Archived News:

Implementation of Final SSA/DHS No-Match Rule Currently on Hold Pending the Outcome of Litigation in a Federal District Court Case

On August 15, 2007, the Department of Homeland Security (DHS) published a Final Rule setting forth the circumstances under which an employer may be charged with constructive knowledge that it employs unauthorized workers based on the employer’s receipt of a No-Match letter from the Social Security Administration (SSA).

The SSA regularly compares employee names and social security numbers provided by employers on W-2 forms to data contained in the SSA’s records.  When a W-2 fails to match the SSA’s information, the SSA notifies the employer of that fact in what is commonly referred to as a “No-Match” letter.  There can be any number of reasons leading to a No-Match letter, from simple typographical error to the submission of knowingly false information.

The DHS Final Rule entitled “Safe-Harbor Procedures for Employers Who Receive a No-Match Letter” establishes that an employer may be deemed to have known that it employs illegal workers if the employer fails to take certain steps detailed by the rule after receiving a No-Match letter.

The Final Rule was originally scheduled to go into effect on September 14, 2007.  However, on August 31, 2007, the U.S. District Court for the Northern District of California issued a temporary restraining order (TRO) enjoining implementation of the Final Rule for the time being.  The case is AFL-CIO, et al. v. Chertoff, et al. (N.D. Cal. Case No. 07-CV-4472-CRB).  The TRO also temporarily enjoined the SSA from delivering packets to thousands of employers containing No-Match letters based on 2006 W-2 forms and a DHS guidance letter concerning the Final Rule.  The SSA had planned to begin sending those packets in early September 2007, but it must now wait until the TRO is lifted. 

The TRO preventing implementation of the Final Rule will remain in effect until at least October 1, 2007.  On that date, a hearing is scheduled to take place concerning plaintiffs’ request for a preliminary injunction, which, if issued, would further prevent implementation of the Final Rule pending the federal court’s determination of its lawfulness. 

For more information on this issue as it unfolds or on employers’ obligations concerning No-Match letters generally, please contact Mike Gallagher, Sue Sheeran or Doug Witte.  General information is also available on the SSA’s website at www.ssa.gov.

Go to In The News

This page is intended to provide general information about various legal issues and developments.  It is not intended to be a complete list of all recent legal developments.  This page does not constitute legal advice and should not be relied upon in dealing with specific factual or legal matters.