Executive Summary
On October 7, 2009, the Department of Homeland Security ("DHS") formally rescinded the "no-match" rule. This rule enabled Social Security Administration ("SSA") no-match letters to be used as an enforcement tool to identify unauthorized workers. The final rule was enjoined prior to implementation and never went into effect. After further DHS review, the agency decided to rescind the rule and focus its enforcement efforts relating to unauthorized workers on other programs, including E-Verify and ICE Mutual Agreement Between Government and Employers ("IMAGE"), among others. This decision is effective November 6, 2009.
Detailed Analysis
The no-match rule, promulgated in August 2007, subjected employers to potential liability upon receipt of a no-match letter from the SSA stating that an employee's name and Social Security Number ("SSN") did not match SSA records. The rule also established certain safe harbor provisions for employers who followed specific guidelines to address SSN discrepancies. A few months after the rule was promulgated, it was disputed in court and preliminarily enjoined. In light of these events, implementation was delayed. There was uncertainty as to whether the rule would be implemented thereafter. Almost two years later, after DHS examined this matter in more detail, the agency decided to formally rescind the rule.
Although the no-match rule has been formally rescinded, employers in receipt of no-match letters must continue taking reasonable steps to resolve SSN discrepancies. Receipt of a no-match letter, when considered with other probative evidence, remains a factor that may be evaluated in the totality of circumstances and under certain circumstances, may support a finding of constructive knowledge of employing unauthorized workers. Upon receipt of a no-match letter, employers should be diligent in resolving the matter by taking the following actions:
· Examine their own records for clerical errors to ensure the no-match was not an administrative oversight;
· Inform the relevant employee of the no-match letter and request that the employee review the information;
· Allow the employee a reasonable period of time (14- 90 days) to resolve the no-match issue with SSA; and
· Follow-up with the employee at the end of this time period to confirm the issue has been resolved or employee is in the process of doing so.
Employers should request reliable evidence that the no-match issue has been resolved and document the prudent steps they have taken. If reliable evidence is not provided, employers should examine the totality of the circumstances and determine whether termination is necessary. It is important that all employees are given the same time frame to resolve no-match issues to avoid discrimination claims.
Should you have any questions, please do not hesitate to contact your regular Hall Render attorney or:
Michael L. Kim at 317-977-1418 or
mkim@hallrender.com
Natalie L. Dressel at 317-977-1481 or
ndressel@hallrender.com
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