Department of Homeland Security Issues Final Regulations on Social Security No-Match Letters
August 24, 2007
UPDATE: On October 10, 2007 Judge Charles R. Breyer of the U.S. District Court for the Northern District of California granted a motion for a preliminary injunction, preventing the Department of Homeland Security ("DHS") from enforcing its new regulations regarding social security no-match letters. The regulations provide that employers who receive no-match letters from the Social Security Administration ("SSA") and fail to comply with a series of "safe harbor procedures" can face criminal and civil penalties for employing unauthorized workers. Judge Breyer held that "plaintiffs have raised a serious question whether the rule is arbitrary and capricious." The next step is for the Court to hold a full evidentiary hearing and determine whether a permanent injunction should be issued.
UPDATE: On August 31, 2007, a federal court in California granted a temporary restraining order preventing the Department of Homeland Security from implementing the new regulations on September 14th as scheduled, and preventing the Social Security Administration from beginning to send no match letters including the Homeland Security guidance on the regulations. A hearing date on the injunction is set for October 1, 2007.
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As we advised in our Alert dated August 24, 2007, The Department of Homeland Security ("DHS") recently published its finalized regulations entitled "Safe Harbor Procedures for Employers Who Receive a No-Match Letter." The Social Security Administration ("the SSA") is required to send no-match letters to employers notifying them that the employee information submitted to it by the employer does not match the agency's own records. The new regulations outline a series of steps that employers should take in response to receiving a no-match letter, and state that employers that fail to take these steps can be imputed with "constructive knowledge" that the employee does not have proper employment authorization. Employers who are "knowingly" employing individuals without proper authorization are subject to criminal penalties and civil sanctions up to $10,000 for each unauthorized employee. The new regulations, originally scheduled to take effect on September 14, 2007, must now await a determination by the court on whether a permanent injunction will be granted.