Worksite Enforcement Through the Lens of the No-match Letter

• Publication year: 2019

Becki Young^*

Abstract: Between March and May 2019 the Social Security Administration issued no-match letters to nearly 600,000 employers, resuming a controversial practice that had been in place for nearly 20 years, before the Obama administration terminated it in 2012. The current no-match effort appears to be directly related to President Trump's Buy American and Hire American Executive Order, and this administration's aggressive worksite enforcement actions. This article examines the historical context in which no-match letters arise, discusses best practices for employers who receive no-match letters, and looks at the potential legal implications of no-match letters, including information sharing between federal agencies.

Between March and May 2019, the Social Security Administration (SSA) mailed no-match letters to nearly 600,000 employers—with the greatest impact falling on the hospitality, construction and agriculture industries.¹

We are unaware of any official statistics about the total number of workers affected (most letters related to multiple employees), but we can make an estimate using recent statistics. Reportedly, there are about 11 million undocumented immigrants in the United States, about 8 million of whom participate in the labor force.² Studies have estimated that about half, or 4 million, pay federal income taxes³ and about half again are working on fake or stolen social security numbers (SSNs).⁴ The SSA announced that this time around it is sending no-match letters to employers with even a single mismatch, meaning the current round of no-match letters could affect roughly 2 million workers—and their employers.

What Is a No-Match Letter?

Annually, employers send SSA millions of earnings reports (W-2 Forms) in which the combination of employee name and SSN does not match SSA records. In some of these cases, SSA sends a letter, such as an Employer Correction Request Notice (EDCOR),⁵ that informs the employer of the mismatch. This letter is commonly referred to as a "no-match letter." There can be many causes for a no-match, including clerical errors and name changes.⁶ One potential cause may be the submission of information for an individual who is unauthorized to work in the United States and who may be using a false SSN, or an SSN assigned to someone else.⁷

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This article examines the history of U.S. worksite enforcement preceding the current wave of no-match letters and considers the potential implications to employers who received such a letter in 2019.

History and Context: Why Is the Government Sending No-Match Letters?

The question of who should be allowed to immigrate to, and work in, the United States is nearly as old as the country itself.

When U.S. immigration laws were first organized into a single body of text, the Immigration and Nationality Act of 1952 (INA) (also known as the McCarran—Walter Act), the law did not include employer enforcement provisions. The Act stated that it was a crime to aid, harbor, or abet an undocumented person, but specifically excluded employment from that definition under something called the Texas Proviso, named for the delegation demanding its inclusion.⁸

1981—1989 Ronald Reagan

It was not until the 1986 passage of the Immigration Reform and Control Act (IRCA), under President Reagan, that federal law prohibited the hiring and employment of undocumented workers.

Among other things, IRCA required employers to complete Form I-9 to verify the work authorization of all employees, and included employer sanctions provisions criminalizing the knowing hire, or continued employment of, unauthorized immigrants. The law also addressed concerns that employer sanctions might cause increased discrimination against legal immigrants and "foreign-appearing" U.S. citizens with provisions providing new protections from national origin and citizenship discrimination.⁹ Finally, the law granted a one-time amnesty to about 3 million undocumented immigrants.

1989—1993 George H.W. Bush

During George H.W. Bush's presidency, the level of immigration enforcement actions was low. Two significant developments during this administration were:

• Executive Order 12781, authorizing the creation of demonstration projects on alternative employment eligibility verification systems (the predecessors to E-Verify).
• Formation by Congress of the Commission on Immigration Reform (CIR) (as part of the Immigration Act of 1990) to examine U.S. immigration policies critically. This bipartisan commission was chaired by the late Congresswoman Barbara Jordan, the highly esteemed civil rights advocate, and is often referred to as the Jordan Commission.¹⁰

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1993—2001 Bill Clinton

Immigration enforcement was a mixed bag during the Clinton years.

Beginning in 1993, the SSA began sending out no-match letters, a practice that would continue for nearly two decades. The stated purpose of this effort was to ensure the accuracy of earnings records used to determine social security benefits.

