September 27, 2007

On Friday, August 31, a federal judge blocked the government’s implementation of a new regulation addressing how employers should respond to so-called no-match letters issued by the Social Security Administration. U.S. District Judge Maxine Chesney granted a nationwide temporary restraining order sought by the AFL-CIO and affiliated unions to keep the government from sending the no-match letters. SSA previously announced that an initial wave of 140,000 no-match letters would be issued between September 14, 2007, and November 9, 2007. The restraining order remains in effect until October 1, 2007, when another federal judge will determine whether to leave the injunction in place pending a trial on the issues raised by the plaintiffs.

On August 10, the Department of Homeland Security, through its agency, U.S. Immigration and Customs Enforcement, announced new final regulations that affect how employers should respond to no-match letters issued by SSA as well as to certain notices issued by DHS (see our August 13, 2007 Immigration Alert concerning the new regulations). Those regulations were scheduled to take effect on September 14, 2007.

How Does This Affect Employers?

Under federal immigration laws, employers who knowingly employ individuals who are not lawfully authorized to work in the United States face potential civil and even criminal liability. For many employers, there is significant uncertainty as to whether a particular set of facts places the employer on notice that a worker is not eligible for employment. The new regulation describes two increasingly common situations that, as a result of the regulation, will be deemed to provide employers with constructive knowledge that a worker is not authorized for lawful employment. The regulation also explains a process by which employers can respond to this knowledge and benefit from safe harbor provisions to avoid potential sanctions. The injunction blocks implementation of the new regulation.

The practical effect of the federal court injunction is to stop SSA from issuing the initial wave of 140,000 no-match letters. The injunction also means that the safe harbor component in the new regulation does not have full legal effect. However, in our opinion the injunction should not change how an employer responds to Social Security no-match letters or notification, and certainly does not mean that employers are free to ignore such letters pending the outcome of the litigation. In publishing the final regulation, the government has clearly announced its policy on Social Security no-match letters. The only question is whether that policy will have the force of law, as a regulation, or be implemented as a matter of executive branch and prosecutorial policy and discretion. Accordingly, the regulation reflects the government’s view on what steps taken by an employer will be viewed as a reasonable response to the notification of a Social Security number discrepancy. Employers that take steps that the government views as reasonable are less likely to face a charge of knowingly employing an unauthorized worker. Conversely, employers whose reactions to notification of a Social Security number discrepancy are not seen as reasonable by the government will presumably be at greater exposure to investigation and potential charges.

Morgan, Lewis & Bockius will continue to monitor this subject and will update you with any new information as it becomes available. If you have any questions about any of the issues raised in this Morgan Lewis Immigration Alert, please contact:

Eric S. Bord
202.739.6040
[email protected]

A. James Vázquez-Azpiri
415.442.1343
[email protected]

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