If an employee’s name or Social Security number differs from information in the federal Social Security Administration’s records, the agency sends out a “no-match” letter to notify the employer of the discrepancy. The letter, which can list one or more employees, asks that correct information be submitted within 60 days.
While receiving a no-match letter used to be rare, the SSA recently stepped up its efforts in this area. In 2001, the SSA mailed approximately 110,000 such letters. But in 2002, the number was expected to top 800,000 letters—with approximately one in eight employers hearing from the SSA. Thus, it’s critical to understand what this letter is about and how to respond if you receive one.
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The Purpose of No-Match Letters
Many employers jump to the wrong conclusion that a no-match letter means the government has determined that an employee is an illegal alien. But the SSA doesn’t enforce immigration or tax laws; rather, it updates its database to ensure that employee earnings are properly credited. There are many reasons why an employee’s Social Security information may be incorrect. For example, name changes may have occurred because of marriage or divorce, the SSA may have made clerical errors, or an employee simply may have provided incorrect information.
Should You Respond?
The SSA can’t force you to respond to the letter, but ignoring the letter can carry risks. The IRS could come after you for reporting incorrect information, or the INS could fine you if it turns out that you continued to employ someone who wasn’t authorized to work. On the other hand, if you do respond, don’t single out particular employees on a no-match list for more rigorous scrutiny, because this could open you up to a discrimination complaint.
What to Do
To help prevent problems, here are steps to follow if you receive a no-match letter:
- Give a copy of the letter to all employees listed in the letter and their union representatives.
- Explain in writing to employees named in the letter that the SSA is trying to update its records and that no adverse action will be taken against them because of the letter.
- Suggest that the employees check their own records to determine whether their name or Social Security number has been incorrectly reported.
- Give employees time to investigate and correct errors in their information. The employee may have to contact several government agencies, which can take a while.
- Check the information you submitted to the SSA. Compare the most recently submitted W-2 forms with the information on the W-4 forms the employee filled out when he or she was hired. It’s always possible that clerical errors were made on your end.
- Don’t assume that employees listed in the letter are illegal immigrants and consequently treat them differently from other employees.
- Don’t discipline, fire, suspend or threaten an employee whose name appeared on a no-match letter. Doing so could violate anti-discrimination laws.
- Don’t request actual Social Security cards or work authorization documentation from employees who are listed in the letter. Immigration law strictly limits when you may ask to review an employee’s work authorization or identity documents—and you can’t ask to see such documents on receiving a no-match letter.
- If an employee gives you a new Social Security number, don’t assume that the new (or old) number was false. However, if you do suspect the employee has committed fraud, consult an employment or immigration expert before taking any adverse action against the worker.
- Promptly report to the SSA any errors you or the employee uncover.