In a move that is certain to get the attention of I-9 compliance specialists and immigration counsel alike, the Social Security Administration (SSA) quietly resumed the sending of Social Security No-Match letters to employers this month (April 2011).
Over the years, these letters (often referred to as simply “No-Match letters”) have been sent to both employees and employers when the names or social security numbers listed on an employer’s W-2 forms do not match SSA records. While the SSA’s primary purpose in sending these letters is to provide notice of a database discrepancy which can affect future retirement or disability benefits, the letters have long been a source of confusion for employers, particularly as it relates to potential immigration and anti-discrimination issues. Now that these letters have returned, employers must once again grapple with the following questions: what exactly must I do after receiving a no-match letter? Can these letters be used against my organization during an ICE audit if unauthorized workers are discovered? Is there any published guidance on how to respond to these pesky administrative notices without violating workers’ rights? As described below, there are no easy answers to these questions, and it ultimately may depend upon your organization’s unique circumstances. Keeping that in mind, let’s briefly explore the history and future of no-match letters and I-9 compliance efforts.
History of SSA No-Match Letters
As part of the SSA’s annual wage reporting process, the agency attempts to match the names and SSNs on Wage and Tax Statements (Form W-2) that are submitted by employers against SSA’s Numident file, which is the repository for all issued SSNs. In many instances, the name and SSN combination cannot be matched to SSA’s records for a variety of innocent reasons including a misspelled name or SSN with a transposed number; a change in the worker’s name due to marriage or divorce; incomplete information on a W-4 or W-2; or use of compound names which are not perfectly aligned in the government databases. In the worst case scenario, mismatches could also be due to the use of false SSNs or SSNs assigned to other people (identify theft).
To resolve these discrepancies (which become costly for the agency overtime), the SSA has historically sent two types of no-match letters: (1) Decentralized Correspondence (DECOR) letters and (2) Employer Correction Request or Educational Correspondence (EDCOR) letters. DECOR letters have been around since 1979, and the SSA has been sending them to all employees whose W-2 forms do not match the SSA records. If the W-2 form does not contain an employee address or has an invalid address, SSA sends a slightly different version of the DECOR letter to the employer instead.
Employers are probably more familiar with the “Employer Correction Requests” which were often referred to as an “educational correspondence” or “Code V” EDCOR letter. The SSA began sending EDCOR letters in 1994 to notify employers that the Agency was unable to post earnings for some of their workers due to a mismatch. The EDCOR letter also provided instructions on how to correct the discrepancies and requested a response from the employer within 60 days for each SSN listed on the letter.
Immigration Compliance Consequences
This is where the receipt of a no-match letter gets interesting. The wording on the no-match letter has long indicated that it does not make any statement about the employees’ immigration status and further cautions employers from taking adverse action. However, the former Immigration and Naturalization Service (INS) and its successor, ICE, have consistently advised that employers cannot ignore these either letters either, especially if there is some other evidence of unauthorized employment (e.g., a tip from the public). In addition, the INS has warned that failure to follow-up with an employee in certain circumstances could lead to a finding of constructive knowledge of unauthorized employment (e.g., if confronted employee offers no explanation and employer does nothing to reverify).
At the same time, employers have to walk a very fine line with no-match letters to ensure they don’t inadvertently violate the anti-discrimination protections of the law. As we’ve discussed in the past, the anti-discrimination provision of the Immigration and Nationality Act (INA) prohibits unfair documentary practices (known as document abuse), which occurs when employers treat individuals differently on the basis of national origin or citizenship status. Inquiring about no-match letters only for a particular race or demanding reverification based on the letter alone could have negative consequences indeed.
DHS introduces the No-Match Rule (now rescinded)
Many of these uncertainties were addressed in a controversial 2007 DHS rule which would have required employers to engage in a series of steps upon receipt of a no-match letter in exchange for a “safe harbor” from certain immigration liability. The regulation never went into effect due to litigation and was eventually rescinded in 2009. During this time, the SSA discontinued the sending of no-match letters to employers. Despite the demise of the No-Match rule, ICE still considers an employer’s receipt of and failure to address a no-match letter to be possible evidence of the knowing employment of an undocumented worker. For this reason, it’s quite common to see a request for all SS No-Matches letter during an ICE I-9 audit.
No Match Letters Return
On April 6, 2011, the SSA Commissioner issued a directive to resume sending the employer DECOR letters (featuring one employee per letter) for tax year 2010 and permanently discontinue the EDCOR letters (multiple employees per letter). As before, the new DECOR letter cautions employers that it is not a basis in of itself for an employer to take any adverse action (laying off, suspending, firing, etc.) and makes no statement about an employee’s immigration status. The letter also excludes the controversial insert from ICE that was introduced in the No-Match Rule. An FAQ on the SSA website also provides the following advice for employers:
Perhaps most importantly (from an I-9 perspective), the FAQ notes the following 2 points:
Lastly, the letter also includes a “Privacy Act” notice which lets you know that the SSA may give this information to the IRS (for tax purposes only) or to the DOJ for violations under the SSA act.
What Other Guidance do we have?
On November 19, 2010, the Office of Special Counsel for Immigration-related Unfair Employment Practices (OSC) published revised guidance regarding how employers can respond to no-match letters. In particular, the guidance emphasizes that, on its own, the receipt of an SSA no-match letter is not a sufficient basis to terminate, suspend or take any other adverse action against an employee. Instead, upon receipt of a no-match letter, employers should periodically meet with employees and work to resolve the no-match, allowing “a reasonable period of time” for such resolution. The OSC notes that as a practical matter, a “reasonable period of time” depends on the totality of the circumstances. For example, in the E-Verify context, OSC notes that SSA has the ability to put a tentative nonconfirmation into continuance for up to 120 days while the mismatch is being resolved.
Like it or not, no-match letters are back. And with them, comes the continuing uncertainty of how employers should handle this potential can of worms. Do you strictly follow the SSA guidance and treat this as an earnings issue only? Or rely primarily on the OSC guidance to avoid possible issues of discrimination? And what about ICE? What is their opinion on the necessary steps? Inevitably, dealing with social security no-match letters is yet another area of I-9 compliance where employers must rely on experienced immigration counsel to help them devise a strategy which makes sense for their organization. By working closely with counsel, you can (a) devise a standard procedure for how to respond to a no-match letter; (b) identify any past no-match letters which should be maintained in the event of an ICE audit; (c) formulate a plan to contact employees impacted by the letters; and (d) remove all fears when you open your next letter from the SSA!
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