Topic Spotlight

 

FEATURE PRODUCTS

U.S. Master™ Payroll Guide, 2008 Edition
Everything you need to know about payroll, from employers and their obligations, to payroll withholding and tax deposits, to payroll management and administration issues.

No-match letters do not create "constructive knowledge"

The Ninth Circuit Court of Appeals has ordered a company to reinstate, with backpay, 33 employees who were discharged because their Social Security numbers (SSN) did not match the Social Security Administration's (SSA) database. The company had discharged the employees after receiving a "no-match" letter from the SSA. (The court did not address the legality of the Department of Homeland Security's (DHS) no-match regulation, which the agency has been barred from implementing since October 2007.)

The court held that the SSA's no-match letter--and the "extremely short time" the company gave the employees to correct the mismatches--did not put the company on constructive notice that it was employing undocumented workers, finding that a SSN discrepancy "does not automatically mean that an employee is undocumented or lacks proper work authorization. " The SSA even confirmed that such discrepancies " do not make any statement about...immigration status" and "is not a basis, in and of itself, to take any adverse action against the employee," wrote the circuit court. The court's decision, the first by a court of appeals on no-match letters, could help a coalition of labor unions and business groups in their lawsuit (AFl-CIO v Chertoff, NDCal, No 3:07-cv-04472-CRB) against DHS which seeks to permanently enjoin the release of the agency's no-match regulation. (Aramark Facility Servs v SEIU, 9thCir, June 16, 2008.)

For More Information

The Payroll Management Guide helps you resolve day-to-day payroll issues and guides you in effective payroll planning. This reporter instructs you how to implement proactive, efficient payroll procedures while ensuring compliance with federal, state and local requirements. Learn more »