number of factors, including whether the employer made
a good-faith but ultimately unsuccessful attempt to comply with
the safe-harbor procedure. When the employer is unable to meet
the strict timelines, DHS will take into consideration extenuating
factors, such as the unavailability of an employee who is a
seasonal worker, or who is on vacation or sabbatical. In such
a situation, an employer should respond as rapidly as practicable
and keep a file documenting such efforts.
What if employee requests more time to resolve
the discrepancy with SSA?
Unless the employee provides an exceptionally good reason,
the company should not provide him/her with additional time.
The rule implies that an employee should be able to resolve
the discrepancy within 90 days of being notified of the letter.
An employer that provides an employee any more than 90 days
could be found to have failed to take reasonable steps and consequently
deemed to have constructive knowledge of unauthorized employment.
What if the employee is no longer employed
with the company?
You have no obligation under the final rule to act upon the
no-match letter if the employee is no longer employed with the
company. However, you should still try to contact him or her
to correct the W-2 records. In any case, you should document
your records with the information you relied upon in completing
the W-2 and the efforts you made to contact former employees.
You should keep such documentation for three years since the
employer is no longer employing the alien.
What if the no-match letter is sent to the
employee and not the employer?
The final rule applies only to no-match letters received by
the employer from SSA. However, once the employer becomes aware
of the existence of the letter, we recommend that it follow
the safe harbor procedure as soon as practicable.
How should I respond to no-match letters received
prior to Sept 14, 2007?
Employers should follow the instructions contained in the
no-match letter, which are steps 1 and 2, as outlined above
(checking the employer’s records and advising the employee
to resolve the no-match directly with SSA). Employers, however,
should consult with legal counsel prior to taking steps 3 and
4, as the regulations are unclear as to what affect it has,
if any, on old no-match letters. Re-verification and termination
of an employee based on a pre-September 14 no-match letter may
leave the employer liable for wrongful termination.
Practical Tips on Reducing the Number of Future
SSN Mismatches
Some employers have a large number of employees with SSN mismatches.
The new rule could result in a forced termination of all such
employees 93 days after receipt of the SSA no-match letter.
To avoid a sudden loss of a large number of employees, employers
should consider efforts to reduce the number of SSN mismatches
it receives each year.
- You may wish to participate in the Employment Eligibility
Verification Program (also known as “E-Verify”
or the “Basic Pilot” program), which is an Internet-based
system run by U.S. Citizenship and Immigration Services (USCIS)
in partnership with SSA. The E-Verify program is free to employers
and is now available in all 50 states. This program provides
an automated link to federal databases to help employers determine
work eligibility of new hires and the validity of their SSNs.
For more information on this voluntary program, see the DHS
website at www.dhs.gov/e-verify
or USCIS web site www.uscis.gov.
- Before you file your next annual wage report for the most
recent tax year, you should use SSA’s Social Security
Number Verification Service (SSNVS) prior to submitting Forms
W-2. This is a free and convenient way to verify that your
records match SSA records. However, SSNVS is not to be used
to screen job applicants, because a mismatch makes no statement
about a job applicant’s immigration status. The SSNVS
can be found at: www.ssa.gov/employer/ssnv.htm.
- You should ask your employees to check their Forms W-2 against
their social security cards and to inform you of any name
or SSN differences on the two. If the Form W-2 is incorrect,
you should correct your records and prepare Forms W-2c and
W-3c per above. If the social security card is incorrect,
you should advise the employee to request a corrected card
from the nearest SSA office.
- You should remind employees near the end of each year to
report to SSA name changes due to marriage, divorce or other
reasons. This is done by the employee using Form SS-5 along
with documentation of the name change. If an employee’s
name has changed, you should continue to use the old name
as it appears on the employee’s social security card
until the employee has obtained an updated card with the new
name. Using a new name on Form W-2 before the employee has
obtained an updated social security card will result in a
mismatch.
- When you hire a new employee, in addition to going through
the regular I-9 process, you should ask the employee to check
his or her social security card and inform you of the name
and SSN exactly as shown on the card. The employee is required
to furnish the SSN to you, but the employee is not required
to show the social security card.
- If the employee submits the social security card during
the I-9 process, make a copy so you have a record of exactly
how the name and number appear on the card.
- When entering the name on Form W-2, enter it exactly as
it appears on the social security card. However, do not use
Jr. or Sr. even if it appears on the card. Compound names
may be connected by a hyphen or space (do not join them into
a single word). For example, John R. Smith-Jones may be entered
“Smith Jones” in the last name field. It is especially
important to know the exact last name. If an employee provides
a name with a compound or multiple last names, question them
to determine which name is the beginning of the surname and
which (if any) is the middle name. If the social security
card contains a middle name, always complete the Form W-2
using just the middle initial.
- If you hire someone who does not have a social security
number (SSN), ask him or her to obtain one as soon as possible.
If you still don’t have an SSN when your W-2 report
is due, complete the account number field by entering “applied
for” in Box “d” of a paper form and all
zeroes in locations 3-11 of the RW record when filing electronically
or on magnetic media. If a job applicant or an employee has
lost his or her social security card, encourage him or her
to go to the nearest SSA to obtain a replacement.
- You should ensure that all SSNs you report are valid. Here
are some tips:
- A valid SSN has 9 digits. The first three digits should
never be 000, the middle two digits should never be 00,
and the last four digits should never be 0000.
- The first three digits should never be in the 800 or
900 series.
- If the social security card appears on its face to
be genuine, you should not question it. You are not expected
to be an expert on document fraud. Not all social security
cards look exactly alike. There are many slight variations
that have been issued over the years.
If you have questions
or would like more information, please contact any member of
DWT's immigration practice team, including:
This
advisory
is a publication of the Employer Services Department of Davis
Wright Tremaine LLP. Our purpose in publishing this advisory
is to inform our clients and friends of recent developments
in employment law. It is not intended, nor should it be used,
as a substitute for specific legal advice as legal counsel may
be given only in response to inquiries regarding particular
situations.
Copyright
© 2007, Davis Wright Tremaine LLP.
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