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Aliens on the payroll? Department of Homeland Security recommends
safe harbor action if you get a "No-Match" letter from SSA





                 George L. Chimento
                 August 24, 2007



The problem

Every year, employers file 250 million earnings reports with the Social Security
Administration ("SSA"). In 2002 the SSA was unable to match almost 9 million
wage reports, representing $56 billion in earnings.  At the end of 2003, the
accumulated mismatch since 1936 was $519 billion. A mismatch can be due to
clerical errors by employers or SSA, or name changes, or illegal alien status.

SSA will send a letter to the individual, or the employer, or both to say there is "no
match" on its system for the submitted record. If US Immigration and Customs
Enforcement ("ICE") cannot verify back-up documents during an employer audit of
I-9 Forms, it issues a Notice of Suspect Documents.

Section 274A(a)(2) of the Immigration and Nationality Act (INA), 8 U.S.C.
1324a(a)(2), states:

"It is unlawful for a person or other entity, after hiring an alien for employment in
accordance with paragraph (1), to continue to employ the alien in the United States
knowing the alien is (or has become) an unauthorized alien with respect to such
employment."   
           

Both regulation and case law support the view that an employer can be in
violation by having
constructive knowledge that an employee is unauthorized to
work. So it's a big concern for an employer when it gets a "No-Match" letter from
SSA or a Notice of Suspect Documents from ICE.

The August 15, 2007
regulations issued by the Department of Homeland Security
("DHS") are only meant for employers
who do not have actual knowledge that a
worker is an illegal alien. The employer who (i) received a "No Match" letter from
SSA or a "Notice of Suspect Document" from ICE, and (ii) who follows the
regulation, will be deemed not to have constructive knowledge of illegal status.

The regulation is a safe harbor, not a requirement, but it would be very smart to
follow its three steps and to keep detailed records.

__________________________________________________________

Step 1 - the first 30 days after Notification

Within 30 days of the Notification (an SSA "No-Match" letter or an ICE Notice of
Suspect Document), an employer must check its records for clerical errors.

If the Notification was from ICE, the employer also must contact the local DHS
office in the first 30 days to attempt to resolve the matter. There will be
instructions on the ICE Notification.

If the problem is due to a clerical error by the employer, the employer should
respond to the Notification promptly and verify the employee's status. The
employer should make a record of the manner, date, and time of such verification,
and then store the record with the employee's
Form I-9(s) The employer may
update the employee's Form I-9 or complete a new Form I-9 (and retain the
original Form I-9), but the employer should not perform a new Form I-9 verification.

If its error was not the cause, the employer must contact the employee promptly.
The safe harbor does not require the employer notification to occur within the first
30 days, but it's good practice to advise the employee as soon as the employer
determines the problem is not its fault.

__________________________________________________________________

Step 2 - the first 90 days after Notification

If the employee can point out an error the employer did not notice, the employer
should take the corrective action described above and should verify the employee,
with SSA or DHS, as appropriate. If there was no employer error, the employer
must advise the employee to get it straightened out with SSA in 90 days of the
letter or Notice date.  If the problem stemmed from an ICE Notice, advise the
employee you need better documentation within 90 days of Notification date, and
follow the instructions you get from DHS.

In the typical case - a "No-match" letter from SSA - if the employee reports the
matter is corrected within the 90 days, the employer should verify with SSA. If the
employer does this itself, rather than using a 3rd party service, it can  telephone
SSA toll-free 1-800-772-6270, weekdays from 7 a.m. to 7 p.m. EST. See

http:
//www.ssa.gov/employer/ssnvadditional.htm. For information on SSA's online
verification procedure, see
http://www.ssa.gov/employer/ssnv.htm. Employers
should make a record of the manner, date, and time of any such verification,
because SSA recordkeeping is not perfect.

SSA advises that almost all cases can be resolved if employer and employee act
promptly.

__________________________________________________________________

Step 3 - day 91 through day 93

If the matter is not resolved in the first 90 days, should the employer just fire the
employee? That raises other issues, so the DHS warns that employers: "should
not be tempted to mistakenly terminate employment for citizens and authorized
aliens."

During this final 3 day period, the employer should offer the employee a new Form
I-9 verification procedure. This should be a uniform practice, in order to blunt
charges of discrimination.

"The Form I-9 verification step in the procedure offers the employee one last chance to
show the employer that he or she is not an unauthorized alien."

Section 1 of the Form I-9 (employee) and Section 2 (employer) must be completed
by the 93rd day. For verification, no document with the suspect SS# can be
accepted. The document which establishes identity (or identity and employment)
must have a photograph. Documents in this verification process also must not be
"facially suspect." For example, if the first three numbers of an employee's claimed
SSN are in series which are not used by SSA - "000,'' "800'' or "900'' - this should
be an automatic tip-off to an employer that something is amiss.

As a practical matter,  it's hard to imagine how this last gasp verification process --
essentially requiring that the employee show up with documents verifying a new
SSN --- could be fulfilled, except in the rarest of cases. It's really just a final step to
show fair treatment when the employee has failed to produce good evidence
during the 90 days following the Notification.

Step 4 - day 94 and beyond

The regulation does not require firing the employee on day 94. However, if the
employee is not terminated, the employer has a person on its payroll without
proper documentation. The "safe harbor" will not be available, and the employer
could be found to have constructive knowledge that it was employing an illegal
alien.  It takes courage and judgment to continue the employment relationship
after that point. Still, there may be supportable reasons (i.e. proof from SSA that it
is working on the matter and needs more time), but it would be wise to consult
counsel.

__________________________________________________________________

This article is provided as a courtesy and may not be relied upon as legal advice,
or to avoid taxes and penalties. Distribution to promote, market, or recommend
any arrangement or investment to avoid or evade taxes, including penalties, is
expressly forbidden. Any communication with the author as to its contents, does
not, of itself, create a lawyer-client relationship. Under the ethical rules applicable
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