As of March 2019, the Social Security Administration (SSA) resumed sending “no-match” letters to employers. The “no-match” letters are sent when an employer has submitted incomplete information or when an employee’s name and social security number, as reported on wage reporting and tax statements, do not match SSA records. Employers who receive “no-match” letters should carefully read and follow the guidance provided by the SSA.
Responding to SSA “no-match” letters can be complex due to its intersection with IRS reporting requirements and I-9 employment eligibility verification investigations. Any considerations or actions taken beyond what is provided by SSA in its guidance should be carefully considered with guidance provided by legal counsel.
Do Not Jump to Conclusions
There could be many reasons why an employee’s social security information may not match up with SSA data. An employer should not presume that the employee is unauthorized to work in the US or provided false information. The “no-match” may be due to:
- A typographical or clerical error made on Form W-2 or Form W-4;
- The worker’s name changing due to marriage, divorce or something else;
- Information provided on either Form W-2 or Form W-4 being incomplete or incorrect; or,
- Inaccurate or incomplete employer records.
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.
Social Security Administration’s Guidance
In the recent, updated "no-match" letter, the SSA provides specific guidance and resources to employers as to how they should follow up. This includes providing a link to an SSA portal with extensive resources for employers including an outline of the steps employers should take upon receipt of the “no-match” letter. The steps are:
- Register with Business Services Online (BSO) within 60 days of receiving the letter to the Employer Report Status to obtain the name(s) of employees for whom it does not have matching records or social security number (SSN) errors.
- Work with employees to resolve the error.* The SSA has provided employers with a sample letter to use to communicate to employees about the mismatched data. If an employee verifies that the employer has the correct name and SSN, the employer should ask the employee to provide any other reason for the “no-match” letter. If no explanation is given, the employer should document in its file 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. *Employer should contact legal counsel for guidance before reaching out to employees, as our guidance is fact specific.
- If an employer finds an error in the data reported to the SSA, then it should log back on to BSO and make corrections.
- If employees in the “no-match” letter are no longer employed, employers should just note that in their records and no further response to the SSA is required.
Whether an employer determines that its records are accurate or it takes some sort of action, the SSA does not provide further guidance as to what it should do to inform the SSA when they do not need to make corrections. It is not required to report back to the SSA after receiving a “no-match” letter. Nonetheless, an employer should document its actions internally in the event of questioning by other federal agencies (such as Immigration & Customs Enforcement (ICE)) in an I-9 audit. The documentation may include any of the following: (1) the employee 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 with the employee that it reported the correct name and SSN to the SSA and is unable to explain the discrepancy.
Employers can at minimum show good faith efforts to resolve the mismatch by following the guidance provided by SSA. Below are some other scenarios which may also arise when following up on the mismatch letters:
- Employee Admits to False SSN: If, upon inquiry, an employee admits to being unauthorized to work in the United States, the employer must immediately terminate the employee.
- Employee Verifies That the Information Given is Correct but Employer Learns Additional Information: If during investigation, an employer learns additional information which amounts to actual or constructive knowledge of unauthorized employment, it must terminate the employee. Additional information may come in the form of tips from co-workers, job abandonment or other suspect activity. If, after further investigation, and under the totality of the circumstances, an employer has actual or constructive knowledge of unauthorized employment, the employer must terminate. Please note that absent other evidence, a co-worker’s tip in and of itself is insufficient grounds for termination, or even re-verification of an I-9. The determination of actual or constructive knowledge is highly fact-specific, so employers should contact legal counsel before taking any adverse action against an employee.
- Liability to IRS: An employer has no obligation under the Social Security Act to take action or respond to the SSA and the SSA has no enforcement authority to act against an employer who fails to respond. The IRS, however, 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 is not clear whether this will change in the future. 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.
- Liability to Immigrant and Employee Rights Section of DOJ: Employers should also be aware the DOJ previously issued the following do’s and don’ts for employers on SSN “no-match” letters:
- Recognize that name/SSN "no-match" instances can be due to simple administrative errors.
- Check the reported "no-match" information against your personnel records.
- Inform the employee of the "no-match" notice.
- Ask employees to confirm their name/SSN reflected in your personnel records.
- Advise employees to contact the SSA to correct and/or update their SSA records.
- Give employees a reasonable period of time to address a reported "no-match" with the local SSA office.
- Follow the same procedures for all employees regardless of citizenship status or national origin.
- Periodically meet with or otherwise contact employees to learn and document the status of their efforts to address and resolve the "no-match."
- Submit any employer or employee corrections to the SSA.
- Assume the "no-match" conveys information regarding the employee’s immigration status or actual work authority.
- Use the receipt of a "no-match" notice alone as a basis to terminate, suspend or take other adverse action against the employee.
- Attempt to immediately re-verify the employee’s employment eligibility by requesting the completion of a new Form I-9 based solely on the "no-match" notice.
- Follow different procedures for different classes of employees based on national origin or citizenship status.
- Require the employee to produce specific documents to address the "no-match."
- Ask the employee to provide a written report of SSA verification.
In conclusion, an employer is caught in the cross-currents when receiving an SSA "no-match" letter, trapped between conflicting policies of two agencies. While ICE may require an employer to take action upon receiving a “no-match” letter, leading to the employee’s termination, the DOJ’s Office for Special Counsel may find that the employer has engaged in discriminatory practices. It is thus incumbent upon an employer in such a situation to consult with experienced immigration counsel to safely navigate these churning waters by designing employer policies that would be consistently applied each time the employer receives a "no-match" letter.