Lori Liu
January 2008

The Luminary by Brisbane Chamber of Commerce

In the November issue of the Luminary, we reported that on October 10, 2007, a federal judge stopped the government from enforcing a new rule punishing employers if they do not take action after receiving a Social Security Administration (SSA) "no-match" letter. A "no match" letter is a letter from the SSA stating that the information provided by an employee on a W-2 form does not match SSA records. Under the new rule, employers receiving "no match" letters could be required to fire employees whose SSA discrepancies are not resolved within 90 days of receiving the letter. If employers did not respond to the "no-match" letter, they could also possibly face civil fines as well as criminal charges for continuing to employ undocumented workers.

The Department of Homeland Security (DHS) has asked the judge to delay the court proceedings until March 2008, in order to allow the DHS to engage in a new rulemaking effort. The DHS said the new rulemaking effort would address the court's concerns over its regulation on SSA "no-match" letters.

The DHS also filed an appeal asking the appellate court to overturn the judge's order preventing enforcement of the rule. The motion for an appeal now puts pressure on the coalition of labor, business and immigration groups that filed the lawsuit challenging the new rule.

DHS officials have said that the department initiated a Regulatory Flexibility Act analysis in November 2007, and that the analysis and rule revisions to address the district court's concerns should be complete by March 2008. In the meantime, the DHS has made it clear that it would press ahead to put the "no-match" rule into effect.

In the interim, employers should consult with legal counsel on how to respond to SSA "no match" letters.

Lori Liu, a Brisbane resident and attorney with Buchalter Nemer, specializes in commercial litigation. She can be reached at (415) 227-3603 or .