The Department of Homeland Security (DHS) has announced a massive regulatory and enforcement campaign to address the hiring of illegal immigrants. Its complex collection of rules sets out to make businesses more responsible for their hiring practices in the wake of increased threats from abroad.

All contractors should know about the “no match” letter rule. Employers receive no-match letters when the Social Security Administration (SSA) cannot match 10 Social Security numbers to real individuals on employer’s annual batches of W-2 forms.

There are many reasons a no-match could occur, including transcription errors or name changes due to marriage that are not reported to the SSA. The DHS warns employers not to assume the employee is at fault of wrongdoing. An employer who takes action against an employee on a mismatch letter risks violating the equal employment opportunity law.

But if a no-match individual is an illegal alien, another set of rules applies. Primarily, it questions whether the employer had actual or “constructive knowledge” that it hired an illegal alien.

DHS is changing its rules concerning constructive knowledge under the Immigration and Nationality Act (INA). The existing rule already defines constructive knowledge, but the DHS is amending it so that failure to act on a no-match letter could be seen as evidence of constructive knowledge. Even so, the decision on whether to act on the basis of a no-match letter is left up to the employer.

The DHS outlines what it expects an employer to do if it receives a no-match letter, and if employers follow these steps, they will be protected in a safe harbor. These steps include promptly checking the accuracy of records ensuring employer compliance, asking the employee to confirm his or her information, asking the employee to resolve the issue with the SSA if the employer is not at fault, ensuring the instructions of the SSA letter are followed, and if necessary, completing a new I-9 Form for the employee.

To make checking on employee status easier, the DHS has changed the name of its voluntary employment verification system to E-Verify, and it soon will drop the voluntary nature of the process for federal contractors and vendors. E-Verify will become a contract performance requirement, and if a federal contractor fails to use the system, their contracts will be subject to termination. The DHS will continue to encourage other employers to participate voluntarily in the E-Verify program, but the program will not be mandatory for nonfederal contractors.

In another change, the DHS announced it would publish a regulation to reduce the number of documents employers must accept to confirm the identity and work eligibility of their employees. Currently, no fewer than 29 categories of documents can be used to establish identity and work eligibility. This may change soon.

The DHS has indicated it will raise civil fines imposed on employers who knowingly hire illegal immigrants by approximately 25 percent, with the criminal penalty for violations being $3,000 for each unauthorized alien, up to six months jail time or both. Civil penalties are similarly increasing.

The no-match linkage is controversial to say the least, but for most employers, it will not require any immediate action. If a no-match letter is received, an employer will have to weigh the potential liability in deciding whether to undertake the steps established by the DHS.  EC