Social Security No-Match Regulations are Suspended – October 10, 2007

A district court judge in San Francisco, California has granted an order preventing the implementation of the new Social Security No-Match regulations. The order was granted in a lawsuit filed against the Department of Homeland Security (DHS) by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) and other organizations. The new regulations were challenged on the grounds that they could lead to mass layoffs in certain low-wage industries. This order will remain in effect until a final decision is reached in the case which could take many months.

The new DHS rules regarding Social Security No-Match Letters were scheduled to take effect on September 14, 2007. Under the regulations, new specific legal obligations are imposed on employers that receive the so-called “no-match” letter from the Social Security Administration. A no-match letter may be issued when an employee’s social security number does not match the employee’s name in the SSA database. Under the regulations, employers may take specific steps under the “safe-harbor” procedures to protect against the DHS using the no-match letter as evidence that the employer has constructive knowledge of employing an illegal worker. These steps include correcting clerical errors and involving the employee in correcting discrepancies. However, if a discrepancy cannot be clarified within 90 days then the employer must choose between terminating the employee or face the risk that DHS will determine they have constructive knowledge of employing an illegal worker.

The judge criticized the federal government in the order for not researching the impact that the regulations could have on businesses across the country. The federal government acknowledges that the Social Security database contains many errors, which could cause the termination of many legal workers.