In March of 2019 the Social Security Administration (SSA) resumed sending “no-match” letters (formally known as Employer Correction Request Notices) to U.S. employers whose 2018 W-2 wage reports contained non-matching combinations of names and Social Security Numbers (SSNs). According to SHRM, about 575,000 such letters have been issued to employers so far this year.
By way of background, a no-match letter is simply a notification from SSA to an employer that a certain number of wage reports prepared by an employer contained name and SSN combinations that do not match SSA records. No-matches can arise from benign reasons, such as typos or hyphenated names. No-match letters were first sent out in 2007 but were discontinued in 2012 as the accompanying regulatory process set forth by the SSA was enjoined by litigation.
A standard no-match letter instructs that corrections to wage reports may be made using the SSA’s Business Services Online within 60 days and stresses that the letter does not address any employee’s work authorization or immigration status, nor does it mean the listed employee intentionally misrepresented their SSN to the government. The letter itself does not list which employees are affected. Instead, the employer must utilize the SSA’s Business Services Online portal to retrieve a list of names. Employers with the advice of employment and/or immigration counsel may then work with identified employees to resolve mis-matches, which may include notifying them of the no-match, issuing corrected W-2s, or giving employees a reasonable time to address errors.
Although the SSA itself is not an enforcement agency and will not take action against an employer who does not correct no-matches, a no-match letter can be an indication of potential compliance issues with other agencies, including Immigrations and Customs Enforcement (ICE), a sub-agency of the Department of Homeland Security responsible for workforce enforcement and the Internal Revenue Service (IRS), which can penalize employers for not reporting correct wage information. Perhaps most importantly, an employer’s response to a no-match could lead to serious civil or, when there is a pattern of violations, criminal penalties if, e.g., during the course of an I-9 audit, ICE finds that the employer employed individuals who were not authorized to work.[1]
There are several reference materials available for employers seeking to understand how to address no-match letters, while at the same time, avoiding violating anti-discrimination provisions of the Immigration and Nationality Act. These resources may include the sample letter provided by the SSA, the Department of Justice fact sheet, or even the safe harbor regulation proposed by ICE of August 15, 2007 (later withdrawn during litigation).
Ultimately, while relatively innocuous in and of itself, a no-match letter from the SSA presents intertwined compliance issues that must be carefully navigated with the advice of counsel.
[1] The employer’s response to a no-match letter may be used to assess whether their employment of individuals unauthorized to work was done “knowingly.” For example, failing to respond at all to a no-match letter might constitute willful blindness of an employee’s unauthorized working status. Similarly, consecutive no-match letters or other documentation of mismatched name and SSN records could lead to a finding of constructive knowledge of an employee’s unauthorized status. In such situations, ICE might levy fines or seek other penalties against the employer.
© Jewell Stewart & Pratt PC 2019