Immigration Law Advisory Bulletin
New
Rules for Responding to “No-Match Letters” from Social
Security Administration
By
Minh Phung
Ngo and Richard
M. Rawson
[August 2007]
On Sept. 14, 2007, a new rule from the Department of Homeland
Security (DHS) takes effect that will significantly change the way
employers must respond to no-match letters from the Social Security
Administration (SSA) or notices from DHS concerning discrepancies
on I-9 employment verification forms. Entitled “Safe-Harbor
Procedures for Employers Who Receive a No-Match Letter,” the
new rule amends existing regulations relating to the unlawful hiring
or continued employment of unauthorized aliens. The rule requires
the employer to take affirmative action to attempt to resolve the
no-match within 30 days, and if the no-match cannot be resolved
within 90 days, the employer must re-verify the alien’s identity
and employment authorization using a modified I-9 process. Below
is a summary of the new rule and a step-by-step guide for employers
to ensure compliance with the new so-called “safe harbor”
procedures.
Constructive Knowledge Redefined
Under the Immigration Reform and Control Act (IRCA), an employer
may be held liable for actual or constructive knowledge
that an employee does not have employment authorization. The final
rule expands liability under the IRCA by adding two additional examples
of constructive knowledge. Under the new rule, employers may be
found to have constructive knowledge if they fail to take reasonable
steps after receiving: 1) a “no-match” letter from SSA,
or 2) notice from DHS (usually after an I-9 audit) that the employee's
employment authorization documents presented in connection with
completion of the I-9 form do not match DHS records.
Responding to No-Match Letter from SSA
Each year the SSA sends thousands of letters to employers across
the country listing the names and social security numbers (SSNs)
of employees whose SSNs do not match their names on the earnings
records of the SSA. The stated purpose of the so-called “no-match”
letter is to properly credit earnings records to the employee’s
SSA account for future benefits. The new rule provides employers
with specific guidelines to follow after receiving a no-match letter
from SSA (the so-called “safe harbor” procedure). If
an employer follows the steps outlined in the safe harbor procedure,
DHS is prohibited from using an employer’s receipt of an SSA
no-match letter as evidence of constructive knowledge of unauthorized
employment. It is important to note that even if an employer
follows the safe harbor procedures, it may still be found liable
based on actual knowledge (i.e. if the employee admits to the employer
that he/she is unauthorized) or constructive knowledge based on
other evidence. The safe harbor procedure involves the following
steps:
Step 1: Employer must check its own records
within 30 days
Following receipt of an SSA no-match letter, the employer must
check its records to determine whether the discrepancy was caused
by a clerical error, such as errors in spelling the employee’s
name or in listing the employee’s SSN. If such an error
occurred, the employer must correct the error with SSA, and verify
that the corrected name and social security number now match SSA's
records. The employer should make a record of the manner, date,
and time of such verification, and then store such record with
the employee’s I-9 form. Employers may verify a SSN with
SSA by calling 1-800-772-6270 or online at www.ssa.gov/employer/ssnv.htm.
The employer may update the I-9 form relating to the employee
or complete a new I-9 form (retaining the original), but should
not perform a new I-9 verification. The above steps must be completed
within 30 days after receipt of
the no-match letter.
Step 2: Employer must ask employee to assist
in resolving no-match within 90 days
If the employer determines that the SSA no-match is not a result
of an error in the employer's records, the employer must promptly
request that the employee confirm that the name and social security
account number in the employer's records are correct. If the employee
states that the information is incorrect, the employer
should correct the error as outlined above. If the employee states
that the employer's record is correct, the employer must promptly
advise the employee of the date of receipt of the no-match letter
and advise the employee to resolve the discrepancy with the SSA
no later than ninety (90) days after
the receipt date. The employer is under no legal obligation to
advise the employee regarding the means or manner of resolving
the discrepancy with the agency.
Step 3: Employer must re-verify employment authorization
within 93 days
If the no-match cannot be resolved with SSA within 90 days of
receipt of the no-match letter, the employer must attempt to re-verify
the worker's employment eligibility by completing a new I-9 employment
verification form. Companies should use the same procedures as
when completing an I-9 form at the time of hire, with a few exceptions:
- The employee must complete section one and the employer must
complete section two of the new I-9 form within 93 days of receipt
of the no-match letter.
