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What to Do If You Get a No-Match Letter From Social Security Administration

Get ready. The no-match letters are coming soon to a small business near you – and maybe even to your own.

"No-what?" — you ask.

Pay attention. The Department of Homeland Security (DHS) recently announced its final "no-match" regulation, which takes effect Sept. 14, designed to make it harder for illegal immigrants to use phony Social Security numbers to get a job. Letters will soon be flowing from the Social Security Administration (SSA), DHS Secretary Michael Chertoff said, to notify businesses that an employee's name and Social Security number don't match government records.

"They will not send all of them out at once, they'll probably send about 15,000 out a week, over a period of probably about eight to ten weeks," Chertoff said.

15,000 a week? That’s a lot of letters. So what does it mean if you get one in your mailbox?

It means the DHS is checking the legal status of your employees. In effect, it’s part of the wider government crackdown to ensure all workers across the country are legally authorized to work in the United States.

The new regulation outlines the procedures that businesses must take when they receive a no-match letter from the SSA. As I mentioned earlier, this type of letter informs a business that a Social Security number submitted for an employee does not match the agency’s records. The no-match rule also applies to "Notice of Suspect Document" letters that firms may receive from U.S. Immigration and Customs Enforcement (ICE) to let them know there are inconsistencies with the immigration status or employment-authorization documents of an employee.

An employer must follow "reasonable steps" outlined by DHS in order to qualify for "safe harbor" status. However, even if a business owner follows the steps and procedures exactly as written by DHS there’s no guarantee that they won’t be fined or penalized. After all, DHS could surmise that an employer had "constructive knowledge" that someone on the payroll was not authorized to work in the United States. DHS will certainly find that a business had "constructive knowledge" if they fail to take the "reasonable steps" necessary upon receiving a no-match letter.

"Safe-harbor" regulations

So, what must a business do when they receive a no-match letter from either SSA or ICE?

According to DHS, a "reasonable employer" would:

Within 30 days of receiving the no-match letter, check the records to ensure there are not typos or transcriptions errors in an employee’s records sent to the SSA or DHS. Whether there is an error or not, such information will be verified or re-verified with the relevant agency. A reasonable employer would record the "manner, date and time of verification." The relevant agencies do not keep track of a business’s communication with them.

If such actions do not resolve a discrepancy, an employer checks the information with the employee. If the information is not correct (typo or transcriptions problem upon the employer’s part, or other errors), the employer should takes steps to correct it. If, according to the employee, the information is correct "the reasonable employer would ask the employee to pursue the matter personally with the relevant agency." The bottom line is that the discrepancy will only be considered resolved when and if the information sync with the records of SSA or DHS.

(In reading the regulation, the writer was confused about the reasonable employer "30-day rule." While the regulation noted the 30-day period that a reasonable employer would have in checking its records upon first receiving the no-match letter, the 30-day window also seems to apply to follow-up actions to resolve discrepancies. That is, it appears that the 30 days included the first set of actions, as well as requesting follow-up actions by the employee where it is necessary to resolve discrepancies. To the reasonable reader, this 30-day language is confusing. I digress.)

Well, discrepancies are to be resolved within 90 days of receiving a no-match letter. If they are not, the employer can take action to terminate the employee; or "face the risk that DHS may find that the employer had constructive knowledge that the employee was an unauthorized alien and therefore, by continuing to employ the alien," be found in violation of the law.

If there is a breakdown over the course of the 90 days, an employer can go through the whole verification process again with an employee as if he or she were re-hiring the employee (completing a new I-9 form, but with more information required). However, this process must occur within 93 days of receipt of the no-match letter. In addition, all documents used to establish identity must have a photograph, and there are restrictions on what documents are to be used that contain the SSN or alien number (the ones that triggered the no-match letter cannot be used, for example).

Employer groups still have many questions about the regulation, and concerns about its practical impact. DHS has developed a general Q&A: "Safe Harbor Procedure for Employers Who Receive a No Match Letter."

If you are an employer who has questions about the new regulation, send me an e-mail and we’ll try to get them answered by DHS staff. We all want to be "reasonable employers," and added clarity in key areas will help.

