Homeland Security Issues New Rules to Tighten Employers’ Liability for Employment Verification

The Department of Homeland Security (DHS) announced new rules designed to strengthen enforcement of existing federal law on hiring of illegal immigrants. Of immediate interest to retailers are new rules on what employers must do if they receive an Employer Correction Request (no-match) letter from the Social Security Administration (SSA). A few key points:

·         The current no-match rule does not change. SSA will continue to check annual batches of W-2 forms and send no-match letters when it cannot match Social Security numbers to individual accounts. SSA guidance, which accompanies these letters, on how to correct the errors does not change. However, the no-match letters for tax year 2006 will be accompanied by a letter from the U.S. Immigration & Customs Enforcement (ICE) telling employers how to respond to the no-match notice.  

·         What is new is how DHS will use the no-match letters. SSA considers no-match letters simply a matter of information for employers. DHS will now consider no-match letters as evidence, for enforcement purposes, that the employer had “constructive knowledge” that an employee could be in the U.S. illegally. SSA is prohibited by law from sharing no-match information with DHS, so Homeland Security will not be able to take action based on it.  

·         DHS has set up a safe harbor to protect employers from enforcement action, which could include civil and criminal penalties. The safe harbor consists of several actions an employer can take to resolve the mis-match. These include immediately checking the accuracy of employment records and asking the employee to confirm the accuracy of employment information or resolve the discrepancy with SSA. Employers should be sure to follow SSA guidance and ICE information that comes with the no-match letter and verify the employee’s information through the Social Security Number Verification Service. Finally, employees may be asked to complete new I-9 forms and present a photo identification document.

DHS indicated it will in the future issue rules requiring federal government contractors and vendors to use the Basic Pilot electronic verification program, now renamed E-Verify, and to reduce the number of documents that will be acceptable to confirm the work eligibility of employees.

In summary, retailers who do not receive no-match letters from SSA after submitting W-2 forms should have little need for concern. However, those who do receive no-match letters would be well-advised to resolve the matter immediately. A DHS fact sheet is available at www.dhs.gov/xnews/releases.