HR Management & Compliance

Social Security Administration No-Match Letters Back On Again

The Social Security Administration (SSA) resumed sending “no-match” letters to employers this month, three years after discontinuing the practice in response to litigation.

The SSA posted a notice on its Program Operations Manual System website saying letters are to go to employers for data received for tax year 2010. The SSA won’t send letters it held for tax years 2007 and 2006 because of litigation surrounding a proposed Department of Homeland Security (DHS) regulation, “Safe Harbor Procedures for Employers Who Receive a No-Match Letter,” which was later rescinded.

Employers are required to report wages annually for each employee on Form W-2 (Wage and Tax Statement). During the annual wage reporting process, a wage report may fail validation because it doesn’t have a social security number (SSN) or name or the SSN or name submitted doesn’t match SSA records.

The Social Security Administration points out that a no-match can be a result of a typographical error, an unreported name change, inaccurate or incomplete employer records, or misuse of an SSN. In these cases, the SSA places the earnings information in the Earnings Suspense File and then attempts to resolve the issue, sending letters to employees, employers, and self-employed workers to inform them that a reported name or SSN doesn’t match its records.

The purpose of the no-match letters, referred to by the SSA as decentralized correspondence notices, is to obtain corrected information to help the SSA identify the worker to whom the reported earnings belong so that his earnings can be posted correctly.

Employers became wary of no-match letters in 2007 after the DHS published the “safe harbor” regulation. The DHS maintained that no-match letters often signaled that an employer intentionally employed immigrants not authorized to work in the United States. The safe-harbor procedures required employers to take quick action to fix discrepancies or risk being found in violation of immigration laws.

Learn more about how immigration laws affect employers with the Mastering HR: Immigration report