- The employer cannot accept a social security number that is
the subject of an SSA no-match letter or any other document
referenced in a DHS notice of I-9 discrepancy to establish employment
authorization or identity.
- The employee must present a document that contains a photograph
in order to establish identity or both identity and employment
authorization.
- The new I-9 form should be retained with the original I-9
form.
Step 4: Consult with counsel about possible termination
of employee after 93 days
If the employer cannot re-verify the employee's work eligibility
through completion of a new I-9 form, the employer must decide
whether to terminate the employee or face the risk in any subsequent
DHS enforcement action of being determined to have constructive
knowledge and being penalized for the continuing employment of
an unauthorized alien. In most circumstances, employers should
terminate the employee to avoid a finding of constructive knowledge
of unauthorized employment. However, we recommend that you always
consult with legal counsel before terminating the employee to
ensure that such action is in compliance with the final rule and
applicable employment laws. There may be special cases where you
have strong evidence that the employee is authorized to work in
spite of the no-match and inability to re-verify identity and
employment authorization. An employer should not terminate an
employee until the process is completed, unless the employer obtains
actual knowledge (such as through an admission by the employee)
that the employee is not eligible for employment in the United
States.
Responding to Notice of I-9 Discrepancy from
DHS
The safe harbor procedures for responding to a notice of I-9 discrepancy
from DHS are somewhat different than those listed above for the
SSA no-match letter. The employer must contact the local DHS office
in accordance with instructions in the written notice and attempt
to resolve the question raised by DHS about the immigration status
document or employment authorization document. The instructions
in the DHS notice may provide less than 30 days for the employer
to respond. If the employer is unable to resolve the discrepancy
with DHS within 90 days of receiving the written notice, the employer
must re-verify the employee’s employment authorization within
the following three days as outlined above.
Common Questions
Does mere receipt of an SSA no-match letter open
up potential liability?
Not initially. Keep in mind that potential liability only arises
when an employer “fails to take reasonable steps after receiving
information indicating that the employee may be an alien who is
not employment authorized.” DHS acknowledges that there will
be situations where mere receipt of a no-match letter does not indicate
that the employee may be an individual who is not employment authorized.
However, because such a determination would depend on a number of
factors, we recommend that the safe harbor provision be followed
in response to receipt of every SSA no-match letter.
Is the safe harbor procedure a requirement?
The safe harbor procedure is not a requirement but we highly recommend
that all employers follow it. There may be other procedures that
would be considered “reasonable steps” of responding
to these notices. DHS will base a finding of constructive knowledge
on a number of factors, including whether the employer made a good-faith
but ultimately unsuccessful attempt to comply with the safe-harbor
procedure. When the employer is unable to meet the strict timelines,
DHS will take into consideration extenuating factors, such as the
unavailability of an employee who is a seasonal worker, or who is
on vacation or sabbatical. In such a situation, an employer should
respond as rapidly as practicable and keep a file documenting such
efforts.
What if employee requests more time to resolve
the discrepancy with SSA?
Unless the employee provides an exceptionally good reason, the
company should not provide him/her with additional time. The rule
implies that an employee should be able to resolve the discrepancy
within 90 days of being notified of the letter. An employer that
provides an employee any more than 90 days could be found to have
failed to take reasonable steps and consequently deemed to have
constructive knowledge of unauthorized employment.
What if the employee is no longer employed with
the company?
You have no obligation under the final rule to act upon the no-match
letter if the employee is no longer employed with the company. However,
you should still try to contact him or her to correct the W-2 records.
In any case, you should document your records with the information
you relied upon in completing the W-2 and the efforts you made to
contact former employees. You should keep such documentation for
three years since the employer is no longer employing the alien.
What if the no-match letter is sent to the employee
and not the employer?
The final rule applies only to no-match letters received by the
employer from SSA. However, once the employer becomes aware of the
existence of the letter, we recommend that it follow the safe harbor
procedure as soon as practicable.
How should I respond to no-match letters received
prior to Sept 14, 2007?
Employers should follow the instructions contained in the no-match
letter, which are steps 1 and 2, as outlined above (checking the
employer’s records and advising the employee to resolve the
no-match directly with SSA). Employers, however, should consult
with legal counsel prior to taking steps 3 and 4, as the regulations
are unclear as to what affect it has, if any, on old no-match letters.
