ICE Provides Final “Safe Harbor” Guidance to Employers with SSA “No-Match” Letters, but Rule Has Little Immediate Impact

Social Security Administration (SSA) “no-match” letters – letters received by employers from SSA notifying them that their reported SSA earnings do not match those of SSA records -- have been a problem for employers for years. Responses to such letters have historically been mixed, because employers in many cases feared discrimination claims or simply did not know how to respond.

In an effort to fix this problem, in August 2007, the Department of Homeland Security (DHS) issued a “Final Rule” setting forth a safe harbor procedure for employers to follow if they received a “no-match” letter.  Citing numerous flaws in the procedures that resulted in the “Final Rule,” DHS was promptly sued.  DHS ultimately addressed these concerns in a Supplemental Proposed Rulemaking in March 2008.  Effective October 28, 2008, DHS has now finalized the Supplemental Proposed Rule, putting into effect the “safe harbor” procedures first announced last August.  The purpose behind these rules is to protect employers who follow these guidelines after receipt of a “no-match” letter from a finding that they had “constructive knowledge” (reason to know) that an employee was unauthorized to work.

For the present, however, it appears that the rulemaking will have little impact on how employers do business for two reasons: 

1. an injunction has been issued by a federal court in California that prohibits DHS from implementing its “no-match” rule.  This injunction remains in place nationwide unless and until the court lifts it; and
2. despite issuing hundreds of “no-match” letters in past years, it appears that the SSA has issued no “no-match” letters this year and does not intend to do so until the federal lawsuit is settled.