Employment Law Commentary, September 2007

The Department of Homeland Security (DHS) recently promulgated a final regulation that could dramatically

change employers’ responses to Social Security no-match letters. For many years, employers have been receiving no-match letters from the Social Security Administration (SSA) notifying them when an employee’s name or Social Security number (SSN) listed on the employer’s W-2 form does not match the SSA’s records. (See MoFo July 2002 Employment Law Commentary: “A Social Security ‘No Match’ Letter: Now What?”) These letters were purely informational and did not necessarily require any action on the part of the employer.

DHS’s new regulation, which was initially proposed in June 2006 and finalized in August 2007, significantly

increases employers’ responsibilities upon receiving such letters. However, any immediate impact has been

delayed as a legal battle plays out in federal court. A federal court in the Northern District of California has

temporarily enjoined the government from taking any further action to enforce the new regulation. A hearing on

a preliminary injunction against the new regulation is scheduled for October 1, 2007.

This article addresses the changes that this regulation poses, the steps employers would have to take to

address them, and the current status of its implementation.