Revised As Of December 20, 2007 - Recent Developments: Social Security “No Match” Rule and E-Verify Updates

Social Security “No Match” Litigation Stayed

On Friday, December 14, the U.S. District Court for the Northern District of California granted the Department of Homeland Security’s (DHS) request to stay the litigation surrounding its new Social Security “no match” rule.

Originally scheduled for an effective date of September 14, 2007, the proposed rule would have required employers who received a “no match” letter from the Social Security Administration (SSA) or Immigration and Customs Enforcement (ICE) to take specific steps to resolve the issue. Under the rule, employers who failed to take those steps would risk a finding that they had “knowingly” hired an unauthorized worker. In October, the court issued a preliminary injunction that prevented the government from implementing the new rule and stopped the SSA from sending notices to employers informing them of the new rule. The court granted the injunction based on its decision that implementation of the new rule would cause irreparable harm to employers and workers. DHS appealed this decision.

While its appeal is pending, DHS plans to revise the rule to address the court’s concerns about the rule’s legality. Once DHS revises the rule, it is expected to ask the court to vacate the preliminary injunction. Depending on the court’s decision, DHS will drop its appeal. DHS has until March to revise the rule. The lawsuit has been suspended until a new final rule is issued or until March 28, 2008, whichever comes first.

New E-Verify Policy Announced

The DHS announced that employers with more than 1,000 employees may sign a single Memorandum of Understanding (MOU) to cover all of the hiring sites for which the employer chooses to use the E-Verify system. [E-Verify is the federal government’s voluntary employment authorization verification program.]  Executing the MOU will allow the employer to use a single E-Verify identification number for all of the hiring sites that will participate in E-Verify. An employer can add and remove individual sites as needed.

While an employer has always had the freedom to choose to use E-Verify on a site-by-site basis, employers previously had to either register the entire company (and use E-Verify at all sites) or complete a separate MOU for each hiring site. The MOU has not been amended by DHS to reflect this policy change, but such amendments are being considered.

Illinois: E-Verify Litigation Stayed

On Friday, December 14, the U.S. District Court for the Central District of Illinois stayed the litigation over the Illinois Right to Privacy in the Workplace Act (the “Act”). The Act prohibits Illinois employers from using E-Verify until the Department of Homeland Security (DHS) and the Social Security Administration (SSA) improve the system. The Act was set to take effect on January 1, 2008. The Department of Homeland Security brought suit in September, requesting that the law be enjoined, but last week Illinois Attorney General Lisa Madigan and the DHS jointly requested that the court stay the litigation.

The stay will give the Illinois legislature an opportunity to revise its law in such a way that will render further proceedings moot. Litigation is currently stayed for a 60- day period; at the end of that period the lawsuit will either recommence or will be dismissed based on the actions taken by the Illinois legislature.