By 1994, both the CIR and the Government Accountability Office (GAO) (in testimony before Congress) confirmed the decline of government resources (funding and staffing) for employer sanctions efforts, and the consequent decrease in overall numbers of investigations in recent years.¹¹ The CIR recommended a national computerized registry using data from INS and SSA as the most promising employment eligibility verification system.

On February 7, 1995, President Clinton agreed to take up the CIR's recommendation for an employment eligibility verification system and directed the heads of all executive agencies to develop and test such a system. The Joint Employment Verification Pilot (JEVP),¹² created by INS and SSA, was a direct result of this effort. Piloted in July 1997 in Chicago with 38 volunteer employers, it never came to fruition as it was superseded by the new pilot programs established under the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA).¹³

IIRIRA required, among other things, that the Immigration and Naturalization Service (INS)—which became part of the U.S. Department of Homeland Security (DHS) in 2003—conduct three distinct pilot programs for employment eligibility verification.

In 1999, INS adopted a new interior enforcement strategy focusing on cases with a "clear nexus between alien smuggling and the employment of unauthorized workers."¹⁴ In turn, the enforcement focus shifted away from worksite investigations not involving suspected alien smuggling. This focus on employers involved in migrant smuggling or other criminal activities, and employers at worksites vulnerable to terrorism, continued for the next two decades.

In 2000, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) reversed its long-held position in favor of employer sanctions bill, calling for the repeal of employer sanctions, not only because of employment discrimination but also because they believed some employers were using sanctions (or the threat of sanctions) as a tactic against labor orga-nizers¹⁵ and employees asserting other workplace rights.

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2001—2009 George W. Bush

After the terrorist attacks of September 11, 2001, worksite enforcement focused heavily on national security, including infrastructure industries and strategic targets (e.g., airports, nuclear power plants, and military bases).

In 2003, INS's investigations division, which was responsible for sanctions enforcement, was reorganized into Immigration and Customs Enforcement (ICE), part of DHS. The following statistics illustrate immigration enforcement trends in the late years of the Clinton administration and the early years of George W. Bush's presidency.¹⁶

Employer Audit Statistics

Figure 1 shows the number of employers subject to I-9 audits each year from FY 1988 to FY 2003 by the immigration authorities.

The number of audits per fiscal year dropped 77 percent¹⁷ from a peak of almost 10,000 in FY 1990 (when some critics were already expressing a concern that the level of audits was too low to be effective) to less than 2,200 in FY 2003.

Warnings and Fines

In the event an audited employer is found non-compliant, they may receive a warning (if violations are minimal and future compliance is anticipated) or they may be fined (if violations are more serious or there are charges of knowingly employing unauthorized immigrants).

Figure 2 shows the overall trend in the number of warnings issued from FY 1988 to FY 2003. The decrease is evident here as well, with a 62 percent decline from a peak of nearly 1,300 warnings in FY 1990 to fewer than 500 in FY 2003.

Figure 3 shows the number of Final Orders¹⁸ (orders to fine serious immigration violators). Again, there is a strong downward trend, dropping 82 percent from a peak of nearly 1,000 in FY 1991 to a total of124 in FY 2003.¹⁹

While overall worksite enforcement was decreasing during these years, the federal government continued its expansion of employment eligibility verification. In August 2007, the government rebranded the Basic Pilot created under IIRIRA as E-Verify, and the federal Office of Management and Budget issued a memorandum stating that all federal departments and agencies would be required to use the program. On June 6, 2008, President George W. Bush issued Executive Order 13465, mandating that certain businesses that contract with the federal government use E-Verify for employment verification.²⁰

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Figure 1. Employer Sanctions Investigations for FY 1988 to 2003

Source: Office of Immigration Statistics Performance Analysis System G-23.19 and author's calculations from the Center for Immigration Studies Employer Sanctions Database.

Figure 2. Employer Sanctions Warnings Issued for FY 1988 to 2003

Source: Office of Immigration Statistics Performance Analysis System G-23.19 and author's calculations from the Center for Immigration Studies Employer Sanctions Database.

As the government expanded E-Verify, it...