Return of the No-Match Letters
Although perhaps not as anxiety-filled as the Return of the Jedi, the return of the "No-Match Letters" has employers on edge. Early this Spring, the Social Security Administration ("SSA") resumed distribution of Employer Correction Request Notices—also referred to as Social Security "No-Match Letters"— to employers around the country. Since March, the SSA has delivered more than 575,000 of these letters, which alert employers to discrepancies found between the SSA’s records and the name and Social Security Number ("SSN") combinations submitted by employers on their wage and tax statements (Forms W-2). The resurgence of No-Match Letters has resurrected questions of what the receipt of a No-Match Letter means and how employers should properly respond to the same. In this regard, there are some things that every employer should know.
At the outset, it is important for employers to recognize that the SSA is not a law enforcement agency. Accordingly, it does not have the authority to impose fines or pursue any other civil or criminal penalties against an employer. Furthermore, pursuant to §6103 of the Internal Revenue Code, the SSA is not permitted to share any information reported to it with any other governmental agency, with the exception of the Internal Revenue Service ("IRS"). As such, the receipt of a No-Match Letter, without more, will not put an employer in legal jeopardy.
In addition, employers should understand that the simple receipt of a No-Match Letter does not mean that a particular employee is undocumented or otherwise ineligible to work in the United States. The SSA has in fact cautioned employers that No-Match Letters are intended to be "educational" in nature1 and that the receipt of a No-Matter Letter means only that the SSA was incapable of matching a given employee to the SSN on file. Such a "no-match" could have been caused by a simple clerical error, such as the misspelling of an employee’s name, a name change not reflected on a Form W-2, or the transposition of two numbers in an employee’s SSN. Accordingly, employers are advised to conduct a close review of their records upon receipt of a No-Match Letter. If a clerical error is discovered, the employer should rectify the error on a Form W2-C within 60 days of the No-Match Letter’s receipt. If a clerical error is not discovered, care should be taken before any response is made.
Perhaps the primary concern is how an employer’s response to receipt of a No-Match Letter will be viewed in the event of a subsequent Form I-9 audit by the Department of Homeland Security’s agency of Immigration and Customs Enforcement ("ICE"). Specifically, a concern is that the receipt of a No-Match Letter and an inadequate response to the same will lay the groundwork for ICE to allege that an employer had at least "constructive knowledge" of the unauthorized status of one or more of the employer’s workers. For this reason, if an employer is unable to resolve the no-match issue after a close review of its records, the employer should notify each of the affected employees, encouraging each of them to reach out to the SSA in order to clear up the matter. If at any point in the No-Match Letter response process an employee indicates that new immigration or employment-authorization documents have come into existence which might account for the no-match or mismatch, and such a response is otherwise consistent with the employer’s underlying practices, corresponding updates should be sent to the SSA and a new Form I-9 should be completed with the employee and retained with the original documentation. Employers should be thoughtful with respect to the response process not only to ensure that the company is adequately protected in the event of a Form I-9 audit, but also to ensure that the company does not become the target of a complaint of discrimination for inappropriately terminating the employment of individuals who are identified as having non-matching records.
In resolving no-match issues, employers should develop policies and procedures for responding promptly and uniformly to Social Security No-Match Letters taking into account the considerations of multiple federal agencies (e.g., the SSA, ICE, IRS, etc.). For questions regarding No-Match Letters or for help with any other employment or immigration related concerns, please feel free to contact a member of Koley Jessen’s Employment, Labor and Benefits or Immigration practice groups.
1Letter from Nancy A. Berryhill, Acting Commissioner of the Social Security Administration, in response to Representative Jim Costa’s April 11, 2019 letter. Linked here.