No Solution For No-Match Letters - What To Do In Uncertain Times

Robin Foret
February 10, 2009 — 1,663 views  
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Recent events have created confusion for employers trying to correct problems identified in the Social Security Administration No-Match letters, as well as to comply with Form I-9 requirements.  Currently, the regulations on these topics are in a state of flux, making compliance extremely difficult.  A preliminary injunction remains in place that prohibits enforcement of the Department of Homeland Security's final regulations on employer responses to No-Match letters.  Moreover, President Obama has delayed the implementation of the new Form I-9 until at least April 3, 2009. 

A basic understanding of the current legal requirements, and the status of newly implemented regulations are essential for employers.  Not only do these regulations carry criminal and civil penalties for non-compliance, but employers who become over zealous and incorrectly terminate employees based on No-Match letters and/or I-9 documentation problems risk violation of discrimination laws designed to protect immigrants.  

BASIC PROHIBITION ON HIRING UNDOCUMENTED WORKERS

It is unlawful to hire, or to continue to employ, an alien who is not authorized to work in the United States.  Civil and criminal penalties may be imposed upon employers who have actual or constructive knowledge that employees are undocumented (not authorized to work in the United States).  Every employer must verify employment authorization and the identity of every employee.  This is ordinarily accomplished through the process of I-9 verification. See 8 U.S.C. §1324a. 

An employer that has attempted to comply with this law in good faith is generally not held accountable if it is later determined that an individual's documentation is false.  The employer must, however, make a reasonable effort to review and make sure that documents appear credible and reveal the true identity of the individual applying for a job.  Some exceptions apply to certain employees hired before November of 1986 and when documentation is supplied by a state employment agency. See 8 U.S.C. §1324a. 

NATIONAL ORIGIN DISCRIMINATION UNDER IRCA

Although an employer must hire only those authorized to work in the United States, the employer may not discriminate against individuals based on their national origin status.  Specifically, the Immigration Reform and Control Act of 1986 ("IRCA") prohibits discrimination on the basis of national origin and/or non-citizen status.  Therefore, if an employer refuses to accept valid documentation or overreacts by requiring more onerous procedures for non-citizens as compared to citizens during the hiring process, this may result in discrimination under IRCA. 

If an employer terminates an employee because the employee is suspected of being an undocumented worker, but it is later discovered that the individual is authorized to work in the United States, the employee may have an IRCA discrimination claim.  Employers must make a reasonable effort to request proper I-9 documentation, and to provide applicants and employees an opportunity to correct any uncertainty related to proper documentation. 

HOW DOES THE NO-MATCH LETTER AFFECT THESE RULES?

Employers sometimes receive what is called a "No Match" letter from the Social Security Administration ("SSA") indicating that the social security number and the name provided do not match according to the SSA database.  The SSA may also send a "Notice of Suspect Document" that casts doubt on the employee's ability to work in this country.  Arguably, these letters may create constructive knowledge on the part of the employer that the individual identified is not authorized to work in the United States, even if the employer previously received documents that appeared to be valid.  Employers must take reasonable steps to verify that valid documentation exists, and if the employee is determined to be undocumented, terminate the employment relationship to avoid civil and criminal penalties.

In an attempt to reconcile these confusing and conflicting rules, the Department of Homeland Security ("DHS") announced Safe Harbor Procedures for No-Match letters.  The procedures allowed a total of 90 days following the receipt of a No-Match Letter for the employer and employee to attempt to resolve the discrepancy.  The intent was to allow employers to avoid the possible penalties associated with retaining the employees for a period of time until the problem could be investigated and in some cases, resolved.  Additionally, employers who followed Safe Harbor Procedures would arguably be permitted to terminate these employees after the expiration of the 90 day period without fear of a discrimination complaint. 

In October of 2007, however, a California federal district court issued an injunction to stop the No-Match letter process.  Among the reasons were: (1) evidence existed that the SSA database system was inherently inaccurate and might improperly identify employees who were working in the country legally; and (2) the DHS lacked authority to make a finding that following the Safe Harbor Procedures would automatically result in a finding that no discrimination occurred.  Although the injunction has not yet been lifted, on October 28, 2008, the DHS issued a supplement to the Safe Harbor Procedures which contained some modifications designed to address the concerns raised by the federal court. 

