Social Security No-Match Update

The Department of Homeland Security’s (DHS) Social Security No-Match regulation looks as if it will remain on hold for at least a few more weeks. Reports indicate that a court injunction preventing implementation of the DHS’ No-Match regulation (for a discussion of the injunction prohibiting enforcement of the No-Match rule, see Ogletree Deakins’ October 12, 2007 E-Alert) will not be reviewed until March of 2009. In addition, there are also unofficial reports that the Obama Administration transition officials believe the President does not support the rule.

In summary, the proposed No-Match rule would require employers to follow a specific follow-up protocol in the 90-day period following receipt of a letter from the Social Security Administration (SSA) informing the employer that the Social Security numbers reported for certain employees on Form W-2 do not correspond with the names found in SSA’s records. Employers that follow the protocol would be entitled to a safe harbor from the No-Match letter being used against them in an enforcement action.

Although the No-Match regulation is not yet in effect, employers still face a dilemma as to how to treat a No-Match letter. In one California case, an employer received a No-Match letter and instructed affected employees to provide corrected Social Security information within three days. Indicating the three-day turnaround period was insufficient, an arbitrator awarded back pay and reinstatement to employees who were terminated for failing to timely provide corrected Social Security information. The case underscores the confusion and risks associated with No-Match letters and the need for employers to develop a clear No-Match policy and to follow new legal developments in this area. 

Note: This article was published in the January 2009 issue of the Immigration eAuthority.