September 17, 2007

Federal Lawsuit Challenges the DHS' Final Rule on "No-Match" Letters

On the heels of a U.S. District judge issuing a restraining order prohibiting the Department of Homeland Security (DHS) from mailing "no-match" letters to employers, the AFL-CIO, along with several California labor councils, filed a proposed complaint seeking a permanent injunction on September 7, 2007. The lawsuit charges the federal government with exceeding its authority and acting in an arbitrary and capricious manner by issuing the the DHS Final Rule on "no-match" letters. The suit, filed in the Northern District of California, also seeks a declaratory judgment finding the DHS regulation invalid.

The DHS Final Rule, titled "Safe-Harbor Procedures for Employers Who Receive a No-Match Letter," would require businesses to resolve the "no-match" letters from the Social Security Administration (SSA) within 93 days. A "no-match" occurs whenever there is a discrepancy between an employee's name and social security number in the SSA database. However, the SSA has acknowledges that benign causes, such as clerical errors, marriage-related name changes, and use of multiple surnames, can result in a "no-match." The SSA also noted that their database currently contains more than 17 million no-matches, which have nothing to do with an employee's immigration status. Thus, using the no-match letter as a tool to enforce immigration laws is wasteful and costly to the businesses community.

If the DHS Final Rule were enacted, businesses would receive the SSA no-match letter accompanied by a DHS guidance letter. Each letter would list at least ten mismatched social security numbers and some letters would list more than 500 names. The lawsuit notes that because the initial DHS/SSA mailing would cover approximately 8.7 million social security numbers, the cost to resolve the discrepancy might easily exceed $100 million in administrative costs to businesses.

Greenberg Traurig will continue to monitor this lawsuit and provide timely updates.