Ignore no match/mismatch letters at your own risk

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For years, employers have been confused concerning what actions, if any, to take upon receiving no-match or mismatch letters from the U.S. Social Security Administration (SSA).

Some employers did not take any action in response to such letters out of fear that their actions would be viewed as unlawfully discriminatory against employees based upon nationality, race, ethnicity or immigration status under state and federal employment and immigration laws. Other employers took action, sometimes drastic, in an attempt to avoid the conclusion under the U.S. immigration laws that they knowingly continued to employ foreign nationals who were not authorized to work in the United States.

These no-match/mismatch letters, which notify employers of discrepancies that exist between SSA’s database and employee information provided to SSA by an employer, were historically only designed by the SSA to ensure that employee earnings were accurately credited to the proper account. The letters, which SSA began issuing to employers in 1993, come in varying forms, but all generally inform the employer of the names and/or SSNs of employees that could not be matched to SSA records.

The letter itself states that it is “not a basis, in and of itself, for [the employer] to take any adverse action against the employee, such as laying off, suspending, firing, or discriminating against any individual who appears on the list” and that the letter “makes no statement about [the] employee’s immigration status.” However, in light of recent enforcement actions against employers and regulations proposed by the U.S. Department of Homeland Security (DHS) last year, it is obvious that the DHS is going to rely upon such letters in certain circumstances to prove that employers are knowingly employing illegal workers and violating U.S. immigration laws.

In June of last year, DHS, through Immigration and Customs Enforcement (ICE), proposed regulations concerning the unlawful hiring and continued employment of unauthorized workers. These proposed regulations make it clear that, regardless of DHS’s role in the past with respect to SSA no-match/mismatch letters, the agency intends to rely upon SSA no-match/mismatch letters to vigorously enforce immigration laws against employers.

Under the proposed rule, DHS could determine that an employer has “constructive knowledge” that an employee is unauthorized to work in the United States upon the employer’s receipt of a SSA no match/mismatch letter concerning that employee. However, the proposed regulations set forth a “safe-harbor” procedure for employers to follow that would prevent the DHS from relying upon such letters.

This procedure includes, among other things, checking for clerical errors, asking the employee to confirm the accuracy of the employer’s information, and if needed reverifying the employee’s work eligibility by completing a new Form I-9. Generally speaking, the proposed regulations have been uniformly opposed by employers, organized labor and the U.S. Equal Employment Opportunity Commission. Accordingly, it is not clear at this time if and when the proposed regulations will be finalized or whether, if finalized, the final rule will be in a form substantially similar to that of the proposed regulations or contain significant modifications from the proposed regulations. For now, however, the proposed regulations provide employers with an outline of how ICE expects employers to act upon receiving a no-match/mismatch letter from SSA.

In addition to the proposed regulations, ICE, the largest investigative arm of the DHS, has over the last year significantly enhanced its worksite enforcement efforts nationwide as part of its new “interior enforcement strategy.” ICE’s new enforcement strategy focuses, in part, on strengthening worksite enforcement and compliance programs to deter illegal employment in the United States.

In years past, ICE conducted very few worksite enforcement operations and was often criticized for its perceived failure in enforcing the immigration laws. This has now changed and recent enforcement activities represent a significant re-focus of enforcement priorities to unauthorized employment in the United States. These activities include employer raids and arrests and federal indictments of employers, managers and employees. Some of these arrests were made, in part, due to the fact that the employer had in one or more years received no- match/mismatch letters from SSA and had simply ignored such letters.

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Employers found to have violated the Immigration and Nationality Act (INA), which prohibits the unlawful employment of alien workers, may be assessed civil penalties up to $11,000 per unauthorized worker.

Criminal penalties may be imposed against employers for “pattern and practice violations.” These criminal penalties may include fines of up to $3,000 per unauthorized worker and/or six months in prison. In addition, criminal penalties may be imposed for “harboring” or “knowingly hiring” illegal workers. Furthermore, in connection with criminal proceedings, ICE may seize or require the employer to forfeit proceeds of violations and assets used for violations. The largest employer forfeiture to date has been $12 million.

As the federal government continues to crack down on illegal workers and those employers who employ them, it is imperative that all employers take appropriate action upon receiving a no-match/mismatch letter from SSA. It is clear that the DHS will not turn a blind eye to employers who simply disregard no-match/mismatch letters. Those employers, who do, run the risk of substantial fines and penalties and possible criminal convictions.

Heather M. Tiltmann practices immigration, and labor and employment law at Whyte Hirschboeck Dudek S.C. She can be reached at 414-978-5302 or by email.