In 2007, the Social Security Administration (SSA) stopped issuing no-match letters to employers, advising them when their workers' Social Security numbers do not match with SSA records. The no-match letters are now back, with the SSA resuming the practice for tax year 2010. 

Unlike the previous version, the new no-match letter lists only one employee, instead of multiple employees. Second, there is no language warning employers that failing to act upon the letter could be viewed as "constructive knowledge" of an employee working without authorization. Immigration & Customs Enforcement (ICE), however, still considers no-match letters as a source of evidence against non-compliant employers. During I-9 audits, ICE routinely requests no-match letters and related documents and, when appropriate, considers the employers' responses when deciding whether to file additional charges.

Upon receipt of a no-match letter, employers should take steps to resolve the discrepancy. Employers should first verify the name and Social Security information in their own records and then have the employee do the same. If that does not resolve the discrepancy, the employer should instruct the employee to contact SSA and report back within a reasonable period. While the regulations do not define a "reasonable period," the SSA, Department of Justice and immigration authorities have issued related guidance indicating that an employee could require up to 2 to 4 months to resolve the discrepancy, depending on the situation. A period of 120 days is recommended to give the employee sufficient time to resolve the discrepancy. Employers should document the steps they take and follow up periodically with employees about their progress with SSA. If the employer cannot resolve the mismatch because the person is no longer an employee, it should document its efforts to resolve the issue and retain the records for four years.

According to the SSA, no-match letters will be sent when the government is unable to reach the employee directly about the discrepancy. No-match letters are issued for various reasons, including typographical errors, name changes and incomplete information on the W-2. A no-match letter, by itself, does not give the employer a basis to take adverse action against the employee. Doing so could result in a claim of immigration-related discrimination. Also, an employer should not attempt to re-verify work authorization by instructing the employee to complete a new I-9 form.

While ICE enforces I-9 compliance, the Department of Justice's Office of Special Counsel ("OSC") enforces the immigration-related nondiscrimination regulations. For more information, see the OSC's FAQs on no-match letters.

Criminal prosecutions against employers often involve  no- match letters. Employers should consult with counsel to determine how to best respond to no-match letters so that they comply fully with immigration law while, at the same time, avoid immigration-related discrimination.  

In a recent case, Jin-Ming Lin v. Chinatown Restaurant, Corp., plaintiff employees sued the defendant employer for unpaid minimum wages and overtime. In its defense, the employer claimed that "illegal aliens" cannot recover unpaid wages and moved to compel discovery of plaintiffs' immigration status. Judge George O' Toole of the U.S. District Court for the District of Massachusetts denied the employer's motion, stating that the plaintiffs' immigration status was irrelevant to their claims under the Fair Labor Standards Act (FLSA).  

The judge reasoned that the U.S. Supreme Court's decision in Hoffman Plastic Compounds, Inc. v. N.L.R.B. did not apply to this case. In Hoffman, the Supreme Court held that federal immigration policy, as set forth in the Immigration Reform and Control Act of 1986 (IRCA),  foreclosed the NLRB from awarding back pay to an undocumented immigrant who never had authorization to work in the U.S. The judge noted that while awards for back pay under the NLRA are discretionary, awards for unpaid wages under the FLSA are a matter of statutory entitlement when the necessary factual predicate has been established and that courts do not have discretion to deny the award of FLSA damages when they have been proved.

Judge O'Toole stated, "The tension between policies underlying the FLSA, on the one hand, and the IRCA, on the other, continues to exist." He observed that the  court in Hoffman was able to give priority to the statutory policy of the IRCA over the administrative discretion of the NLRB. In this case, however, "both poles of the conflict are statutory directives." The judge noted, "If a plaintiff makes out an FLSA case, he is entitled to an FLSA remedy, any obstruction or interference with immigration policy notwithstanding." He added, "Any remedy for an incompatibility between federal labor and immigration policies will have to come from Congress, not the lower courts."