Social Security No-Match Letters are in the Mail

Many employers and payroll service providers are finding unwelcome correspondence in their mailboxes, Social Security “no-match” letters are back. A no-match letter means that the Social Security Administration (SSA) has found one or more employee records submitted by the employer that doesn’t match either the name or social security number that SSA has on file. Examples of these notices can be found on SSA’s website.  During the Obama administration, SSA stopped sending no-match letters altogether, but the Trump administration decided to resume them. Many employers will remember that during the Bush administration these letters were sent frequently and employers had a specific process to follow in order to get “safe harbor” from legal consequences while the issue was sorted out. Unfortunately, the Bush era “safe harbor” rules are no longer in effect and employers will need to navigate some uncertain decisions.  

“Constructive Knowledge”

The problem for employers is that immigration officials and prosecutors consider an employer’s receipt of a no-match letter from SSA as evidence of “constructive knowledge” that an employee may not be authorized to work in the U.S. Essentially, “constructive knowledge” is a legal term indicating that a reasonable person, given the facts and information available to them, should be able to infer that the employee is not authorized to work. U.S. Immigration and Customs Enforcement (ICE) will ask for no-match letters when conducting records audits or other enforcement actions. Employers who knowingly employ individuals who are not authorized to work are in violation of current immigration laws and are in jeopardy for fines and criminal prosecution.

Proceed With Caution

Simply ignoring a no-match letter is not a good option because ICE could consider the employer to have “constructive knowledge” and to be willfully employing an unauthorized person. Furthermore, SSA does share information with ICE so immigration enforcement actions such as an audit could be prompted by no-match letters. However, employers shouldn’t just fire an employee, or take any other adverse employment action, based on receiving a no-match letter. A no-match letter alone is not an indication that an employee is not authorized to work in the U.S. In fact, the n0-match letter says it “does not address your employee’s work authorization or immigration status.” There could be a simple explanation for a mismatch such as a number getting transposed on a document or the person’s name changed, such as through marriage, but they failed to notify SSA. If an employer takes adverse action against an employee, such as firing, simply based on a no-match letter, then they could be sued for discrimination. The no-match letter states: “You should not use this letter to take any adverse action against an employee, such as laying off, suspending, firing, or discriminating against that individual, just because his or her SSN or name does not match our records. Any of those actions could, in fact, violate State or Federal law and subject you to legal consequences.”

Next Steps

Employers who receive a no-match letter will first need to create an account and login to SSA’s Business Services Online. Unlike the letters from years ago, the new letters don’t include the names and social security numbers that are in error, you have to log-in to SSA’s site to even learn which employees are referenced.

After the employer retrieves the list of employees with information that does not match SSA records, check business and personnel records to determine if a typographical error is the source of the discrepancy. If such an error is found, the employer can file a form W2-C to correct the information with SSA. More information about this correction process is contained in SSA’s Business Services Online and it should be completed with 60 days of receiving the no-match letter. Of course, it’s a good practice to verify that the correction took place and to document all employer actions.

If the employer finds no typographical or clerical error, then you will have to involve the employee in resolving the discrepancy. Inform the employee about the no-match letter from SSA and ask the employee to verify the accuracy of the information in your business records with the information found on their social security card. Instruct the employee to follow up directly with the SSA to resolve any discrepancies. Finally, document all of your business actions to show that you took reasonable steps to address and resolve the matter.

For more information, see the following related posts:

• From the Michael Best law firm: https://www.michaelbest.com/Newsroom/205321/Social-Security-No-Match-Letters-Return
• From Western Growers: https://www.wga.com/blog/ssa-distributes-no-match-letters-tax-year-2018

Employers with specific questions about dealing with no-match letters or other employment situations should seek legal counsel.

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By Richard Stup, Cornell University. Permission granted to repost, quote, and reprint with author attribution.
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