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NFIB Talking Points: Immigration Update

The U.S. Department of Homeland Security announced tough new immigration rules Aug. 10 that will give employers 30 days to respond to a notice of a discrepancy regarding an employee's legal working status, or "no-match letter." The new rules are an attempt to crack down on businesses that employ undocumented workers. Penalties for failure to comply with the rules are stiff--up to $10,000 per violation. The new rule is scheduled to go into effect Sept. 14.

NFIB action

  • We closely monitored the rulemaking process and commented to DHS on how this rule could affect small business.
  • Because most small businesses lack human resource departments or immigration expertise, we argued for flexibility in reporting time for small-business owners.
  • When initially proposed, the rule required employers to respond to a no-match letter within 14 days. Because we fought for a longer response time, DHS amended the rule to allow for a 30-day employer response requirement. If an employer follows the steps outlined in the rule correctly, they will be entitled to a safe harbor from penalties. We believe this safe harbor rule benefits small-business owners because it clearly explains their obligations as employers under current immigration law. Safe harbor also levels the playing field for small-business owners, ensuring that they understand that all small-business owners are playing by the same rules. 

What is a no-match letter?

  • Employers are responsible for submitting annually to the Social Security Administration earnings reports for their employees (W-2 forms). In millions of cases, an employee's name and Social Security number do not match SSA records. There can be many causes for this mismatch. Often clerical errors and name changes are to blame, but it is important to recognize that an unauthorized worker using a false or stolen name or social security number will also cause a mismatch.
  • In turn, the SSA each year sends thousands of employer correction requests, or "no-match letters," to inform employers that the Social Security numbers employers provided on W-2 forms for certain employees do not match the SSA's records.
  • U.S. Immigration and Customs, a department within DHS, also sends out similar no-match letters to employers, but in a process separate from that of SSA. ICE letters are sent out if an investigation or audit of a business turns up mismatched names and Social Security numbers on the I-9 form.

The new rule

  • The new safe-harbor rule provides more clarity on the employer's current obligations under immigration laws.
  • The rule specifies step by step actions that can be taken by the employer that will be considered by DHS to be a reasonable response to receiving a no-match letter.

Why is the safe-harbor rule important to small business?

  • By taking these steps in a timely fashion, an employer would avoid the risk that the no-match letter would be used as any part of an allegation that the employer had constructive knowledge that the employee was not authorized to work in the United States.

What are the steps involved in assuring safe-harbor?
Small-business owners can take advantage of the new safe-harbor rule, if they take the following steps after receiving a no-match letter from SSA or ICE:

  1. Verify within 30 days that the mismatch was not the result of a record-keeping error on the employer's part;
  2. Request that the employee confirm the accuracy of employment records;
  3. Ask the employee to resolve the issue with SSA;
  4. If these steps lead to resolution of the problem, follow instructions on the no-match letter itself to correct information with SSA, and retain a record of the verification with SSA; and
  5. Where the information could not be corrected, complete a new I-9 form without using the questionable Social Security number and instead using documentation presented by the employee that conforms with the I-9 document identity requirements and includes a photograph and other biographic data. Employers unable to confirm employment through these procedures risk liability for violating the law by knowingly continuing to employ unauthorized persons.
  6. Terminate the employee if at this point the employee is unable to provide identity documents required for the I-9 form.