On Wednesday, a federal district court judge in San Francisco issues a preliminary injunction blocking implementation of the Department of Homeland Security’s new “No Match” letter regulations.  The new rules are intended to provide guidance to employers who receive notice that employees’ Social Security numbers do not match information contained in government databases.  The rules would require employers to terminate employees unless the discrepancy is cleared up within set periods of time.

The new DHS regulations were legally challenged by an unusual coalition of business, labor and immigration rights groups.  They contended that the rules create unfair burdens on businesses and employees due to widespread errors in the government databases relied upon to provide verification of work eligibility.  Last month, another federal judge issued a temporary restraining order against the new rules.

This ruling will likely delay implementation of any new DHS rules until at least 2008.  In addition, the judge enjoined DHS and the Social Security Administration from issuing 140,000 new No Match letters planned as part of rollout of the new regulations.  In his decision, the judge did not agree with union arguments that issuance of any future No Match letters is not permitted by law.  The reasoning for the preliminary injunction was limited to the likelihood of mistakes resulting from errors in federal records.

DHS could immediately appeal the injunction, or proceed to a full hearing on the merits of the lawsuit.