“No Match” Letters are Important to Your Business

New federal regulations will hold employers financially and criminally accountable for the legality of their workers. Those employing construction workers all over the United States should be on alert, and should be examining their hiring and employment practices in anticipation of the effectiveness of these regulations.


Congress just passed a new law regulating immigrant workers, and more importantly, the employers who pay them! In the wake of the recent immigration debate, you may have heard about these new regulations setting tougher standards for businesses that receive “no match” letters, but it’s crucial you understand the impact these regulations have on your business.

These new regulations set steep fiscal penalties for violating employers, and even criminal prosecution, and so it’s time for your business to comprehensively examine its employment and immigration practices.
The regulations were supposed to go into effect on September 14, 2007. In August 2007, however, the ALF-CIP, American Civil Liberties Union and other labor groups sued the federal government claiming the new rules unfairly burden employers and threaten workers’ rights, and a Temporary Restraining Order was issued suspending the effectiveness until a hearing on October 1st.

While the effective date of this legislation has been postponed, employers should by no means consider this a pardon from complying with the statute. Instead, employers should use the extra weeks to ensure their employment paperwork is in order.

What is a No-Match Letter?

Employers should be familiar with two common employment forms: the I-9 and the W-2. Each new employee is supposed to fill out an I-9 to establish their status as an authorized worker in the United States. Further, employers are required to report employee wages annually on W-2 forms.

Well, upon receipt and review of the annual W-2 forms by the Social Security Administration (SSA), if an employee’s name and social security number does not match the SSA’s records, the SSA will send the employer a “no match” letter, essentially notifying the employer of the discrepancy.

How Will My Business Be Affected?
Every business should be concerned, or at least alert, to the new Department of Homeland Security regulations. The Social Security Administration is just weeks away from sending some 140,000 no-match letters to employers all over the country, and if your business is a potential recipient, it faces serious consequences for tardy and/or inaccurate responses.

Under the new regulation (8 C.F.R. Part 274a), an employer must take steps to clear up the discrepancy within a certain time period (in most cases, 90 days) or face fines between $250.00 and $10,000.00 per undocumented worker.

This is a federal policy intended to crack down on workers who are in the country illegally. The Immigration and Customs Enforcement (ICE) has stated that it believes criminally charging and seizing the assets of employers will create the kind of deterrence that was previously absent in worksite enforcement efforts.

Effects On The Construction Industry

Some construction industry experts are predicting “economic chaos” will result if the new federal immigration regulations are launched. No one knows for sure the number of illegal workers in the construction industry, but many have suggested that it could be as high as 65%.

In New Orleans specifically, a study by professors at Tulane University and University of California have suggested that there has been a sharp increase in illegal hispanic construction workers since Hurricane Katrina, with about 25% of the construction workers rebuilding the city being illegal immigrants.

If you are a contractor its important to have a good understanding of the new DHS laws and regulations to ensure that the “economic chaos” in the construction industry doesn’t spill into your company.

What To Do If You Receive a “No Match” Letter?
So what should you do if you receive one of the 140,000 SSA “no-match” letters?

Under the regulation, an employer who receives a “no-match” letter will be provided with a “safe-harbor” from the Department of Homeland Security if the employer takes “reasonable steps” to resolve the mismatch.

With each no-match letter, you will also receive a set of instructions and procedures that your company should follow verbatem, providing within tight time periods (mostly 90 days) either a resolution to the mismatch or requiring the employee to promptly resolve the discrepancy with the SSA.

Once your business receives a “no-match” letter, they are considered to have “constructive knowledge” of the unauthorized employee, and if they fail to qualify for the “safe harbor,” they will be subject to the statutory penalties.


As mentioned, the effective date of the regulations have been postponed by a federal judge’s Temporary Restraining Order. While the regulation was previously scheduled to take effect on September 14, 2007, it has been postponed until at least October 1st.

Wolfe Law Group is monitoring the status of this litigation and will provide additional information as it becomes available. In the meantime, contractors should familiarize themselves with the new regulation and ensure that their employment procedures and paperwork is ready for testing.