Each year, employers file a Wage and Tax Statement (Form W-2) with the Social Security Administrator (“SSA”) and the Internal Revenue Service to report how much they paid their employees and how much they deducted in taxes from employees’ wages throughout the year.  In the past, Social Security has sent a “no-match” letter when the names or Social Security numbers listed on the employer’s Form W-2 do not match Social Security records.  The letter’s purpose was to notify workers and employers of the discrepancy and to alert workers that they are not receiving proper credit for their earnings, which can affect retirement or disability benefits administered by SSA. 

 On  August 15, 2007, the Department of Homeland Security (“DHS”) promulgated a final rule titled “Safe-Harbor Procedures for Employers Who Receive a No-Match Letter” from SSA or a letter regarding employment verification from DHS.  This rule would have allowed the Immigration Custom and Enforcement Agency (“ICE”) to use an employer’s failure to act after  getting a no-match letter as evidence that the employer had “constructive knowledge” of an employee’s lack of authorization to work.  Employers found to have such “constructive knowledge” could face civil fines under the Immigration and Naturalization Act.     In response to the rule’s broad implications, the AFL-CIO filed a lawsuit in the U.S. District Court for the Northern District of California in August 2007.  On October 15, 2007, that court issued a preliminary injunction against the Department of Homeland Security, blocking the rule’s enforcement. On October 28, 2008, the DHS again issued a “final rule” on “no-match” letters to address specific deficiencies, although did not much differ from the earlier rule, and the procedures remain basically the same.  Therefore the October, 2008 rule was also challenged and the U.S. District Court for the Northern District of California ruled that DHS would remain enjoined.

 The SSA is still sending no-match letters to employers, while the litigation continues.  Additionally, the Social Security “No-Match” process, like many other policy initiatives of the Bush administration, will be reviewed by newly appointed officials at DHS and other implicated federal agencies.  The Obama administration will have to decide whether to continue to defend against the federal court lawsuit and to persist in the efforts to implement the final rule, or  perhaps to abandon the no-match process all together.

 So what steps should employers take to ensure compliance with I-9 mandates, while adhering to the anti-discrimination laws under Title VII?  At a minimum, treat all employees the same by implementing and following a clear and consistent policy for handling no-match letters; promptly inform the employee of receipt of letter and ask that he/she take efforts to clear up the inaccurate information; and keep good records of the steps taken to comply with the law.