Additional Employment Eligibility Verification System (EEVS) mandate forthcoming for government contractors. Secretary Chertoff also announced that the federal government – well, firms that do business with government – will "lead by example" by taking part in a mandatory E-Verify program that matches information from the I-9 employment verification form against the SSA database (and against 60 million records in the DHS immigration databases). The Administration started a rulemaking process that would require new federal contractors to use E-Verify to check the employment eligibility of its workforce.

Chertoff said that "using E-Verify will become a contract performance requirement" and "if a federal contractor fails to use the system for employers who are working on federal contracts, their contract will be subject to being terminated for non-performance."

If you are a small business who is currently struggling to break into federal procurement opportunities, it appears the environment keeps getting tougher.

Kerrigan responds to your questions and comments regarding her previous column, "It’s Tax and Spend Time on Capitol Hill – for ‘The Children,’ of Course":

From Robert: Thanks for the article on Foxnews.com. How do I fight this SCHIP bill in Congress?

KK responds: Thanks for your interest in taking action. Please call your House member and Senators on Capitol Hill. The bill in the House is particularly egregious – it spends excessive amounts of taxpayer dollars, and taxes all health insurance plans to pay for it.
You can urge that they reauthorize the program to help the low-income kids that SCHIP was meant to help. Also, no tax Increases!

Phone calls do work, and I would encourage you to call the Capitol Hill switchboard after the August recess — the end of the first week of September would do.

That number is: (202) 225-3121. The operator will put you right through to their offices.

From Stephen: This comes at no surprise. The Democrats are Marxist. No doubt the bill is just a campaign idea to say Republicans are against children after Bush previous veto of the bill. Just as the Democrats voted against the minimum wage increase last year before the Congressional elections as it was tied to getting rid of the death tax. And the Republicans were too stupid to campaign on that fact.

KK responds: Where are the good political strategists anyway? And who are the Democrats listening to? With 18 percent approval rating, you would think they’d stop on the overreach. There was little to help the GOP in the last election.

From Dan: The Federal government should pay for everyone’s healthcare, period. Until they can, they should tax all untaxed employer health insurance to pay for uninsured people. Furthermore, they should pay for this and similar programs by removing the Social Security cap on wages, doubling the tax on investment income and raising the top tax rates to 50%.

KK responds: I completely respect your upfront honesty in how you would pay for a government-run system, although (as you can guess) I totally disagree with the solution.

From Don: Keep it up. Advocates of smaller government seem to rarely be heard any more.

KK Responds: Thanks!

From Rich: Has anyone heard from AARP on the cut to Medicare that is part of the Senate bill? My mother is on Part C Medicare Advantage, as are many other seniors and I believe it works. Why shift the tax to seniors who need help under Part C?

KK responds: Strangely, the AARP leadership has come out in support of the bill. However, I suspect their grassroots members are another story. Once the word gets out, seniors (as well as others impacted by the bill, if it advances after a conference...although its most egregious components will probably be dropped) will rightfully let there voice be known. One of the most influential groups who can voice opposition to this issue is senior Americans. Over 3 million will be negatively impacted by the House version, and I would encourage your grandmother to take action – to call her House member and Senators!

From Les: If your organization ever does an exposé on how to reform healthcare, I would like to voice my opinion. I am no expert, but I have seen a method of reforming a huge segment of government that worked. That would be the military base closure commission. In the past 20 years, this model has been used on five separate occasions to close a total of 350 military institutions, saving billions.

The idea is simple. One, establish a commission to look at all aspects of healthcare, including some very good ideas that were shot down by lobbyists in the past. Two, use those ideas to prepare a bill for Congress. Three, let Congress debate the merits of the bill. Four, let Congress vote, yea or nay only, no amendments or earmarks. Five, hope we have a President with enough guts to sign it. Thanks for listening.

KK responds: Thanks for writing. Yes, I am familiar with the BRAC process you refer to. I think the concept has merit in looking at how we reform government in general. There could be application for addressing health care reform – Congress certainly needs to look at, and consider, many options and methods for making legislative breakthroughs when it comes to addressing our most complex challenges.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council, a research and advocacy group based in Washington, D.C. that works to protect small business and promote entrepreneurship. She is also founder of Women Entrepreneurs, Inc. , an association helping women business owners succeed through education, networking and advocacy. Kerrigan can be reached at kkerrigan@sbecouncil.org .