Re-verification and termination of an employee based on a pre-September
14 no-match letter may leave the employer liable for wrongful termination.
Practical Tips on Reducing the Number of Future
SSN Mismatches
Some employers have a large number of employees with SSN mismatches.
The new rule could result in a forced termination of all such employees
93 days after receipt of the SSA no-match letter. To avoid a sudden
loss of a large number of employees, employers should consider efforts
to reduce the number of SSN mismatches it receives each year.
- You may wish to participate in the Employment Eligibility Verification
Program (also known as “E-Verify” or the “Basic
Pilot” program), which is an Internet-based system run by
U.S. Citizenship and Immigration Services (USCIS) in partnership
with SSA. The E-Verify program is free to employers and is now
available in all 50 states. This program provides an automated
link to federal databases to help employers determine work eligibility
of new hires and the validity of their SSNs. For more information
on this voluntary program, see the DHS website at www.dhs.gov/e-verify
or USCIS web site www.uscis.gov.
- Before you file your next annual wage report for the most recent
tax year, you should use SSA’s Social Security Number Verification
Service (SSNVS) prior to submitting Forms W-2. This is a free
and convenient way to verify that your records match SSA records.
However, SSNVS is not to be used to screen job applicants, because
a mismatch makes no statement about a job applicant’s immigration
status. The SSNVS can be found at: www.ssa.gov/employer/ssnv.htm.
- You should ask your employees to check their Forms W-2 against
their social security cards and to inform you of any name or SSN
differences on the two. If the Form W-2 is incorrect, you should
correct your records and prepare Forms W-2c and W-3c per above.
If the social security card is incorrect, you should advise the
employee to request a corrected card from the nearest SSA office.
- You should remind employees near the end of each year to report
to SSA name changes due to marriage, divorce or other reasons.
This is done by the employee using Form SS-5 along with documentation
of the name change. If an employee’s name has changed, you
should continue to use the old name as it appears on the employee’s
social security card until the employee has obtained an updated
card with the new name. Using a new name on Form W-2 before the
employee has obtained an updated social security card will result
in a mismatch.
- When you hire a new employee, in addition to going through the
regular I-9 process, you should ask the employee to check his
or her social security card and inform you of the name and SSN
exactly as shown on the card. The employee is required to furnish
the SSN to you, but the employee is not required to show the social
security card.
- If the employee submits the social security card during the
I-9 process, make a copy so you have a record of exactly how the
name and number appear on the card.
- When entering the name on Form W-2, enter it exactly as it appears
on the social security card. However, do not use Jr. or Sr. even
if it appears on the card. Compound names may be connected by
a hyphen or space (do not join them into a single word). For example,
John R. Smith-Jones may be entered “Smith Jones” in
the last name field. It is especially important to know the exact
last name. If an employee provides a name with a compound or multiple
last names, question them to determine which name is the beginning
of the surname and which (if any) is the middle name. If the social
security card contains a middle name, always complete the Form
W-2 using just the middle initial.
- If you hire someone who does not have a social security number
(SSN), ask him or her to obtain one as soon as possible. If you
still don’t have an SSN when your W-2 report is due, complete
the account number field by entering “applied for”
in Box “d” of a paper form and all zeroes in locations
3-11 of the RW record when filing electronically or on magnetic
media. If a job applicant or an employee has lost his or her social
security card, encourage him or her to go to the nearest SSA to
obtain a replacement.
- You should ensure that all SSNs you report are valid. Here are
some tips:
- A valid SSN has 9 digits. The first three digits should
never be 000, the middle two digits should never be 00, and
the last four digits should never be 0000.
- The first three digits should never be in the 800 or 900
series.
- If the social security card appears on its face to be genuine,
you should not question it. You are not expected to be an
expert on document fraud. Not all social security cards look
exactly alike. There are many slight variations that have
been issued over the years.
If you have questions
or would like more information, please contact any member of DWT's
immigration practice team, including:
This advisory is a publication of the Employer Services Department of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent developments in employment law. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may be given only in response to inquiries regarding particular situations. Attorney Advertising. Prior results do not guarantee a similar outcome.
Copyright © 2007, Davis Wright Tremaine LLP.
return to Advisory Bulletins main page |