Currently, the DHS has filed a motion to vacate the court's preliminary injunction that continues to prevent enforcement of the Safe Harbor Procedures.  The federal court has requested briefing on these issues, and it appears that this matter will remain unresolved until at least March of 2009.  Accordingly, these procedures cannot be relied upon at the current time.   

HOW SHOULD NO MATCH LETTERS ALREADY RECEIVED BE HANDLED?

The SSA has temporarily stopped sending No-Match letters until the federal court case can be resolved.  Previously sent No-Match letters, however, may still support a finding of constructive knowledge that the employees identified are undocumented.  Moreover, until the federal court injunction is lifted, initiating the 90 day Safe Harbor Procedures after receiving a No-Match letter would likely be insufficient to insulate an employer from civil and/or criminal liability for hiring and/or retaining undocumented workers.

At the same time, taking action to terminate employees solely on the basis of a No-Match letter may lead to discrimination claims if it is ultimately determined that the employee was in fact working legally in the United States.  To address No-Match letters, the safest approach is to allow employees some reasonable period of time to produce alternative documents that comply with the new I-9 Form requirements, or to otherwise correct inaccurate records with the SSA.  The employer need not provide the employees with a time period as long as 90 days to correct paperwork.  Until the injunction is lifted, a shorter time period of just a few of weeks or 30 days would be appropriate.  

NEW I-9 FORMS

In December of 2008, the U.S. Citizenship and Immigration Services ("USCIS") announced a final rule revising Form I-9 to be used for all newly hired employees and for those employees being re-verified.  One of the biggest changes under the new rule is that employers will no longer be able to accept expired documents.  There have also been changes to the list of documents that may be accepted to verify both identity and work authorization.  Initially, the new form was to become effective on February 2, 2009.  President Obama has delayed the effective date for the new I-9 Form for 60 days (until April 3, 2009) so that comments concerning the new form can be evaluated.

Until the new I-9 Form becomes effective, employers should use the former version revised as of June 5, 2007.  Use of the new Form I-9 before its effective date and/or the refusal to accept documents listed on the old form could violate IRCA discrimination laws.  

STEPS TO FOLLOW TO AID COMPLIANCE

Check Internal Records - employers should check internal records to make sure that their own internal records are accurate (name spelling, social security number listed, etc.).  Any error should be corrected promptly.

Notify Employees of No-Match Status - notify employees who are the subject of a No-Match letter that the SSA has identified a discrepancy between the social security number and the name provided.  At the current time, employees should be given a short time period such as 15 or 30 days to correct the problem.  They should also be told that they may take time off from work to visit their local Social Security office if necessary without fear of retaliation.  If the injunction is lifted and the Safe Harbor Provisions instituted, employers may give employees 90 days to correct documents without fear of violating Section 1324a.

Re-Verification - I-9 Forms - if no clerical error exists, employees should be asked to present valid I-9 documents (which are different than those identified in the No-Match letter).  The documents should comply with I-9 Form requirements (the older form for now, and the new I-9 Form when, and if, the current prohibition is lifted), and should prove the individual's authorization to work in the United States and the identity of the individual (a picture is best). 

The information contained in this article is not designed to address specific situations, and does not include rules and regulations that apply to all states.  If you have questions concerning this topic, you should consult with legal counsel of your choice to obtain advice on various fact specific matters.

Robin Foret

The Foret Law Firm

Robin Foret practices in the areas of employment law, commercial litigation and specialty insurance defense claims. She handles a variety of employment matters such as theft of trade secrets, breach of employment agreements, non-competition agreements, wage and hour issues under the Fair Labor Standards Act (FLSA), discrimination and harassment issues under Title VII of the Civil Rights Act of 1964 (Title VII) and the Texas Commission on Human Rights Act (TCHRA), the Americans with Disabilities Act (ADA), Family Medical Leave Act (FMLA) issues, and the Sarbanes-Oxley Act (SOX). Robin has handled a wide variety of employment law matters for employers, as well as for executive-level employees, before agencies, and state and federal courts.