Company human resources professionals are being forced to deal with an old dilemma once again. The Social Security Administration (SSA) has resumed sending “no-match” letters to employers notifying them that the Social Security number (SSN) of certain employees (typically as reported on annual W-2 wage reports) do not match the employee’s name in the SSA database. SSA has not sent out no-match letters since 2007, when litigation arose challenging a regulation promulgated by the Department of Homeland Security (DHS) which would have provided employers with a safe harbor from liability so long as they abided by a specific follow-up protocol after receiving a no-match letter. The “safe harbor” regulation was never implemented and the no-match issue had seemingly subsided until recently when employers began receiving SSA notifications once again.
The no-match letter is issued by SSA and advises the employer that the name or SSN reported by the employer for one or more employees does not “match” a name or SSN combination reflected in SSA’s records. Although not verifiable by any statistical means, it is suspected that the most common reason for the discrepancy is that the employee is an unauthorized worker who provided incorrect SSN information at the time of hire. Nonetheless, the no-match letter merely requests that the employer assist SSA by providing corrected information and further cautions employers against taking any adverse employment action against a referenced employee based solely on receipt of the letter. The no-match letter explicitly states that it makes no statement about the referenced employee’s immigration status.
Therein lies the employer dilemma. Employers are clearly asked to follow-up on the discrepancy. In fact, there are compelling reasons why employers should not ignore the letters. For example, among the items commonly requested by U.S. Immigration and Customs Enforcement (ICE) in its Notice of Inspection subpoenas (I-9 audit letters) are copies of no-match letters. Furthermore, the U.S. Attorney’s Office has commonly pointed to the fact that employers ignored no-match letters in the context of criminal immigration investigations and litigation. Yet, DHS guidance for employers indicates that an employer should not assume that an employee referenced in a no-match letter is not work authorized, and should not take adverse action against the employee based on that assumption. Furthermore, as in any adverse action situation, employers risk private litigation by affected employees if their follow-up on a no-match is too aggressive.
Exemplifying the dilemma of the no-match letter is a 2009 California case. In that instance, an employer received a no-match letter and instructed affected employees to provide corrected Social Security information within three days. Indicating the three-day turnaround period was insufficient, an arbitrator awarded back pay and reinstatement to employees who were terminated for failing to timely provide corrected Social Security information.
Thus, employers should develop a well thought out protocol for handling no-match letters. It should begin with checking employer records for simple transcription errors or the like and a follow-up with affected employees. When it becomes available, corrected information should be provided to SSA and the Internal Revenue Service (IRS), which might include submitting Form W-2c correcting previous W-2 submissions. Whether a given employee should face adverse consequences, including termination, should be decided upon only after consultation with counsel.