DHS Regulation on No-Match Letters

August 2007

Each year, the Social Security Administration (SSA) notifies thousands of employers by letter that certain employees’ names and corresponding Social Security numbers provided on Forms W-2 do not match SSA records. A new Department of Homeland Security (DHS) regulation describes an employer’s obligations under the immigration laws, together with its options for avoiding liability after receiving what is commonly referred to as a “no-match” letter from the SSA. An employer can be in violation of the immigration laws by having “constructive” (as opposed to “actual”) knowledge that an employee is unauthorized to work. The rule sets out steps an employer may take that will be deemed by the DHS to be a “reasonable” response to receipt of a no-match letter. It would thereby eliminate the possibility that the no-match letter will result in an allegation that the employer had “constructive knowledge” of having hired an individual without proper employment authorization. The DHS rule does not prohibit an employer from following other steps in response to a no-match letter that would be considered reasonable by DHS, but the employer risks that the DHS would disagree. Essentially, the new rule describes “constructive knowledge” and specifies “safe-harbor” procedures.