By ALLEN ERENBAUM
Employers in Los Angeles may soon find themselves squarely in the middle of the government’s efforts to root out potentially undocumented workers and facing difficult choices involving firing valuable employees, civil liability, and even criminal penalties.
Late last month, the U.S. Department of Homeland Security published a new proposal to force employers to fire employees who can’t quickly clear up discrepancies in their Social Security records. The rule, which was initially proposed nearly two years ago, is presently blocked by an injunction in a federal lawsuit filed by immigrant advocates.
At issue are so-called “no match” letters that the Social Security Administration sends to employers when SSA finds that the employer’s wage report includes names and Social Security numbers that don’t match. Companies have received “no match” letters from the government for years, with about 25 percent targeting California employers far more than any other state and most of them businesses with fewer than 100 people. The letters, intended to clear up Social Security databases, provide no immigration information and require no formal action by the employer.
Current immigration law prohibits employers from knowingly hiring or continuing to employ anyone without authorization to work in the United States, and the government can prosecute employers who turn a blind eye to telling facts and whose “deliberate failure to investigate suspicious circumstances imputes knowledge.”
What constitutes so-called “constructive knowledge” has always been a bit of a moving target. But U.S. immigration authorities have repeatedly said in the past that receipt of a “no match” letter, by itself, doesn’t create liability or an obligation for an employer to act. The new rule would change that.
While the DHS proposal frames the new procedure as a “safe harbor” for employers who receive a “no match” letter the intent is clear: employers who don’t follow the procedure are in big trouble. Specifically, the rule allows authorities to find that an employer had constructive knowledge about a worker’s immigration status and failed to act reasonably if they receive a “no match” letter from SSA.
To avoid constructive knowledge liability for employing an unauthorized worker, after receiving the “no match” letter an employer has 90 days to undertake a series of steps, including requiring the employee to personally resolve the discrepancy or to complete new employment eligibility paperwork. If the discrepancy remains unresolved, an employer must fire the employee or risk violating the law by knowingly employing an unauthorized worker.
Error-filled
So what’s the problem with this procedure?
First, the government’s proposal essentially assumes that everyone on a “no match” list is an illegal worker. Second, the procedure assumes that correcting faulty SSA information will be relatively simple. Neither of these assumptions is true.
The SSA database is notoriously error-filled. Government studies estimate that nearly 18 million Social Security records are incorrect, most of which relate to U.S. citizens. And easy isn’t a word anyone would use when it comes to correcting information in government databases.
The deadlines in the rule could leave workers with less than two months to contact the SSA, present the correct information, have the database changed, and allow the employer to confirm the change has been made to avoid being fired. With new civil and criminal liabilities in the balance, skittish employers may hastily and wrongfully fire some or all employees, leading to legal claims.
DHS intends to ask the federal court to dissolve its injunction, which is currently preventing the rule from taking effect. If the rule is upheld and implemented, employers may reduce risks by strictly following proposed safe-harbor procedures after receiving a “no match” letter. Employers should also create clear procedures for employee hiring, termination, and recordkeeping. Additionally, employers should internally monitor compliance with all procedures to reduce their risk of liability under the “no match” rule and worker discrimination laws.
While the federal courts will decide the legal issues, the proposed “no match” rule puts employers at the center of an initiative designed to weed out foreign nationals who may be working illegally in the United States and potentially in the middle of a “no win” situation. In Los Angeles County, where nearly 2 million businesses employ 100
people or less, the impact could be
particularly acute.
Allen Erenbaum is a partner in Mayer Brown’s Los Angeles office and a former counselor to the Commissioner of the Immigration and Naturalization Service.
