"Talkers are no
good doers," explains a pragmatic criminal in one of Shakespeare's
tragedies. Sweet words are no substitute, and no
match, for action when it is needed.
How else can we
explain that over 7 million unauthorized individuals are a
part of the workforce and that the government has identified most
of these workers and their employers and yet has failed to do so
much as to instruct them that they may be subject to legal sanction
for breaking the law? For all the talk about the "immigration
crisis," remarkably little progress has been made in dampening the
economic allure of illegal immigration.
workforce is too big to address through police action alone. The
quickest gains to enforcement, at the least effort and
expense, will come through giving employers the incentive to follow
the law and steer clear of illegal labor. Specifically, the
government needs to target its enforcement efforts to
encourage employers to verify the work statuses of employees they
have reason to believe may be unauthorized to work, as they
are already required to do by law, and to cease employing
The best approach
to this problem is the use of "no-match" letters. These letters
inform an employer that the Social Security Administration (SSA)
was unable to match its employees' wage reports (submitted
through a standard W-2 form) with the information in its
The bulk of
no-match letters concern unauthorized workers. Because no-match
letters are so well targeted and easy to act on, they would be
among the least burdensome means of improving workplace
immigration-law compliance for law enforcement, employers, and
employees. At the same time, they promise to be very effective at
helping honest employers to sort out unauthorized workers and
encouraging businesses to stick with legal labor.
In 2007, the
Department of Homeland Security (DHS) chose to use a carrot, not a
stick, to persuade more employers to use no-match letters to
determine whether their employees are authorized to work in the
United States and to terminate those who are not. It issued a new
rule clarifying that receipt of a no-match letter "may," depending
on the circumstances, constitute constructive knowledge that a
worker is unauthorized and granting employers a safe harbor from
immigration enforcement actions based on no-match letters when
they take certain simple actions, such as double-checking
their records. DHS drafted an insert, to accompany
no-match letters, explaining how to take advantage of the safe
groups were quick to protest, admitting that this new approach
would actually have an impact on illegal employment. Last
October, a federal court issued a preliminary injunction
against enforcement of the new rule and mailing of the inserts on
the grounds that DHS did not sufficiently justify its change
in policy, may not have the statutory authority to promise an
additional safe harbor from anti-discrimination lawsuits on the
basis of actions taken in response to the receipt of no-match
letters, and did not conduct a required "regulatory flexibility
analysis." In response, DHS has proposed a
supplemental rule, effectively resolving the court's three
concerns. If litigation over the letters continues,
as is probably inevitable, the new rule will likely hold up in
Administration deserves praise for attempting to use no-match
letters in immigration enforcement; but with time to act running
out, and little likelihood that the next Administration will focus
on workplace enforcement, the Bush Administration must move
quickly to implement the supplemented rule. Sending out a full
round of the updated no-match letters this year could be enough to
cement the new policy in place.
meanwhile, should clarify the law to put a quick end to the
litigation and to allow SSA to share no-match data directly with
DHS to target law-enforcement efforts more effectively. At a
time when the failure of immigration policy is on many voters'
minds, the Administration and Congress need to act soon to
demonstrate that they are more than just talkers when it comes to
are not new. They are a tested component of the Social Security
system, in use for nearly 30 years. SSA is required to track
workers' wage histories for the purpose of calculating Social
Security benefits and collects this information from the W-2
forms that employers submit each year for each of their employees.
Each year, SSA receives between 8 million and 11 million W-2 forms
containing names and Social Security numbers (SSNs) that do not
match the information in its records. It sends each of these
workers a letter alerting the worker to this discrepancy,
explaining the possible consequences of not receiving credit for
earnings, and giving guidance on how to fix the problem.
1994, SSA started sending no-match letters to employers who
submitted 10 or more W-2 forms that could not be matched to SSA
records or who have no-matches for more than one-half of 1 percent
of their workforces. These letters inform employers of the
no-matches and explain common reasons for them, such as
typographical errors, name changes, and incomplete W-2
forms. The majority of the individuals named in
the no-match letters sent to employers are aliens unauthorized to
work in the United States.
no-match letters, then, are a powerful tool for the
enforcement of immigration law that has been underutilized. Yet,
although the "knowing" employment of an alien unauthorized to work
in the United States is illegal under the Immigration Reform
and Control Act of 1986 (IRCA), the legal significance of
receiving a no-match letter-which may give an employer reason
to suspect that a worker is not authorized-to this inquiry was
never made clear. Under Immigration and Naturalization Service
(INS) regulations, knowledge that an employee is unauthorized can
be actual or "constructive," which is "knowledge which may be
fairly inferred through notice of certain facts and
As a result of
this general language, some employers are uncertain as to whether
receiving a no-match letter would amount to constructive knowledge
that an employee is unauthorized to work and that the employer is
thus subject to civil and criminal liability for violating the law.
