Department of Homeland Security Announces the Proposal of Two Federal Regulations Aimed at Improving Worksite Enforcement

On June 14, 2006 the Department of Homeland Security (“DHS”) published proposed federal regulations aimed at improving worksite enforcement, preventing the use of fraudulent Social Security numbers by illegal aliens and assisting employers in verifying the employment eligibility of workers. The SS mis-match regulation clarifies the legal obligations of an employer when s/he receives a no-match letter from the Social Security Administration (“SSA”) or written notification from the Department of Homeland Security (“DHS”). The regulation expands the definition of constructive knowledge to include an employer’s receipt of a Social Security mis-match letter. It states that, the “[E]mployer’s obligations under current law, which is that of the employer fails to take reasonable steps after receiving such information, and if the employee is in fact an unauthorized alien, the employer may be found to have had constructive knowledge of that fact.” Two specific examples illustrate what would constitute constructive knowledge under the proposed regulation: 1. Written notice from SSA that the combination of name and SSN submitted for an employee does not match SSA records; and/or 2. Written notice from DHS that the immigration status document, or employment authorization document (“EAD”), presented or referenced by the employee in completing Form I-9 was assigned to another person, or that there is no agency record that the document was assigned to anyone. Regarding the latter situation, DHS will take into account the totality of relevant circumstances when making a determination whether the employer had constructive knowledge that the alien was unauthorized to work.

The regulation explains the safe-harbor procedures that an employer can follow in order to limit or negate liability based upon the employer’s actual or constructive knowledge that the alien was ineligible to work in the U.S.

According to information published by DHS regarding the proposed regulation, we have outlined the steps below noting what an employer should do if s/he receives a mis-match letter from DHS or SSA:

If an employer receives a mis-match letter from SSA or written notification from DHS the employer should respond in a reasonable manner in order to avoid liability and mitigate potential penalties. The employer should take the following steps, as enumerated in the proposed regulation:

1. Check their records immediately after receiving a no-match letter, to determine whether the discrepancy results from a typographical, transcribing, or similar clerical error in the employer’s records or in its communications to the SSA or DHS.
   1. If it is determined that it is only a clerical error, the employer should take action to correct the error and inform the necessary agencies within 14 days from receipt of the no-match letter. The employer should make certain that the name and number, as amended, matches the records.
   2. If it is not simply a clerical error, the employer should confirm the records on file with the employee, make any necessary corrections, inform the agencies involved and confirm that the information matches the agency’s records. This should be done within 14 days from receipt of the no-match letter.1 The discrepancy will only be considered “resolved” if the employer follows up with SSA to confirm2 the name and social security number match and with DHS to verify that the individual is authorized to work.
2. If the discrepancy is still not resolved within 60 days from the receipt of the of the no-match letter the employer and employee should refile the Form I-9 within 3 days. Therefore, the employer has a total of 63 days from receipt of the no-match letter to check the records, resolve discrepancies and complete a new I-9.

More analysis is needed to determine what is the next step if after the employer has taken the all of the above necessary, “reasonable” steps to resolve any discrepancies, and there is still no resolution. Should the employer terminate the alien’s employment or risk being found liable based on the DHS claiming the employer had constructive knowledge that the alien was unauthorized? ICE states it will look at the totality of the circumstances. What if the Social Security number was not used as an underlying Form I-9 document? Why does ICE want a new I-9 completed? There are still many questions we need to review.

These proposed regulations are part of a larger DHS initiative intended to strengthen the border and enhance interior enforcement. ICE will be seeking comments and notes its particular interest in the timing of the proposed system to deal with mismatch letters.

The second proposed regulation deals with electronic I-9s and is also discussed in this newsletter. These regulations are only a first step in what will likely prove to be a series of changes proposed by the Department. These proposed regulations will be subject to a 60-day public comment period, although the I-9 regulation will become effective on an interim basis as soon as it is published. GT will provide updates as we learn more about the proposed regulations and other changes from DHS officials. The above analysis should not be considered a substitute for reading the actual language of the regulation.

1 If the employee states that the information is correct, the employer should ask the employee to go to the local SSA office and resolve the matter personally.

2 Employers can confirm the SSN and name with SSA Reporting Branch by calling 1-800-772-6270 weekdays from 7am to 7pm.