The "No-Match" Letter

From our friends at Allen Matkins...

Significant Changes Announced To Employer's Obligations Upon Receipt of No-Match Letter

The Department of Homeland Security ("DHS") announced on August 10, 2007, its adoption of regulations identifying specific steps an employer should take as a "safe-harbor" upon receipt of a No-Match Letter from the Social Security Administration. Employers are encouraged to take immediate action and review and modify their No-Match Letter response procedures to comply with these recent changes. Failure to do so could result in a finding that the employer had "constructive knowledge" that the employee named in the No-Match Letter was an unauthorized worker, thereby exposing the employer to significant civil and criminal penalties.

A No-Match Letter is:

• a letter to the employer from the Social Security Administration stating that the combination of name and social security account number submitted on an employee's W-2 earnings report does not match the agency records; or
• a letter from the U.S. Immigration and Customs Enforcement Agency notifying the employer that the immigration-status document or employment-authorization document presented or referenced by the employee is not consistent with DHS records.

In the past, there has been uncertainty regarding how an employer should respond to a No-Match Letter. Now, employers who follow the Safe-Harbor Procedures are protected from being found to have constructive knowledge that an employee is an unauthorized worker. While employers are not required to follow the Safe-Harbor Procedures, the DHS warns that not doing so exposes the employer to the risk of being found to have constructive knowledge of unauthorized status. This carries with it considerable civil and criminal penalties.

The Safe-Harbor Procedures do not safeguard against liability where an employer has actual knowledge that an employee is an unauthorized worker.

The new regulations will take effect 30 days after publication in the Federal Register, which is expected shortly. Accordingly, employers should review and modify their No-Match Letter response procedures to the extent necessary to comply with these recent changes.