Over the years, INS issued a number of informal guidance letters to
employers who had inquired about this issue. Though these letters
did vary somewhat in their advice, they generally explained that
while "mere receipt of an SSA no-match letter" alone would usually
not prove to be constructive knowledge, "employers cannot turn
a blind eye to SS no-match letters and should perform reasonable
due diligence." INS, however, never released any public
statement on the matter.
took advantage of this uncertain state of affairs. According
to a report by SSA's Inspector General, over 70 U.S. employers had
more than 5,000 no-match employees apiece in 2002. Six employers
had more than 15,000 apiece, and one topped out at 36,000.
Unauthorized labor is rampant across entire industries, such as
food services and agriculture. The Western Growers
Association, for example, estimates that "50 to 80 percent of the
workers who harvest fruit, vegetables, and other crops are
illegal immigrants," while the National Council of
Agricultural Employers puts the figure at 76 percent.
Incredibly, such employers routinely claim that even those
enormous figures-even when accompanied by such telltale signs
as multiple employees submitting the same SSN, SSNs with all zeros,
and SSNs with the Area Number "666"-are not sufficient to
confer constructive knowledge that their workers were
In August 2007,
INS promulgated a formal rule on no-match letters to ensure greater
uniformity of enforcement and "to eliminate ambiguity regarding an
employer's responsibilities upon receipt of a no-match letter."
Specifically, the rule added to the definition of "constructive
knowledge" an example of a circumstance that "may, depending on the
totality of relevant circumstances," indicate constructive
knowledge: "written notice to the employer from the Social Security
Administration reporting earnings on a Form W-2 that
employees' names and corresponding social security account
numbers fail to match Social Security Administration records."
This provision, though more specific and legally binding, is
otherwise very similar to the informal advice that INS had issued
In addition to
clarifying the definition of "constructive knowledge," the new
regulation created a safe harbor for employers who receive no-match
letters. An employer will not be considered to have constructive
knowledge, based on receipt of a no-match letter, that an employee
is unauthorized to work in the U.S. if the employer (1) checks its
records to ensure that it did not make a clerical error; (2) asks
the employee mentioned in the letter to confirm the accuracy of his
or her information; (3) if necessary, asks the employee to resolve
the issue with SSA within 90 days of receipt of the letter;
and (4) if the issue was not resolved, attempts to re-verify the
employee's employment eligibility without using any documents
containing a disputed Social Security number.
According to the
new regulation's preamble (though not the regulation itself),
employers who take these steps would also enjoy a safe harbor from
government lawsuits under IRCA's anti-discrimination
provision, which prohibits discrimination on the basis of
national origin and citizenship status. Failure to take these
steps does not mean that an employer possesses knowledge that an
employee is unauthorized to work, but merely that DHS may, as
before, use receipt of the letter as evidence of constructive
knowledge of that fact.
employers of the safe harbor and their obligations under IRCA, SSA
revised its no-match guidance. The proposed no-match letter for
2007 (since withdrawn due to a court injunction) adds an additional
"common reason" for a no-match: "The name or Social Security number
reported is false, or the number was assigned to someone else."
The new letter also states clearly that the letter "does not, by
itself, make any statement about an employee's immigration status"
and that the employer should follow the instructions in the DHS
insert accompanying the letter.
The DHS insert
(also enjoined by the court) advises employers, through a series of
questions and answers, of what steps they should take in response
to having received the no-match letter. It advises recipients not
to disregard the no-match letter, because if any employees named in
the letter are found to be unauthorized, DHS could "determine
that you have violated the law by knowingly continuing to employ
unauthorized persons," which would lead to civil and criminal
sanctions. Instead, employers should follow the four steps
described above to take advantage of the safe-harbor
The new rule and
accompanying letters were an attempt to inform employers of their
obligations under IRCA and of the risk they run by turning a blind
eye to their employees' false or forged credentials. That this
rule would have been successful had it been fully implemented last
year, convincing employers to do their due diligence when they have
reason to believe that an employee might not be authorized to work
within the United States, is indicated by the great speed with
which groups that oppose the enforcement of immigration law moved
to challenge it.
