Recently, the U.S. Social Security Administration (SSA) resumed issuing Employer Correction Request Notices, also known as “no-match letters” – a practice it had suspended for many years. Immediate action is required in order to properly handle a no-match letter. Inaction may amount to the knowing employment of unauthorized workers, yet overreaction may constitute employment-based discrimination. This article explains what no-match letters mean and what appropriate actions to take in order to avoid potential liabilities for discrimination or the knowing employment of unauthorized workers.
A. No-Match Letter
The no-match letter does not relate to immigration, and will not automatically trigger any immigration enforcement action. The SSA issues no-match letters for the purpose of properly crediting workers’ earnings for social security related benefits. The letter serves as notice to an employer that the SSA received W-2 forms on which the employees’ names did not match the social security numbers in the official database. The letter explains that possible reasons for SSN/name mismatches may include typographical errors, e.g., the name was spelled wrong on the W-4 or a number was transposed in the SSN, name changes that haven’t yet been reported because of marriage, divorce, or other reasons, or inaccurate input of the SSN on the W-2. There may also be other reasons for a mismatch, such as identity theft, domestic violence, and witness protection status. Additionally, no-match may arise due to a simple missing middle initial or hyphen in an employee’s hyphenated last name. The letter asks the employer to log onto the Business Services Online (BSO) web site to find out the names of the employees who have been identified as no-matches. The employer must then provide the SSA with corrections to the Form W-2C within 60 days of receipt of the no-match letter for the purpose of maintaining an accurate earnings record for each employee and ensuring employees get the benefits they are due. The letter does not imply that the employer or the named employee knowingly submitted the wrong name or SSN, or that the employee does not have proper immigration status or work authorization. In fact, the letter unambiguously warns the employer not to take any adverse employment action against the employee - such as laying off, suspending, firing, or discriminating against any individual - just because their SSN or name does not match the official records. Any of those actions, if taken, may violate State or Federal Law against employment related discrimination.
B. Proper Steps to Deal with No-Match Letters
The no-match letter places the employer between a rock and a hard place. On one hand, the mismatch between the employee’s name and social security number may evidence that the employee does not have a valid social security number and is not authorized to work in the U.S. If the employer has knowledge that the employee is not authorized, continuing his unauthorized employment is a violation of the immigration law, which prohibits the knowing employment of unauthorized workers. The penalties for such violation may include civil penalties ranging from $573 to $22,927 per undocumented employee depending on whether it is the first offense or subsequent repeated offense, and even criminal penalties of six months to ten years in jail. To be held liable for the penalties requires proof of knowledge of the employee’s unauthorized status that may be actual knowledge or constructive knowledge. According to the 9th circuit court of appeals, “constructive knowledge is narrowly construed in the immigration context and requires positive information of a worker’s undocumented status.” 1 While the letter by itself does not suffice to prove constructive knowledge, it maybe used as a part of the evidence showing “constructive knowledge” to employ unauthorized workers. The letter, in addition to other evidence such as inaction by the employer, may lead a finding of constructive knowledge of the employee’s undocumented status. On the other hand, if the employer takes an adverse action against an employee solely on the basis of the no-match letter, such action may constitute discrimination based on race or national origin where the letters were issued to employees, predominantly, coming from a particular country or belonging to a particular race and the employer’s adverse employment actions could be viewed as singling those employees out and targeting them. Employment based discrimination violates state and federal anti-discrimination laws, and the employer may be held liable for substantial damages.
To avoid potential liabilities, the employer must take reasonable steps to address the issue raised in the letter. The following steps are generally recommended:
Review employer records and have a discussion with the affected employee. If the employer finds out that the number was reported in error, the employer simply notifies the SSA to correct the error. Otherwise, the employer should schedule a meeting with the employee and advise the employee to contact the SSA for resolving the issue. The employer should let the employee know that refusal to resolve the discrepancy and provide a credible explanation for it could lead to employment termination. It is recommended that the employer document the discussion and follow up with the employee in writing. In the discussion, the employer should refrain from talking about the employee’s immigration status or national origin.
Provide the employee with reasonable period of time. The employee should be given a reasonable period of time to resolve the issue with the SSA. There is no regulation defining what constitutes a reasonable period of time. A period of up to 90 days may be considered reasonable for the SSA to resolve the discrepancy; this period may be extended if the employee demonstrates that he is trying to resolve the issue in good faith. Before the employee is given an opportunity to resolve the discrepancy, he should not be terminated, suspended, or otherwise disciplined. The employee should not be asked to fill out a new I-9, produce I-9 documents, or to provide anything from the SSA. Additionally, all affected employees must be treated in the same manner following the same procedures.
Follow up with the employee. If an employee continues to delay reporting progress towards a resolution or takes an excessive amount of time to resolve the issue, the employer should send reminders to him. The employer must follow up with the affected employee and remind him of the 90-day time frame and document that the employee has been properly reminded during the process.
Respond To SSA. After the employer reviews the no-matches on the BSO website and takes steps to address the no-matches, the employer will be asked to file Form W-2C to inform the SSA of corrections made to employee’s names and social security numbers. The employer must carefully follow the instructions for submitting the form. In addition, it is recommended that the employer send a letter to update the SSA on the status of the remaining identified employees whose discrepancy has not yet been resolved.
Taking reasonable steps as outlined above may help shield the employer against potential ICE enforcement actions and employee discrimination lawsuits. Ignoring the no-match letter and taking no action, plus the receipt of the letter, may be considered as sufficient evidence to establish constructive knowledge for knowing employment of unauthorized workers and thus subject the employer to substantial monetary fines or even lengthy jail time.
This Article is for informational purposes only and may not be used in the place of legal advice. If you receive a no-match letter and have questions on how to properly handle it, please contact our office.
1 Aramark Facility Servs v. Service Employees Int’l, 530 F.3d 817, [9 th Cir. 2008], providing that the no-match letter alone by itself does not provide “positive information” about the employee’s immigration status, and thus does not suffice to establish constructive knowledge of the employee’s undocumented status. To determine whether the employer has constructive knowledge, the court will examine the totality of the circumstance and whether the employer took reasonable steps after it received the no-match letter.