I saw that the government is cracking down on businesses that employ illegal workers from other countries. Can you explain what the new rules are? Has there been a change in the law that employers should know about? I had heard that there can be really big fines for not complying with the law.


In March of 2003, the Homeland Security Act transferred the functions of the former Immigration and Naturalization Service from the Department of Justice to the U. S. Department of Homeland Security (DHS). The DHS is therefore now charged with enforcement of employer compliance with the country’s immigration laws. As part of that function, the DHS provides guidance that is intended to help employers comply with legal hiring requirements by outlining specific steps they should take when verifying their workers’ employment status. On August 10, 2007, the DHS also introduced new rules that are intended to get tough on businesses that employ undocumented workers. While these rules do not represent a change in the law or in the employment-verification process, they do have some significant repercussions for employers.

As you are no doubt aware, employers in the United States are required to fill out Internal Revenue Form I-9 for each individual they hire. The purpose of Form I-9 is to verify the employee’s eligibility to work in this country, and the employee must present one or more specified identification documents to the employer as evidence of that eligibility. In addition to Form I-9, employers are also required to submit Internal Revenue Service Form W-2 for each of their employees. The W-2 Form contains each employee’s name and social security number, which are then checked by the U.S. Social Security Administration (SSA).

An issue that is increasingly being faced by many employers is the receipt of a letter from the DHS notifying the employer that the immigration status or employment authorization documentation presented or referenced by one of its employees is not consistent with DHS records. The SSA also issues letters which inform employers that the social security number that has been provided on an employee’s W-2 Form does not match the SSA’s records. Out of approximately 250 million wage reports received by the SSA each year, as many as 4% belong to employees whose names and corresponding social security numbers do not match the government’s records.

There can be many reasons for these so-called “no match” letters, such as transcription errors or unreported name changes, and employers should not automatically assume that the mismatch is the result of their employee’s wrongdoing. For this reason, employers are discouraged from taking immediate adverse employment action against an individual who has generated a “no match” letter. However a mismatch result from the SSA can also be an indication of an individual’s ineligibility to work in the U.S., and should therefore be taken seriously.

The DHS’s new rules will give employers just 30 days within which to respond to a “no match” letter. In that timeframe, it is the employer’s responsibility to attempt to resolve the problem, i.e., by verifying that the mismatch was the result of a reporting error, and by correcting that error. Once the employer determines that the “no match” is not the result of its own error, it must give the employee in question 90 days within which to confirm that the information provided on his/her W-2 Form and Form I-9 is correct. If the discrepancy in the employee’s records cannot be resolved, however, the employer must terminate the employee. Failure to do so means that a business is continuing to knowingly employ an undocumented worker, which can subject the employer to monetary penalties. The DHS’s new rules also increase by approximately 25% the potential fines that an employer can face for failure to comply with the law; those fines can range from $275 to $2,200 for a first time offense, and can be as much as $11,000 for repeat offenders. The instructions for how to respond to a “no match” letter in a manner that is consistent with U.S. immigration laws are contained in an accompanying letter that employers will receive from the U.S. Immigration and Customs Enforcement (ICE).

It is expected that these new regulations will take effect 30 days after their publication in the Federal Register, which means that they should go into effect some time in late September of 2007.
– – – – – – – – – – – – – – – – – – – – – – – – – –
Back to Menu- Work Place Law 2007 Articles