Within two weeks
of the new regulation's release, a group of labor unions filed suit
in federal court to block it, accusing DHS of attempting to
"commandeer the Social Security tax system for
immigration-enforcement purposes." Specifically, they alleged
that DHS's revised definition of "knowing" was inconsistent with
IRCA, that IRCA denied INS the authority to require employers to
re-verify workers' statuses, that the regulation was "arbitrary and
capricious" under the Administrative Procedures Act, and that
neither DHS nor SSA has statutory authority to use no-match letters
as a tool to enforce immigration laws. The unions won first a
temporary restraining order and then a preliminary injunction
preventing the new rule from going into effect and the new no-match
letters from being sent.
Charles Breyer rejected the unions' broadest, most strident claims.
The revised definition of "knowing" was consistent with IRCA,
and IRCA did give INS the authority to require employers to
re-verify workers' authorizations. There was a "rational
connection" between the use of no-match letters in immigration
enforcement and evidence that the letters reliably indicate
immigration violations. And neither DHS nor SSA exceeds its powers
by working with the other to use the Social Security program to
inform employers of their obligations to follow immigration
laws and as evidence of violations.
court granted a preliminary injunction on the basis of three
"serious questions going to the merits of the plaintiffs'
contentions" and the fact that the "balance of hardships" if the
rule does go into effect "tips sharply in plaintiff's favor"
because some employers would fire workers named in the revised
no-match letters. In contrast, the court said, delay
in implementation would not irreparably harm the government, which
had already waited a year since closure of the comment period to
promulgate the final rule and so could wait longer while the merits
of the plaintiffs' claims are resolved.
Of the court's
three findings supporting the injunction, the only substantive one
concerned a provision in the regulation's preamble and similar
language in the DHS insert stating that employers would not face
government lawsuits under IRCA's anti-discrimination provision when
they terminate employees after following the safe-harbor
provisions described in the rule and the letter. Because these
lawsuits are brought by the Department of Justice (DOJ), not DHS,
the court questioned whether this provision exceeds DHS's authority
The court's other
two adverse findings concerned the procedures followed by DHS in
promulgating the new regulation, rather than its substance.
regulation's position that no-match letters should put
employers on notice of a possible immigration-law violation was
"arbitrary and capricious," as defined by the Administrative
Procedures Act (APA), because it "departs from agency
precedent without explanation." Agencies may change policies,
but "when they do so they must provide a reasoned analysis
indicating [that] the prior policies and standards are being
deliberately changed, not casually ignored." The court quoted from
several letters to employers, supplied by those
challenging the regulation, stating that a no-match letter
alone would not be sufficient to establish constructive knowledge
regarding the employment eligibility of an employee. Because
"DHS has changed course" in its policy, it was required to present
a "reasoned analysis" of its decision to comply with the
the court ruled that DHS had impermissibly failed to conduct a
Regulatory Flexibility Act (RFA) analysis. The RFA, among other
things, requires the agency to state what steps it has taken to
minimize the impact of a regulation on small businesses. DHS had
argued that no such analysis was required because the new rule did
not "mandate any new burdens on the employer…but merely
adds specific examples and a description of a 'safe harbor'" and
because the rule was solely interpretive and so not subject to RFA
analysis. The court rejected these explanations as inconsistent and
stated that the new rule, in fact, "mandates costly compliance" and
so would seem to require an RFA analysis.
plaintiffs had raised serious questions about the propriety of
the new regulation and had demonstrated likely harm from
enforcement, the court granted a preliminary injunction
enjoining enforcement of the new regulation.
any of the questions raised by Judge Breyer, in March of this year,
DHS issued a "supplemental proposed rule" addressing the court's
three findings. Because the court's decision was
based on narrow grounds-its opinion did not question whether the
new rule was irrational or, in its major provisions, beyond
DHS's statutory authorities-no change in the rule itself was
required, but only additional materials supporting the rulemaking
process and one revision in the rule's preamble.
disputed that the new regulation constituted a change in policy
under the APA, as it had never released a formal policy regarding
the legal import of no-match letters, it nonetheless supplied a
"reasoned analysis" supporting the new policy, offering two main
justifications for its issuance of the new rule.
rule was intended to "eliminate ambiguity regarding an
employer's responsibilities upon receipt of a no-match letter" and
to "provide greater predictability" for employers taking steps to
act on no-match letters. As discussed above, the agency's previous
guidance had been in letters to individual employers and had not
been entirely consistent.
the rule was intended to help "smoke out" unauthorized workers. A
growing body of evidence, mentioned above, shows that no-match
letters often indicate the presence of unauthorized workers, and
this is particularly the case in industries where illegal
labor is prevalent, such as agriculture. This kind of evidence
implies that employers may have constructive knowledge that an
employee is unauthorized to work solely upon receipt of a no-match
letter. That analysis is more than sufficient, under the APA's very
low "rational connection" standard, for a change in policy to avoid
being "arbitrary and capricious."
though still disputing the need for a Regulatory Flexibility Act
analysis, DHS simply undertook one and published its results as an
attachment to the supplemental rule.
