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October 4, 2007 10:55 AM CDT

No-Match Letters Bad for Business


On Aug. 15, the Department of Homeland Security (DHS) published a final rule related to correspondence that employers receive from the Social Security Administration (SSA), known as "no-match" letters. The letters state that the SSA is unable to match the name and Social Security number (SSN) provided for a specific employee to its records. The so-called "no-match" regulation will have a monumental impact on U.S. employers, especially small businesses. The DHS, in a meeting with key stakeholders, acknowledged the significant burden that the new rule will place on employers.

This new regulation is far reaching and will affect mason contractors and construction companies across the United States. Anyone who hires individuals to act as employees of his business will be subject to this new rule.

It has been more than one year since the DHS initially proposed this regulation providing guidance on employer obligations and outlining safe-harbor procedures that employers may follow upon receipt of a SSN no-match letter. During the interim period, the DHS received numerous formal comments from the business community, including the MCAA, regarding the impact of the proposed regulation on employers. Unfortunately, suggestions made through those comments were not incorporated into the final version of the regulation.

The final rule gives employers strict guidance regarding the steps an employer must take after receiving a notice from the SSA stating that an employee's name and social security number do not match. Employment of the individual must be terminated if the discrepancy cannot be resolved within 90 days.

Employers often receive no-match letters for undocumented workers, because these workers frequently use fake social security numbers. However, it is important to note that no-match situations also occur for legitimate reasons, such as clerical errors or failure to register a change of name after marriage. However, because of backlogs and bureaucratic delays, it can take months for employers and employees to document and correct records. The timeframe provided by the DHS in the new rule is unrealistic, making it potentially impossible for an employee to correct any discrepancies. Furthermore, it is unfair for an employee to face potential termination as a result of such delays caused by inadequacies at the federal government. There are errors in the Social Security records of an estimated 12.7 million native-born U.S. citizens; 250,000 foreign-born citizens; and 4.8 million legal immigrants, potentially creating a paralyzing bureaucratic nightmare for workers and Social Security offices if their records are dragged into the sweep.

In an effort to halt further action by the administration and the DHS, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) together with American Civil Liberties Union (ACLU) filed suit in U.S. Federal District Court of Northern California, requesting a temporary restraining order (TRO). The suit echoes sentiments voiced by various organizations representing both business and employees. THE AFL-CIO and the ACLU charge that the plan will harm citizens and other legal workers. The suit also alleges that the DHS is overstepping its authority to enforce immigration laws and is misusing a SSA database. Furthermore, the suit alleges that the letters are an effort to pressure businesses to fire workers whose documents are flagged and could expose countless immigrant workers, including law-abiding citizens and legal residents, to job discrimination.

Initially, the DHS had only allowed for a 30-day grace period before enforcement, which had been scheduled to go into effect Sept. 14. However, the administration suffered a major setback on Aug. 31, when U.S. District Court Judge Maxine M. Chesney issued a ruling that prohibits the DHS from mailing notices to 140,000 employers about suspect Social Security numbers. The TRO is a huge victory for the labor federation and the ACLU. This also provides a temporary reprieve for employers who are still unclear about how to handle the hundreds of letters they potentially could receive. Chesney granted the request for a temporary restraining order against the government, saying the court needs "breathing room" before issuing a decision on the DHS plan. She has set a hearing for Oct. 1 to further evaluate and consider the case.

For additional information, including helpful tips and guidance on the new regulation, visit MCAA's Web site, Additional information can also be found at the Department of Homeland Security's Web site at

About the Author

Jessica Johnson Bennett was the Director of Government Affairs for MCAA. She has an extensive background in public affairs and government relations. Her expertise in strategic planning, PAC management and operations help on key policy issues.


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