Social Security No-Match Letters Are Back And Should Not Be Ignored

Constangy, Brooks, Smith & Prophete, LLP
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Constangy, Brooks, Smith & Prophete, LLP

After a break of several years, employers are again receiving “no-match” letters from the Social Security Administration. The purpose of the letters, now formally called Employer Correction Requests, is to inform employers that employee names and Social Security numbers reported to the Internal Revenue Service (on Form W-2 or on the employer’s quarterly tax filing) do not match the records at the Social Security Administration.

Employers who receive these letters should not ignore them. Although the discrepancy could be created by something as insignificant as a typographical error, it could also indicate that the employee has created a false identity.

The new letter can be found on the SSA website. The new letter does not identify affected employees, as the old version did, but instead instructs employers to create an account with SSA’s Business Services Online to identify the employees in question and to correct any errors causing the mismatch within 60 days. If the employer, after reviewing its records, determines that its own error caused the mismatch, the employer should make the correction. If not, the employer must contact the affected employees.

If the employer cannot correct a mismatch, the employer should contact the employee and ask the employee to correct the mismatch.

An employer’s failure to act could be considered by Immigration and Customs Enforcement to be “constructive knowledge” that the employee is not authorized to work. “Constructive knowledge” in this context means having notice of circumstances that would lead a reasonable person to question the legal status of an individual. Under the Immigration Reform and Control Act of 1986, it is unlawful for an employer to hire or to continue to employ an unauthorized worker with either actual or constructive knowledge that the individual is not authorized to work.

Constructive knowledge may also exist when an employer continues to employ an individual who cannot make the correction or provide other documentation of authorization to work that meets I-9 (and, if applicable, E-verify) requirements.

The penalties under the IRCA include fines and, in extreme cases, criminal penalties.

That having been said, employers should apply non-discriminatory rules in responding to no-match letters. The employer’s policies and practices should apply without regard to where the employee was born or the employee’s national origin. As the new letter warns,

IMPORTANT: This letter does not imply that you or your employee intentionally gave the government wrong information about the employee's name or SSN. This letter does not address your employee's work authorization or immigration status.

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.

We will continue to monitor developments in this area and update as needed.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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