Employers Beware: Illinois Rolls Out Strict No-Match, Document Discrepancy Notice Response Rules

Takeaways

• Illinois employers may not rely solely on SSA “no-match,” IRS discrepancy notices, or similar third-party notifications to take disciplinary or termination action.
• Employers must meet strict notice, timing, and communication requirements, including providing employees an opportunity to respond and to involve a representative.
• Employees, the attorney general, and designated advocacy organizations may bring civil actions.

Illinois has enacted a significant expansion of the Right to Privacy in the Workplace Act, imposing new substantive and procedural requirements on how employers must respond when they receive notices reporting discrepancies in an employee's Social Security number, Individual Taxpayer Identification Number, or other identifying information.

While the notices themselves are not new, Illinois SB 2339 has established a comprehensive framework governing how employers may act upon them, with heightened litigation exposure for employers. The law takes effect immediately. It reflects a broader state-level policy shift toward protecting workers, particularly immigrant workers, from premature or unfounded employment consequences.

Prohibition on Adverse Employment Action Based Solely on Third-Party Notices

SB 2339 prohibits employers from taking adverse action (such as reduction in hours, suspension, termination, or any other form of discipline) solely because a federal agency or non-immigration entity, such as the Social Security Administration, IRS, or an insurance carrier, issues a notice indicating a discrepancy in identifying information.

This requirement aligns with long-standing federal guidance that SSA no-match letters do not constitute evidence of immigration violations.

Employers must, therefore, treat these notices as administrative matters, not as employment-authorization determinations.

Mandatory Employee Notification, Procedural Protections

Illinois now requires employers to meet specific notice and communication obligations within five business days of receiving, or deciding to act on, a discrepancy notice.

Employers must notify the employee (and any authorized representative) of:

• The nature of the discrepancy;
• Any deadlines imposed by federal law; and
• Any action requested by the employer.

Employees may have a representative present at any discussions, and employers must provide the original notice upon request. These provisions are intended to prevent premature employment decisions based on incomplete or inaccurate information.

Expansion of Enforcement Mechanisms

SB 2339 authorizes multiple avenues for enforcement. Employees may bring suit directly for violations.

In addition, labor unions and qualifying nonprofit organizations may bring actions in the name of the State, and the Illinois attorney general may also intervene or prosecute claims. These mechanisms substantially increase potential exposure for employers given the possibility of concurrent interest from employees and outside advocacy groups.

Safe Harbor, Compliance Considerations

The statute provides a narrow safe harbor for employers that act in good-faith reliance on guidance from the Illinois Department of Labor or the Department of Homeland Security or that make a bona fide administrative error not affecting pay or employment. This exception is limited, and employers should not expect any reliance on discrepancy notices to fall within it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.