08/ 13/ 2007
Tough new rules announced on Aug. 10 by the U.S. Department of Homeland Security 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 new rules are stiff -- up to $10,000 per violation.
DHS has also announced that it will issue a proposed rule that would require all federal contractors to participate in the agency's electronic employment verification system.
How the new no-match rules work
When an employer sends an employee's W-2 form to the Social Security Administration, the employee's name and Social Security number are checked against SSA records. The U.S. Immigration and Customs Enforcement will also verify the accuracy of information on I-9 forms. If either (or both) SSA or ICE cannot verify employ information, a no-match letter will be sent to the employer indicating that the employee's name or Social Security number did not match government records. Employers will then have 30 days to try to correct the error(s).
An employer who receives a no-match letter should avoid taking immediate adverse action against the employee. A no-match letter simply says the employee's information did not match government records, and is not necessarily an indication that the employee is ineligible to work in the U.S. Employers must give the employee an additional 93 days to confirm that the information they provided on the I-9 and W-2 is correct and to make sure that a clerical error was not made.
If the discrepancy can't be explained, the employer must terminate the employee. If an employer fails to terminate the undocumented worker, the government will assume the business is knowingly employing undocumented workers and may issue a fine of up to $10,000.
Safe harbor provision included
NFIB closely monitored the rulemaking process and argued that DHS should allow for small businesses to continue appealing a discrepancy if they miss the 30-day deadline for good reason. Most small businesses lack human resources departments or immigration expertise, which makes the quick turnaround burdensome and could lead to mistakes. DHS has adopted a safe harbor provision supported by NFIB. The safe harbor will protect employers from penalties if they follow the procedures set forth in the new rule.
A copy of the rules can be found at on the DHS Web site. The U.S. Department of Justice and the U.S. Small Business Administration provide assistance on how to legally verify the work status of employees without committing unlawful discrimination. Get more information from the Department of Justice or Business.gov.
Employers who have additional questions about the new rules should consult with an experienced employment or immigration attorney.
