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In an earlier employment alert titled
Ignore Social Security “No-Match”
Letters at Your Peril!, we told you about new regulations
promulgated by the Department of Homeland Security (“DHS”) creating a
safe harbor procedure for employers in response to a letter from the
Social Security Administration (“SSA”) notifying them that certain
employees’ names and social security numbers do not match SSA’s records.
These letters are commonly called “no-match letters.” Many groups were
upset with the new regulations, and as a result of litigation filed in
California, the regulations are temporarily on hold.
The new DHS regulations say an employer who ignores a no-match letter
can be found to have constructive knowledge that it is employing an
unauthorized worker. The new regulations establish procedures employers
can follow to take advantage of a “safe harbor” from penalties when
employees are not authorized to work in the United States. Compliance
with this safe harbor provision requires employers to get specific
documentation from the employees in question within a limited, 93 day
timeframe. If the employees cannot provide the required documentation,
employers must terminate their employment to avoid potential DHS
penalties. The new DHS regulations were scheduled to take effect on
September 14, 2007. Reportedly, the Social Security Administration had
prepared 140,000 new no-match letters with inserts explaining the new
requirements.
The new regulations caused concern for employers. In August, the
AFL-CIO, American Civil Liberties Union, and California labor
organizations sued the federal government. The plaintiffs argued that
the attempt to crack down on illegal immigration via the no-match
letters would cause substantial administrative costs for employers and
would cause some employers to fire employees who are legally entitled to
work in the United States. The suit alleged that implementation of the
regulation would cause "substantial, immediate, and irreparable" harm.
On August 31, 2007, a federal judge in California entered a temporary
restraining order preventing the government from implementing the new
DHS regulations. Another judge considered the matter on October 1, 2007
and extended the temporary restraining order for another 10 days while
he prepares to rule on whether the regulations should be suspended for a
longer period of time. His comments during the hearing suggest he is
leaning towards ruling against the government. The judge said, “[i]t is
clear to me at this point there would be irreparable harm to the
plaintiffs.”
Consequently, the future of the new DHS regulations is unclear. The
press has reported that SSA is holding onto approximately 140,000
no-match letters while it awaits a final ruling from the judge. It is
important to remember that the current legal dispute does not affect the
existing SSA no-match policy, and SSA may still send no-match letters.
Prudent employers should pay careful attention to the newspapers and
future employment alerts for updates. If the new regulations do take
effect, employers should consult with counsel to establish procedures
for dealing with the new no-match letter regulations.
For more information, contact
Susie Gibbons at 919.783.2813 or
sgibbons@poynerspruill.com.
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