Responding to the SSA’s “No Match” Letters: A How-To Guide
By: LOAN T. HUYNH & INGRID N. CULP
October 2007 (updated from August 2002 article)
The Social Security Administration (“SSA”) currently issues “no-match” letters to employers who submit more than 10 W-2s in a wage report that do not match SSA’s records and the no-matches exceed at least half of one percent of all the W-2s in the wage report. Prior to the current policy, the SSA was issuing “no-match” letters to all employers whose wage reports contained one or more no-match record. The change in policy has resulted in fewer “no-match” letters being sent to employers. In 2003, when the current policy was first implemented, SSA issued 125,000 no-match letters to employers, 770,000 less than in 2002.
Employers who continue to receive “no-match” letters still face the predicament as to what their obligations are under the law upon receipt of a “no-match” letter. The confusion and uncertainty are a result of mixed messages from federal agencies as to what actions are required by employers when they receive a “no match” letter. The SSA has clearly stated that a no-match letter “is not a basis, in itself, for [employers] to take any adverse action against the employee, such as laying off, suspending, firing, or discriminating against the individual…and makes no statement about the employee’s immigration status.” In fact, I-9 reverification or termination based solely on a no-match letter could violate anti-discrimination law. At the same time the Immigration and Custom Enforcement (ICE) have stated that an employer’s failure to adequately follow-up on no-match letters could constitute evidence of or contribute to an employer’s constructive knowledge of an employee’s unauthorized status.
In August 2007, ICE caused further confusion when it issued final regulations entitled “Safe-Harbor Procedures for Employers Who Receive a No-Match Letter” (“Safe Harbor Rule”). Under the rule, ICE describes the legal obligations of employers under current immigration laws when it receives a “no-match” letter from SSA or ICE and provides “safe harbor” procedures that employers can follow in response to a no match letter to avoid a finding by ICE of possessing constructive knowledge that an employee is working unlawfully. On August 31, 2007, the U.S. district court in northern California issued a temporary injunction against the “Safe Harbor” Rule. In light of the injunction and the cautionary directive that the “no-match” letter alone is not a basis to take adverse action against an employee and does not make a statement about the employee’s immigration status, employers should take the following steps in response to a SSA no match letter:
- Do Not Jump To Conclusions: Do not panic or terminate any employees. An employer may terminate an employee for employment eligibility violations only if the employer has actual or constructive knowledge that an employee is unauthorized to work in the United States. A “no match” letter alone does not constitute actual or constructive knowledge.
- Investigate: Do not ignore the “no match” letter. If an employer were to simply ignore a “no match” letter, ICE could certainly use this against an employer if ICE were to later learn that the employer employed an unauthorized worker. Check the employer’s records to ensure that the employer did not make a typographic error in reporting the employee’s SSN to the SSA. If there is no error, share the “no match” letter with each employee listed on the letter and advise the employee to check to be sure that the correct name and SSN has been submitted to the SSA. Do not require the employee to produce his or her social security card or any other specific documentation, as this could be considered document abuse under employment eligibility verification laws. Give the employee a reasonable amount of time to investigate and/or correct any errors. If there was an error, in addition to submitting the correct information to the SSA, the employer should also correct the employee’s Form I-9. As with any employment matter, be sure to treat all employees listed on the “no match” letter similarly without regard to the employee’s national origin, race or citizenship status.
- Employee Admits to False SSN: If, upon inquiry, the employee admits that he or she is unauthorized to work in the United States, the employer must immediately terminate the employee’s employment.
- Employee Verifies That the Information Given is Correct: If an employee verifies that the employer has the correct name and SSN, ask the employee if he or she can provide any other reason for the “no match” letter. If no explanation is given, the employer may report back to the SSA that the company has re-verified that the information submitted to the SSA is correct and that neither the employer nor the employee can explain the discrepancy. Ask the SSA to contact the company if any additional employer action is required.
- Employee Verifies That the Information Given is Correct But Employer Learns Additional Information: If during investigation, the employer learns additional information which gives the employer actual or constructive knowledge that the employee is unauthorized to work in the United States, the employer must terminate the employee’s employment. Additional information may come in the form of tips from co-workers, an employee admission, job abandonment, etc. If, after further investigation, and under the totality of the circumstances, the employer has actual or constructive knowledge of an unauthorized worker, the employer must terminate the employee’s employment. Please note that absent other evidence, a co-worker tip in and of itself is an insufficient basis for termination, or even re-verification of an I-9. Because the determination of whether actual or constructive knowledge exists is highly fact-specific, employers should contact legal counsel before taking any adverse action against an employee.
- Reporting Back to the SSA: It is not required to report back to the SSA after receiving a “no match” letter. An employer may, at its option, do so and state one or more of the following with regard to each employee: (1) he/she is no longer employed by the company as a result of job abandonment, voluntarily resignation or involuntary termination unrelated to the “no match” letter; (2) it appears there was an error in the company’s reporting and the correct name and SSN or; (3) the company has verified that it reported the correct name and SSN to the SSA and the employee and the company are unable to explain the discrepancy.
- Liability to IRS: Although the employer has no obligation under the Social Security Act to respond to SSA or to take an action and the SSA has no enforcement authority to act against an employer who fails to respond, the IRS can penalize an employer for failing to report accurate information.
- Liability to ICE: The SSA is required by law to provide the IRS with information regarding mismatches but it does not routinely share “mismatch” information with other agencies, such as ICE. It does provide information to ICE, however, regarding earnings reported on social security numbers assigned for non work purposes and other specific information relevant to ICE investigations.