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Just last month, on August 10, 2007, the Department of Homeland Security ("DHS") issued new regulations requiring employers to take specific action if they receive "no-match" letters from the Social Security Administration ("SSA"), i.e., letters indicating that an employee's social security number provided on a W-2 does not match SSA records. These regulations were scheduled to go into effect on September 14, 2007 and a new set of no-match letters were to be sent to employers beginning on September 4, 2007. However, implementation has been, at least temporarily, halted by court order.
Under the new regulations, employers must reconsider how they respond to the SSA no-match letters. The regulations create a safe harbor for employers who receive such a letter, only if the employer complies with very specific requirements, such as review of its records, permitting the employee to correct the discrepancy, or completing a new I-9 form with different documentation, within very specific time frames. If the employee cannot correct the problem within those time frames, the employee must be terminated. An employer's failure to take these actions could mean liability for "constructive knowledge" of immigration violations, with potential civil penalties up to $10,000 per incident, as well as possible criminal sanctions.
On August 28, 2007, a coalition of labor unions and immigrant rights groups, including the AFL-CIO, the American Civil Liberties Union, and the National Immigration Law Center, filed suit in the United States District Court of the Northern District of California and petitioned Judge Maxine M. Chesney for issuance of a temporary restraining order. Plaintiffs assert, generally, that: DHS lacks the authority to create liability under the Immigration Control and Reform Act; issuance of an SSA no-match letter, which has its original purpose of correcting tax discrepancies, should not be a method of immigration enforcement; and that previous efforts by DHS to use SSA data for immigration enforcement have failed in the Senate.
On August 31, Judge Chesney issued an order temporarily restraining DHS from implementing the new regulations, finding the plaintiffs "have raised serious questions as to whether the new [DHS] rule is inconsistent with the statute and beyond the statutory authority of the [DHS] and the [SSA]." She also set an October 1, 2007 hearing date on the Plaintiffs' request for a preliminary injunction to stop implementation of the DHS regulations. Of course, ultimately, Plaintiffs are seeking a permanent injunction. It is expected that federal regulators will counter Plaintiffs' position by claiming that the rule is consistent with current law, is not harmful to U.S. citizens, and is an effective tool for monitoring immigration.
We will keep you apprised of developments regarding this issue as they evolve. If you have any questions about this ruling or for more information on how to ensure compliance with the law, please contact our Employment Law Group.
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