The one revision
made in the previously released rule was to strike the statement
that promised a safe harbor from government anti-discrimination
lawsuits. This text, as part of the preamble, was not actually
a part of the regulation and would not have had the force of law,
and in any case, the bulk of such suits are filed by individuals,
not the government. The purpose of the text was to limit DHS's
own discretion in filing such lawsuits, which it is permitted to do
even though DOJ has primary enforcement responsibility.
DHS stated that it will work with DOJ to update DOJ's guidance on
employers' anti-discrimination obligations and revise the
language used in its proposed insert accordingly.
supplemental rule, DHS has taken a pragmatic approach, addressing
all three of Judge Breyer's findings that support the preliminary
injunction against implementation of the rule.
DHS is now in a
strong position to put its new no-match strategy into action, and
it must do so with haste if it is to have an impact, given the
uncertainties of enforcement beyond inauguration day in 2009. DHS
and SSA should prepare to send out no-match letters for the 2007
tax year that instruct employers on their legal obligations and the
serious consequences of turning a blind eye. No doubt the same
parties as before, or their allies, will seek further delay in
court, but the supplemented rule will likely stand up to
judicial scrutiny. Then the federal government can take this small
step toward getting serious about immigration enforcement.
also act to speed this process. For all its talk of getting tough
on immigration and cracking down on companies that continue to
employ unauthorized workers, Congress has dropped the ball on
no-match letters. DHS delayed publishing its final no-match rule
for a year to see whether Congress would enact a comprehensive
immigration reform updating and clarifying its authorities to use
no-match letters and share no-match data. Comprehensive reform, in
the end, went nowhere, and Congress has even failed to act on
several enforcement-focused proposals from both Democrats and
Republicans that include no-match provisions. It still has an
opportunity both to speed deployment of this tool by putting an end
to the protracted litigation and even to make the use of no-match
letters more effective.
leading immigration enforcement plan, the Secure America Through
Verification and Enforcement Act (SATVEA, H.R. 4088), sponsored by
Representative Heath Schuler (D-NC), includes strong no-match
provisions. This legislation would go a step farther than DHS's new
rule, requiring that, in its no-match letters, SSA "instruct
employers to notify listed employees that they have 10
business days to correct the mismatch with the Social Security
Administration or the employer will be required to terminate their
employment." This would, in effect, make failure to
take timely action on a no-match letter conclusive evidence that an
employer has knowledge that an employee is unauthorized to
work, exposing the employer to civil and criminal penalties.
clarifies SSA's authority to share no-match information with DHS.
Specifically, it would "require that information regarding all
unresolved mismatch notifications and regarding all multiple use
notifications that lead to the identification of an unauthorized
user of a social security account number be shared with the
Secretary of the Department of Homeland Security on a timely
basis." DHS could then use this information to target its workplace
Though over 150
Members of Congress have joined SATVEA as cosponsors, the House
leadership has refused to schedule a vote on the bill.
Unless Congress acts, there will be more time-wasting
lawsuits, and further delay on implementing no-match immigration
enforcement will be inevitable. Nonetheless, the
Administration should press forward with the new rule, as
supplemented, and continue to explore other ways in which SSA and
DHS might share information under their current statutory
Over 7 million
unauthorized workers fill American jobs. The Social Security
Administration's no-match letters already reach the employers of
millions of these unauthorized workers, but many do not know
what specific steps they should take in response to a no-match
letter or that they may face penalties for simply ignoring it.
DHS's new safe-harbor rule gives the existing law teeth by
informing employers of their obligations and stating DHS's
intent to hold employers to them while providing a simple,
straightforward process for employers to comply with the law and
eliminate the legal uncertainty that they now face.
DHS's response to
legal challenge and delay was pragmatic, calculated specifically to
address the court's concerns about the new rule without
weakening it and to begin the implementation process as
quickly as possible. The time for action, however, is running
short, with only a few months in office remaining for the current
Administration and grave doubts that its successor will make
immigration enforcement a priority.
