Calif. Court Blocks New Social Security “No Match” Rule Pending Trial Judgment

A California federal judge issued a preliminary order Oct. 10 that continues to block the U.S. government from enforcing a new rule targeting illegal workers that would punish employers if they do not take action after receiving social security “no match” letters. The ruling extends that prohibition indefinitely until the court issues a final decision in the case against the government.

The preliminary injunction handed down by the United States District Court for the Northern District of California comes as a result of a lawsuit filed by the AFL-CIO and other labor and immigrant rights organizations in August against implementation of the Department of Homeland Security’s (DHS) Final Rule entitled “Safe-Harbor Procedures for Employers Who Receive a No-Match Letter.” (AFL-CIO, et al. v. Chertoff, et al. (N.D. Cal. Case No. C 07 4472 CRB))

In the lawsuit, the groups charge that the misguided rule violates the law and workers’ rights, imposes burdensome obligations on employers, and will cause discrimination against workers who are perceived to be immigrants.

By way of background, the law prohibits employers from hiring workers unless they are authorized to work. If an employer is found to have “knowingly” employed a worker who did not have proper authorization, the employer is subject to criminal and civil penalties.

The regulations define “knowing” to include both actual knowledge, such as when an employee tells the employer he is not authorized to work, and “constructive knowledge,” such as when an employer receives information from a third party that certain employees are using false documents to work and the employer does not follow up to verify the employees’ status.

The new regulation makes several key changes to the law. The first is to add to the definition of what explicitly constitutes “constructive knowledge” of employing an unauthorized worker. The definition now includes receipt of what is known as a “no-match” letter from the Social Security Administration (SSA) or DHS. A “no-match” is letter essentially saying the person’s identity does not match agency records. These letters include: “(1) written notice to an employer from SSA (e.g. an “Employer Correction Request”) that the combination of name and social security number submitted for an employee does not match SSA records or (2) written notice from DHS that the immigration status document or employment authorization document presented or referenced by the employee in completing Form 1-9 was assigned to another person, or that there is no agency record that the document was assigned to anyone.”

According to the new rule, if an employer receives one of these “no-match” letters and does not take “reasonable” steps to resolve the discrepancy and terminate any unauthorized workers, receipt of those letters may be used as evidence that the employer had “constructive knowledge” that he or she employed an unauthorized worker. An employer who is found to have this “constructive knowledge” of hiring an unauthorized worker is then subject to criminal and civil penalties.

The new regulation goes on to provide a “safe harbor” from a finding of “constructive knowledge” by describing what it considers the “reasonable” steps an employer should follow upon receiving a “no-match” letter. If the employer follows these procedures he can avoid a finding of “constructive knowledge” of employing an authorized worker merely due to the fact of having received the “no-match” letter. A letter from DHS describing these procedures was to have been included with the no-match letters starting in September 2007, but the injunction was issued blocking the mailing.

The DHS procedures give employers a total of 93 days from the date the letter was received to clarify the mismatch by providing valid information. If the discrepancy cannot be resolved by then, employers might be required to fire the worker or risk prosecution for knowingly hiring illegal immigrants.

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