DHS announces final “No-Match”? letter requirements.

The Department of Homeland Security (DHS) has recently released its final regulations concerning employers’ responsibilities when a “No-Match” letter is received.  After an employer receives a “No-Match” letter from the SSA, or a letter regarding employment verification from the DHS, “reasonable steps” must be taken within 90 days of receipt or the employer may be found liable of violating federal immigration law. “Reasonable Steps” or “Safe Harbor” provisions that DHS recommends are:

·        The employer should promptly check its records to determine if typographical, transcription or clerical error was the cause.  If such an error did occur then the employer needs to correct its records, inform any relevant agencies, verify the corrected information with the relevant agency, and document the correction. This first step should be done within the first 30 days after receipt.

·        If above action does not correct the discrepancy, then the employer would need to promptly ask the employee to verify that the employer’s records are accurate. As above, if such an error did occur then the employer needs to correct its records, inform any relevant agencies, verify the corrected information with the relevant agency, and document the correction. If the records are accurate then the employer needs to have the employee address the problem with the relevant agency (i.e. visiting the local SSA office, bringing whatever acceptable documents are needed to correct the issue). This next step should also be done within the first 30 days after receipt.

·        If the discrepancy still exists, within 90 days of receipt of the letter, the employer must complete a new I-9 Form (using the same steps as if the employee was newly hired), except no documents may be used to verify the employee’s authorization that use the questionable Social Security number nor any document that does not have a photograph of the employee.

If all of the above verification steps fail then the employer must choose to either take action to terminate the employee, or be in violation of federal immigration law by knowingly continuing the employ of unauthorized persons.

For additional information please follow these links:        

See Also

• Safe Harbor Information Center
  ICE website with more detailed information regarding the new “No-Match” regulations
• Example of ICE insert
  Example of ICE’s insert that will be included with the SSA “No-Match” letters.

Unions and other organizations file lawsuit to block the new No-Match Rule implemented by the Department of Homeland Security (DHS).

The AFL-CIO, the American Civil Liberties Union (ACLU), the National Immigration Law Center (NILC) and the Central Labor Council of Alameda County recently filed a lawsuit to stop the new No-Match rule which is to go into effect September 14, 2007. The lawsuit was filed with the US District Court for the Northern District of California as AFL-CIO, et al. v. Chertoff, et al. (N.D. Cal. Case No. 07-CV-4472 CRB).

On August 31, 2007 the Court issued a restraining order against the DHS and SSA, restraining the two departments from implementing the final No-Match rule.  The order is in place until at the minimum October 1, 2007 when the hearing continues.  Due to the restraining order the 2006 No-Match letters from the SSA will also be delayed.

For additional information concerning the DHS No-Match Rule please see our past blog entry and/or go to ICE’s Safe Harbor / Information on No-Match website at: http://www.ice.gov/partners/safeharbor/index.htm.

Would your company benefit from amending to a Safe Harbor plan Design which would:

Allow their plan to automatically "pass" the ADP/ACP tests and thereby avoid having to take corrective actions such as issuing refunds to Highly Compensated Employees(HCEs) or Making Qualified Non elective Contribution to Highly Compensated Employees(NCHEs)

Allow their plan to "satisfy" Top-Heavy minimum contribution requirements, under certain circumstance; and

Help their HCEs maximize contributions.

We’re offering to run a no-cost analysis to help determine whether a Safe Harbor design is right for your retirement plan.

A house bill has recently been introduced that will significantly change the liability of misclassifying employees as independent contractors.

A bill concerning employee status was introduced in the House on July 30 by Rep Jim McDermott (D-Wash). The bill, H.R. 3408 or Taxpayer Responsibility, Accountability, and Consistency Act of 2009, makes it substantially harder to avoid employment tax liability for misclassifying an employee as an independent contractor, repealing the safe harbor provisions of current Section 530 in the Code. The bill also states “any individual who performs services for a taxpayer may petition (either personally or through a designated representative or attorney) for a determination of the individual’s status for employment tax purposes”. In addition, H.R. 3408 would significantly increase (by 1,200% with some fines) employer penalties for misclassification.