Social Security Mismatch Letter Compliance
Many employers, particularly agricultural employers, are once again receiving mismatch letters from the Social Security Administration stating that W-2 forms for various employees contain names and/or Social Security numbers that do not match the Social Security Administration records, or that certain Social Security numbers are invalid. This article outlines the steps employers should take in response to such letters, contains sample forms to use, and includes resources put out by the federal Department of Justice for further information.
Once you receive such a letter, there are a number of steps you should take, as outlined below. In general, however, the first thing to know is that you cannot simply ignore such letters. Rather, you should check to see if the information you submitted on the relevant W-2 matches the information in your records to make sure there are no typos, etc. If there are errors, submit a Form W2-C with the correct information. If the information you submitted matches your records, you need to provide a letter to each relevant employee (hand deliver or mail to current employees and mail to laid off employees who are expected to return), asking them to verify that the information you have is correct. Keep a copy of such letters in your records. Assuming that the name and/or number you have on your records matches the information the employee has (again keeping in mind that there are typos and transpositions occasionally), all that you are legally required to do is to notify the employee to clarify the situation, and allow them a “reasonable” amount of time to do so. If Social Security comes back about the same employee, let them know that you have written to the employee and told him or her to contact Social Security. If need be, you can supply Social Security with a copy of the letter you sent to the employee. Also, if Social Security re-contacts you about an employee to whom you have previously sent the letter, you can send the employee another letter, designated as a “second notice.”
Keep in mind that the mere fact that Social Security has said that there is a mismatch does not mean that you should, or even that you are legally entitled to, take any action against the employee. Employers should not assume that a mismatch conveys any information regarding employee’s immigration status or actual work authority. There are many reasons an employer may receive a “No-Match Notice,” including but not limited to: (1) an unreported name change due to marriage, divorce or naturalization; (2) input errors by Social Security staff; (3) reporting errors by an employer or employee; (4) identity theft; (5) errors in reporting proper hyphenated or multiple surnames; and/or (6) fraud. As long as you have what reasonably appear to be valid identification documents for an I-9 Form, you should rely on those documents as being valid. Taking improper action against an employee would violate federal law and/or state law and would subject you to penalties.
Social Security Administration Mismatch Letter Checklist
Do not ignore the warning letter. This may expose you to penalties, or the IRS may refuse to accept your tax filings.
Do not terminate an employee simply because of this letter. Presumably, you properly filled out an I-9 Form on the employee. Taking adverse action against an employee based solely upon the Administration’s letter could be a violation of federal and/or state law. Proceed according to the steps listed below.
Check to see if the information you submitted on the W-2 matches the information in your records to make sure there are no typos, etc. If there are errors, submit a Form W2-C with the correct information.
If the information you submitted matches your records, write a letter to the Social Security Administration acknowledging receipt of the letter and stating that you are taking appropriate steps to correct any problem. (A draft form letter can be downloaded here.)
Inform the employee, in writing, of the problem with a potential mismatch that it needs to be resolved, and advise the employee to contact the Social Security Administration to correct and/or update his or her records. (A draft form letter can be downloaded here.)
Keep a copy of each letter.
Make sure to give the employee a “reasonable” period of time to address the problem. As of now there is no set time frame for what is a “reasonable” period of time, but it is based on the totality of the circumstances (and is probably at least 120 days).
Review any document that the employee offers which demonstrates resolution of the mismatch.
If the employee says that the Social Security Administration’s information is incorrect, send a letter to the Social Security Administration with the correct information.
If the employee says that your information is incorrect, correct it and send a letter to the Social Security Administration stating that you had incorrect information but have corrected it.
If the employee admits that he or she is not authorized to work in the United States, this is “actual knowledge” and you should contact your labor attorney. You cannot continue to employ somebody who you know is not authorized to work in the US. If the employee tells you that the Social Security Number he or she used does not belong to them, you cannot continue to make Social Security Administration or tax filings knowing that the Social Security Number is incorrect.
If the employee does not provide you with any information by the end of the tax year, send a letter to the employee stating: “On [date], we notified you that the Social Security Administration had advised us of a name and/or Social Security Number mismatch in the agency’s records regarding you. We suggested that you go to the local Social Security Administration office to straighten out the problem. Please let us know if any information in our records needs to be changed.”
If the Social Security Administration sends you another letter on the same employee, send the same letter to the employee again, labeling it a “Second Notice,” and send the Social Security Administration a letter stating that you have previously notified the employee of the problem, and have now re-notified the employee. Attach a copy of the letters.
It is very important that employers follow the same procedures for all employees regardless of citizenship status or national origin.
As mentioned above, the United States Department of Justice has issued a list of “Do’s and Don’ts for Employers dealing with mismatch letters, along with a list Frequently Asked Questions which provide additional information and background.
The law on this topic is subject to change, so please do not hesitate to contact us to address any particular situations you may face. If you have any other questions or comments, please do not hesitate to contact us.The goal of this article is to provide employers with current labor and employment law information. The contents should neither be interpreted as, nor construed as legal advice or opinion. The reader should consult with Barsamian & Moody at (559) 248-2360 for individual responses to questions or concerns regarding any given situation.