As reported by the American Immigration Lawyers Association (AILA) on April 12, 2011, after a long hiatus, the Social Security Administration (SSA) has once again started sending out "no-match" letters that advise employers that their workers are using a social security number that does not coincide with SSA's records. Effective April 6, 2011, pursuant to a directive from the SSA Commissioner, SSA resumed sending employer decentralized correspondence (DECOR) letters for tax year 2010.
SSA FIELD GUIDANCE
In guidance on how to handle inquiries relating to SSA no-match letters, SSA instructs employers to check their records to determine if their information matches the records submitted and to ask the employee to check their records to ensure that they have accurately reported their name and social security number to the employer. If the employer and the employee are unable to resolve the issue, the employer should instruct the employee to contact a local SSA office and provide the employee with a reasonable amount of time to resolve the discrepancy. According to SSA Frequently Asked Questions (FAQs), "it takes approximately 10 to 14 days to receive [a] replacement social security card."
However, the Program Operations Manual System states, "The employer should give the employee a reasonable amount of time to rectify the situation with us. It may take two months or longer to get a new or replacement Social Security card." Moreover, the now rescinded DHS regulations gave the employer up to 90 days to resolve the discrepancy and, as discussed below, the Office of Special Counsel (OSC) has suggested that 120 days is appropriate.
The field guidance advises that if an employer states that he or she is unable to resolve the mismatch because the employee is unable to provide a social security card, or may no longer work for the employer, the employer should document efforts made to obtain the corrected information and retain the documentation for four years.
While this advice may be adequate for employees no longer employed, one questions whether the mere documentation of the employee's inability to correct its records will satisfy ICE I-9 auditors who now routinely request copies of all SSA no-match letters and related correspondence in its audits.
In the context of erroneous withholdings, a W-2C (Corrected Wage and Tax Statement) along with a W-3C (Transmittal of Corrected Wage and Tax Statements) is normally required to correct a social security number error. In some cases, the 940 annual FUTA return, state income tax and state unemployment returns, and local tax returns may require amending. The Internal Revenue Service (IRS) may impose a fine of $100 per information return for failure to file corrections.
GUIDANCE FROM THE OFFICE OF SPECIAL COUNSEL
With the advice of counsel, employers must establish effective strategies to address employer DECOR letters in a lawful yet non-discriminatory manner. The OSC recently provided general guidelines for employers to follow in developing a response plan to SSA no-match letters. This guidance states that an employer should not terminate a worker based only on the receipt of a no-match letter, nor should it attempt to re-verify work authorization by requesting completion of a new I-9 form. According to OSC, the employer should provide a "reasonable period of time" for the worker to resolve the problem. According to OSC FAQs, "There are no Federal statutes or regulations in effect that define a 'reasonable period of time' in connection with the resolution of a no-match notice.
As a practical matter, a 'reasonable period of time' depends on the totality of the circumstances. Of note, in the E-Verify context, SSA has the ability to put a tentative non-confirmation into continuance for up to 120 days. This recognizes that it can sometimes take that long to resolve a discrepancy in SSA's database."