Social Security No-Match Letters Are Back
The Social Security Administration (SSA) has once again begun sending Social Security no-match letters to employers. The notice, titled SSA Retirement, Survivors and Disability Insurance Employer Correction Request, notifies the recipient that the employer reported X number of employee names and Social Security Numbers (SSN) on Form W-2 for tax year 2018 of which some fraction of those numbers did not match SSA’s records.
Unlike the no-match letters of the past, this notice does not include a list of names of employees with mismatched SSNs. Rather, the new notice advises employers to proactively retrieve the employees’ names on the Employer Report Status feature of the Business Services Online (BSO). To begin using BSO, you must create a one-time registration process by going to www.socialsecurity.gov/bso/bsowelcome.htm. The letter goes on to say that SSA provides a free Social Security Number Verification Service (SSNVS) through BSO that allows employers to verify employees’ names and SSNs prior to filing your annual W-2 submissions. BSO and SSNVS should not be confused with E-Verify, which is an online immigration employment eligibility verification tool of the U.S. Department of Homeland Security (DHS), the use of which remains voluntary under federal and California law.
The letter asks employers to review the names and SSN information the employer submitted on the Form W-2 and provide SSA with necessary corrections on the Form W2-C within 60 days of receipt of the no-match letter so SSA “can maintain an accurate earnings record for each employee and make your employees get the benefits they are do.”
It is important to understand that receiving the no-match letter does not mean the employer or the employee has done anything wrong. There are many causes for SSA mismatches including typographical errors, failure to inform the SSA of an employee name change, errors within SSA’s database, as well as employees who present false social security numbers or use another person’s social security number when completing hiring paperwork.
Employers should follow past SSA guidance which assures employers that a no-match letter is not a basis, in itself, for employers to take any adverse action against the employee, such as firing or discriminating against the individual. Also, the SSA correctly advises that a no-match letter makes no statement about the employee’s immigration status. Under federal and California law, it is improper to reverify an employee’s Form I-9 or terminate the employee based solely on a no-match letter. However, 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.
Ignoring the no-match letter is not recommended as Immigration and Customs and Services (ICE) routinely reviews how employers address no-match issues. Failure to take the steps outlined in the letter could be a factor in ICE finding the employer knowingly hired unauthorized workers and could subject the employer to fines of up to $10,000 per worker and incident.
What Employers Should Do if They Receive a No-Match Letter
First, it’s important that you not take any adverse action against an employee based on a no-match letter alone.
Next, the employer should register with the SSNVS system to retrieve the list of nonmatching names and SSNs. The employer should then check its records to determine whether the discrepancy results from a typographical or clerical error in the company’s record or in its communication to SSA. If such an error is found, the employer must correct the record, inform SSA by filing a Form W2-C within 60 days of receipt of the no-match letter, and then verify that the corrected record has resolved the discrepancy. The employer should document the manner, date, and time of the verification.
Finally, if there is no clerical error, the employer should then ask the employee to confirm the accuracy of the information against his or her own Social Security card. If the employee states that the company record is incorrect, or the employee maintains that the record is correct, ask the employee to reach out to SSA to resolve the issue.
Employers with concerns about resolving SSN no-match issues should consult with experienced legal counsel.