Social Security Mismatch Notices to Resume
By Patrick ShenDecember 4, 2018
The Social Security Administration (SSA) recently announced that it will resume issuance of Employer Correction Request notices, commonly known as no-match letters, in spring 2019. These letters notify employers and third-party service providers such as payroll companies of discrepancies between employer submissions and the SSA's own records.
The SSA began sending no-match letters in 1993 to employers who submitted Social Security data that did not match the agency's records. Believing such a discrepancy could be evidence of unauthorized employment, the Bush administration issued a regulation in 2006 that set forth procedures for employers to follow upon receipt of an SSA no-match letter. Employers who followed those procedures were provided a safe harbor from allegations of having "constructive knowledge" of unauthorized employment.
The rule was held up in litigation from 2007 through 2009. The Obama administration rescinded the regulation in 2009 and in 2012 suspended all communication to employers regarding data mismatches. Even without notice from the SSA, however, employers continued to find out about Social Security data discrepancies from a variety of sources, including the Internal Revenue Service, state revenue agencies and employee benefits managers.
Meanwhile, even without a regulation, immigration officials and federal prosecutors still regard an employer's failure to act upon discovering a Social Security discrepancy as evidence of constructive knowledge of unauthorized employment. However, without a regulation, immigration officials have not been able to tell employers how to act, leaving employers to their own devices when addressing a mismatch but without any assurance of a safe harbor, even as they act with due diligence. Moreover, government auditors routinely ask employers about SSA records discrepancies during employment eligibility verification (Form I-9) audits, underscoring the significance of the no-match letters, especially considering the Trump administration's announcement that it is increasing the previous administration's enforcement level by 400 percent to 500 percent.
Further compounding employers' dilemma, the Immigrant and Employee Rights Section of Justice Department's Civil Rights Division, along with other governmental agencies, have scrutinized employers for allegedly not affording workers adequate opportunity to resolve the discrepancies and selectively taking adverse employment action based on protected characteristics such as immigration status.
In sum, the SSA's issuance of the no-match letters signals a renewed and heightened effort to hold employers responsible for resolving Social Security records discrepancies. It is critical that employers work with competent legal counsel to develop policies and best practices to address these discrepancies in a proactive and diligent yet neutral and nondiscriminatory fashion.