Moving forward on
no-match letters now could make a difference for years, no matter
the immigration policy of the next Administration. After all,
the new no-match letters, once mailed, cannot be unsent, and the
legal advice they provide to employers, especially as concerns
constructive knowledge of their employees' work authorization,
cannot be taken back. The talkers have done their part, and now it
is time for the doers at DHS to act.
Stimson is Senior Legal Fellow and Andrew M.
Grossman is Senior Legal Policy Analyst in the Center
for Legal and Judicial Studies at The Heritage
 Richard III, Act I,
 Chirag Mehta, Nik
Theodore, and Marielena Hincapié, Ctr. for Urban Econ. Dev.,
Social Security Administration's No-Match Letter Program:
Implications for Immigration Enforcement and Workers' Rights I
SSAnomatchreport.pdf. Estimates range from about
one-half to as high as 90 percent. James Jay Carafano, Court
Stops Social Security "No-Match" Immigration Enforcement, The
Heritage Foundation, Sep. 6, 2007, http://www.heritage.org/Research/immigration/wm1600.cfm.
 Safe Harbor Procedures
for Employers Who Receive a No-Match Letter, 8 C.F.R. 274A
 See, e.g., Pia
Orrenius, "No Match," No Sense, Wall St. J., Aug. 13, 2007,
available at http://online.wsj.com/article/SB118696799111695643.html
("The new no-match program…has the potential to impact the
employment of three to four million undocumented workers….
Fears of no-match letters reflect a simple reality-this could
 American Federation of
Labor v. Chertoff, No. 07-04472, 2007 WL 2972952 (N.D. Cal. Oct.
 Safe Harbor Procedures
for Employers Who Receive a No-Match Letter: Clarification, 73 Fed.
Reg. 15944 (2007) [hereinafter Supplemental Rule].
 Chertoff, 2007 WL
2972952 at *1.
 See Mehta et
al., supra note 3, at 36-38.
 8 U.S.C. §
 8 C.F.R. §
 Supplemental Rule, 73
Fed. Reg. at 15948.
 See, e.g.,
Chamber of Commerce of the United States, [Proposed] Complaint in
Intervention at 12, American Federation of Labor v. Chertoff, No.
07-04472, 2007 WL 2972952 (N.D. Cal. Oct. 10, 2007).
 Supplemental Rule, 73
Fed. Reg. at 15949.
 Compare with
letter from Paul Virtue, General Counsel, Immigration and
Nationalization Service, in Supplemental Rule, 73 Fed. Reg. at
15948. ("[A]n employer who discovers that its employee has lied on
a Form I-9 about any fact is fully entitled to take reasonable
steps…to ensure that the employee has not also lied about
his or her work authorization or anything else on the form,
and…if it continues the employment without doing so, it is
taking a risk that it may be held liable if in fact the employee is
 8 C.F.R. §
 72 Fed. Reg. 45611,
 Complaint at 1,
American Federation of Labor v. Chertoff, No. 07-04472, 2007 WL
2972952 (N.D. Cal. Oct. 10, 2007).
 Chertoff, 2007
WL 2972952 at *1, 5-6.
 Supplemental Rule, 73
Fed. Reg. at 15945.
 Id. at 15949
("neither the INS nor DHS had ever released any formal statement of
agency policy on the issue," which left employers and labor
organizations "free to stake out positions on the question that
best served their parochial interests." Indeed, "The August 2007
Final Rule was designed to remedy this confused
 See Motor
Vehicle Mfrs. Ass'n of U.S. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983) (stating "an agency rule would be arbitrary and
capricious if the agency has relied on factors which Congress has
not intended it to consider, entirely failed to consider an
important aspect of the problem, offered an explanation for its
decision that runs counter to the evidence before the agency, or is
so implausible that it could not be ascribed to a difference in
view or the product of agency expertise").
 Supplemental Rule, 73
Fed. Reg. at 15952-54.
 This 10-day deadline
may not allow employers and employees enough time to resolve
mismatches that are due to routine administrative mistakes,
especially when it is SSA's records that are mistaken. SATVEA would
be no less powerful an enforcement tool with a 30-day deadline,
which would allow sufficient time to resolve legitimate errors.
 See Alan Ota
and Molly Hooper, House Democrats Want Deal on Visas For Skilled
Foreign Workers, CQ Today, April 2, 2008.