In a recent 9^th Circuit decision, the Court of Appeals ruled that the receipt of a no-match letter by an employer does not equate to constructive knowledge that a worker is unauthorized to work.¹ Constructive knowledge is defined as “knowledge that may fairly be inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition.”²

            As background, the Social Security Administration (SSA) issues a no-match letter to an employer when an employer’s W-2 records differ from the SSA’s database regarding an employee’s social security number (SSN).³ The main purpose of the no-match letters is not immigration-related, but rather to put workers on notice that their earnings are not being properly credited.⁴

            In Aramark, Aramark – a large corporation employing approximately 170,000 people in the United States – received no-match letters from SSA. In turn, the company notified 48 of its employees that they had three days to provide the correct information or evidence of new verification of employment.⁵ When 33 employees did not timely respond, Aramark terminated their employment arguing that the no-match letter was constructive knowledge of ineligibility to work.⁶ Aramark further argued that because it had constructive knowledge of employment ineligibility, the terminations were proper and as such denied liability for back wages. The Court disagreed.

             In reviewing the SSA’s and IRS’ policies and lack of penalties or sanctions stemming from the no-match letters, the Court held that the mere receipt of a no-match letter could not result in constructive knowledge that an employee was not authorized to work. Specifically, the SSA mismatches – by SSA’s own estimates – occur for a myriad of reasons including typographical errors, name changes, compound last names, and inaccurate employer records. The no-match letter itself has information advising that a SSN discrepancy does not automatically mean that an employee is undocumented or lacks proper work authorization.

            In an era of immigration enforcement, the SSA no-match letter and the implications it has on an employer’s obligations regarding employment verification will continue to be an issue addressed by both the courts and regulatory agencies. This decision illustrates that a company’s aggressive approach to abide by immigration regulations can be problematic. A constant review of upcoming changes and case law will be necessary to successfully navigate through the increasingly troubled waters of U.S. worksite compliance and enforcement.

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¹Aramark v SEIU, 9^th Cir., June 16, 2008.
²8 CFR §274a.1(l).
³Social Security Number High Risk Issues: Hearing Before the Subcomms. On Social Security and Oversight of the H. Comm. on Ways and Means, 109^th Cong. 60 (Feb. 16, 2006).
⁴ Id.
⁵Aramark v SEIU , 9^th Cir., June 16, 2008.
⁶ Id.