DHS plans crackdown on Social Security 'no-match' violations

By Allen Smith Jun 9, 2006
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Employers need to pay special attention to mismatch letters from the Social Security Administration (SSA) in light of the Department of Homeland Security’s (DHS) stepped-up enforcement of the Immigration Reform and Control Act and two rules—one proposed and one closer to implementation—announced on June 9.

The proposed rule on mismatch or “no match” letters from the SSA would grant employers that follow DHS-recommended steps a safe harbor but would penalize those that do not. The interim final rule on electronic storage of I-9 forms would provide cost savings to employers and facilitate DHS investigations, the department predicted in a release.

“Most businesses want to do the right thing when it comes to employing legal workers,” DHS Secretary Michael Chertoff said in the release. “These new regulations will give U.S. businesses the necessary tools to increase the likelihood that they are employing workers consistent with our laws. They also help us to identify and prosecute employers who are blatantly abusing our immigration system.”

Mike Aitken, director of governmental affairs for the Society for Human Resource Management, said that the rules likely would be published in the Federal Register early next week. Employers are uncertain how to respond to mismatch letters, he observed, adding that employers have been waiting for regulations on electronic storage of I-9 documents since the electronic storage law was enacted.

There will be a 60-day comment period, but the electronic storage regulation will become effective on an interim basis on publication.

Safe harbor floated

Out of about 250 million wage reports that the SSA receives each year, as many as 10 percent belong to employees whose names do not match their Social Security numbers (SSNs) on record, the DHS stated. When a worker’s SSN does not match the worker’s name on tax or employment eligibility documents, the federal government issues a no-match letter asking employers to resolve the discrepancy.

Under the new rules, employers would need to take steps in response to a no-match letter in order to qualify for the safe harbor provisions and avoid possible prosecution. The steps are:

  • Check the employer’s records to ensure that the discrepancy did not result from a typographical or similar clerical error.
  • Resubmit the information if a clerical error resulted in the discrepancy.
  • Ask the employee promptly to confirm that the employer’s records are correct if the discrepancy cannot be resolved.
  • Take steps to correct an error if the employer’s records are not right.
  • Ask the worker to pursue the matter personally with the relevant agency (such as contacting the SSA) if the employer’s records are correct.
  • Reverify the individual’s employment authorization without using the documents that were the subject of the no-match letter if the employer is unable to resolve the discrepancy within 60 days of receipt of the no-match letter.

The DHS provided that if an employer is unable to resolve the no-match, the employer then may choose to fire the worker “or run the risk that DHS will find that the employer had constructive knowledge of employing an alien unauthorized to work in the U.S.”

Failure to take reasonable steps necessary to clarify employment eligibility “could subject the employer to possible penalties,” the DHS cautioned.

The employer should not fire a worker upon receiving the mismatch letter. In fact, a no-match letter states that “this letter does not imply that you or your employee intentionally provided incorrect information about the employee’s name or SSN. It is not a basis, in and of itself, for you to take any adverse action against the employee. Any employer that uses the information in this letter as a pretext for taking adverse action against an employee may violate state or federal law.”

When an employer alerts a worker about a mismatch, one of two things usually happens, according to John Gay, senior vice president of government affairs and public policy with the National Restaurant Association. The employee either disappears or comes back. If he or she returns, the employee shows that the numbers were transposed or presents a Social Security card with a different number, which starts the process again, he remarked.

DHS wants direct access to SSNs

The DHS noted that it does not have direct access to the SSNs through the SSA’s database. Instead, a DHS Immigration and Customs Enforcement (ICE) agent has to submit a written request to the SSA asking for the information. But the DHS wants easier access to facilitate its enforcement efforts.

It’s the bad actors that Chertoff is particularly intent on identifying through mismatches, he says. He recalled that ICE acted on a tip in April that IFCO Systems North America was employing illegal immigrants and discovered that more than 50 percent of the company’s workforce had invalid or mismatched SSNs, he said in an April 20 speech after the enforcement operation against the company. Chertoff then shared his hope that immigration reform “would grant the DHS some carefully crafted access to Social Security no-match data so that we can detect those employers who are systematically employing workers, despite the fact that there’s an obvious mismatch between the names and the SSNs in question.”

He emphasized that the IFCO enforcement action was based on a tip, and he used the case as a reason for supporting immigration reform legislation that would give his department more tools to combat illegal immigration.

“What we need to do, and the reason we’re asking Congress to pass … legislation, is we need to be able to go proactively and spot that kind of widespread abuse and not really just have to wait for tips,” he said. This call for legislation to give ICE agents better access to no-match data also was highlighted in the DHS release on its proposed and interim rules.

Sandra Boyd, vice president, human resources policy, with the National Association of Manufacturers, told HR News that it was “a little unclear how the DHS had the ability to give guidance” on the no-match letters because the letters are not issued by the DHS. “It’s strange to me, but maybe it will be made clear.”

Electronic storage

Boyd said that the interim final rule on electronic storage of I-9 documents will be “a good thing,” saying it will help employers prepare for electronic verification, another piece of proposed immigration reform. Boyd added that the electronic storage of I-9s also might be a step toward employers having to follow only one verification system. Under current immigration reform proposals, employers would have to comply with the I-9 requirements as well as electronic verification through an expansion of the Basic Pilot Program. Boyd favors moving toward an elimination of paper-based I-9s.

The interim rule on electronic storage is in response to a law signed by President Bush Oct. 30, 2004, and that took effect April 28, 2005, which permitted electronic versions of I-9 documents.

Electronic storage would be optional, Gay noted, predicting that the electronic storage interim rule “shouldn’t be controversial. It should do nothing but help.”

The DHS predicted in its release that employers will save money by storing forms electronically and said electronic forms are less likely to contain errors. Moreover, the DHS anticipates that electronic storage “will enhance ICE’s ability to perform its worksite enforcement responsibilities” because electronically retained forms are more easily searchable, which is important for verification, quality assurance and inspections.

Allen Smith, J.D., is senior legal editor for HR News.

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