On Friday, August 10, 2007, the Department of Homeland Security ("DHS") announced amended regulations for employers who receive a no-match letter from the Social Security Administration ("SSA") or a letter regarding employment verification forms from DHS. The new rules were published in the Federal Register on August 15, 2007, and will become effective on September 14, 2007.
Every year employers are required to file wage reports with the SSA, listing employee names and social security numbers ("SSN"). Each year, about four percent of the 250 million wage reports reveal discrepancies between the employee's name or the corresponding SSN that do not match SSA records. When this occurs, the SSA sends out a "no-match" letter, normally beginning in March or April of each year for the preceding calendar tax year.
Verify within 30 days that the mismatch was not the result of a record-keeping error on the employer's part. If so, correct and communicate to the SSA the correct information.
If not resolved at Step 1, notify the employee and request that the employee confirm the accuracy of employment records within 90 days of the date of the receipt of the no-match letter. This may include the employee resolving the issue with SSA directly.
At the end of the 90-day period, the employer will have 3 days to complete a new I-9 form for the employee. Complete the new I-9 form without using the questionable SSN, and instead using documentation presented by the employee that conforms with the I-9 document identity requirements. Attach the new I-9 form to the original I-9 and keep the I-9 documents in your records for the retention period required (3 years after date of hire, or 1 year after date of termination, whichever is longer). We recommend that you maintain your Form I-9 documents in a separate file from your individual employee personnel file.
Employers should follow this same procedure when a letter from DHS is received stating that an employee's immigration or work authorization document is not valid. What an employer cannot do is simply ignore the problem. If an employer does nothing to resolve the mismatch or doesn't act in good faith, the employer will be liable for employing an unauthorized worker. An employer would then face stiff penalties and sanctions.
DHS has placed a high priority on worksite enforcement. Arrests for criminal violations have increased from 24 in FY 1999 to a record 716 in FY 2006. There have been 742 criminal arrests since the beginning of FY 2007 (through July 31, 2007). In coming months, additional enforcement measures will be implemented. These include a new I-9 regulation reducing the number of acceptable documents to establish identity and eligibility for employment, regulations increasing civil money penalties for violations by approximately 25 percent, continued and increased use of criminal sanctions for knowingly employing unauthorized workers, and requiring all federal contractors or vendors to enroll in E-Verify, the Federal Electronic Employment Verification System.
The SSA is not changing its procedures for issuing no-match letters, and SSA guidance on how to correct SSA records remain unchanged. No-match letters for the Tax Year 2006 issued by the SSA will be accompanied by a letter from U.S. Immigration and Customs Enforcement ("ICE") informing employers how to respond to the no-match letter. From a practical standpoint, letters for Tax Year 2006 should have already been sent out this past March or April. This means that employers may not see the ICE information letter until letters for Tax Year 2007 are sent out next year.
Employers who suspect they have unauthorized employees in their workforce may wish to begin a process to re-verify the SSN of all employees. By doing so, an employer could minimize the business disruption when the employer needs to terminate employees who cannot present valid work authorization documents after the 90-day receipt of a no-match letter period expires.
This is a brief summary of the new regulation. Click here for a more detailed analysis and recommendations for avoiding possible legal liability.