Employers must understand what they can and cannot do now that the Social Security Administration (SSA) is once again issuing Social Security “no-match” letters. Employers are more likely to receive such notices than at any time in history. Employers should prepare now and audit their own I-9 records. Don’t wait until Immigration Customs and Enforcement (ICE) comes knocking.
The SSA recently began again issuing Employer Correction Request Notices (“Educational Correspondence” or “EDCOR”), more commonly referred to as Social Security “no-match” or “mismatch” letters. Since 1993, the SSA has issued EDCOR letters to notify employers with a large number of discrepancies between the Social Security Numbers (SSN) reported on their Form W-2s and the SSA’s own records. Following controversy and litigation over the Department of Homeland Security’s (DHS) proposed use of EDCOR letters as evidence in I-9 and workplace enforcement efforts, the SSA discontinued the use of EDCOR letters in 2012. The new letters resemble the EDCOR letters of the past but also differ from them in a number of significant ways.
First, EDCOR letters are now being sent to a much larger group of employers. In the past, the SSA only sent EDCOR letters to employers if 10% or more of their reported SSNs did not match official records. Today, the SSA is now issuing letters to any employer that has one or more mismatched SSN, resulting in a significant increase in the number of letters issued. According to the SSA, by April 26, 2019, it had already mailed out 577,349 letters for 2018 mismatches. The chance of any employer receiving an EDCOR letter has never been greater. Any employer that receives an EDCOR letter should treat it seriously and carry out any response in a careful, consistent, deliberate, and timely way while documenting their response.
Second, previous EDCOR letters included the names and SSNs of the employees with mismatched numbers along with instructions. The new EDCOR letters do not include the names or SSNs of the relevant employees because of a 2017 change in privacy laws that protect this information. Instead, the new letters only provide the number of reported mismatches and direct employers to visit the website of the SSA Business Services Online (BSO) to view the list of employees with mismatched numbers. In order to do so, employers must use the one-time activation code listed on the EDCOR letter to create an employer account and register with the BSO before they can view the complete report and correct any SSN errors. The new EDCOR letters direct employers to take action and attempt to resolve any discrepancy within 60 days of receipt of the letter. It is recommended that employers create an account, log in to the BSO system, and review the no-match report in a timely manner and document their efforts to resolve any discrepancy per the letter’s instructions and as outlined in greater detail below.
Third, the new EDCOR letters recommend that employers enroll in and take advantage of the Social Security Number Verification Service (SSNVS). The SSNVS is an optional and free online service that allows employers to verify employees’ names and SSNs with the SSA prior to filing annual W-2 forms. The SSNVS only verifies that the name and SSN provided by the employer match what the SSA has on record. It can be helpful to prevent future SSN no-matches but is not very useful beyond that. The SSNVS does not verify an employee’s immigration status or work authorization and should not be confused with the DHS’s E- Verify system. E-Verify is totally independent of the SSNVS and is the only lawful and official means of verifying a new hire’s identity and work authorization. Participation in E-Verify can significantly reduce SSN no-matches at the time of hire as well as reduce the number of new hires presenting fake documents. The system is not perfect and there are both pros and cons to voluntary enrollment in the E-Verify system. Consult with an experienced employment/immigration attorney before signing up.
Practical Advice for Responding to EDCOR Letters
According to the SSA, EDCOR letters are meant to “educate” employers about inaccurate earning records and to ensure that employees receive the benefits they have earned. There continues to be no legal requirement that employers take action in response to EDCOR letters and the SSA does not penalize employers who receive EDCOR letters but fail to follow up on them in a timely manner. However, in the past the SSA had no way of knowing whether employers received the no-match letter in the mail, let alone took action in a timely manner. Today the SSA can see and document in real time whether the employer took the initial step of registering with the BSO to view the no-match report.
It is too soon yet to tell, as the new system and procedure have only been in place a short time, but it is safe to assume that if DHS later conducts an audit of an employer’s I-9 records, it will ask if the employer has received an EDCOR letter. If so, it will likely then ask for evidence that the employer registered with the BSO, reviewed the no-match report, and attempted to resolve any discrepancies within the 60 day period referred to in the letter. While failure to register with the BSO and view the report in a timely manner should not directly result in penalties, it is expected that ICE will continue to consider whether an employer took appropriate steps in a timely manner in response to an EDCOR letter as an either aggravating or mitigating factor when assessing penalties (if any) during an I-9 audit. Therefore, the recommended best practice continues to be that employers take the action outlined in any EDCOR letter and do so in a timely manner as described below:
- Understand that there are a wide variety of reasons why SSA may identify a mismatch that are unrelated to a person’s immigration status (e.g., change in name following a marriage or divorce, simple typographic mistake, the employee has more than one last name and/or lists their last name in different order on different documents). Importantly, do not take adverse action (e.g., lay off, suspend, fire, etc.) against any employee based solely on an EDCOR letter, even if they are not able to resolve the discrepancy. Treat all employees consistently and in the same manner, regardless of their race, ethnicity, country of origin, immigration status, or native language. As the EDCOR letter clearly and repeatedly states, the SSA is only notifying employers about a SSN discrepancy, and the letter does not address or reflect the employee’s immigration status or work authorization in any way. Over-compliance, including asking an employee to present new or different evidence of work authorization, can violate federal law and lead to legal action by the U.S. Department of Justice’s Office of Special Counsel.
- As soon as possible after receipt of the EDCOR letter, visit the BSO website, register, and create an employer account.
- Review the SSN no-match report, which should list the complete names and SSNs for all employees with mismatched numbers.
- Compare the information on the report with the name and SSN listed on each employee’s Form W-2.
- If you find a discrepancy between the W-2 and the online report, file a Form W-2C online to correct the error. Do so within the 60 days allotted. SSN no-matches commonly occur because of incorrect data entry.
- If there is no discrepancy between the W-2 and the no-match report, follow up with the employee and attempt to correct the mismatch. Ask the employee to check his or her Social Security card and compare it with the information in the BSO report and the company’s personnel records. Note: interact with each employee on the BSO report individually and not as a group. As always, maintain privacy of protected data such as other employees’ SSNs.
- If there is a discrepancy between the report and the employee’s Social Security card, resubmit the corrected data online via Form W-2C.
- If there is no discrepancy between the report, the employer’s W-2 and the employee’s Social Security card, direct the employee to contact their local SSA office to resolve the issue. Ask them to contact you if there are any changes and resubmit the corrected information online.
- If the employee is not able to resolve the mismatch with the SSA or otherwise able to provide you with a verifiable SSN, continue to follow up with them every 30 days and document your efforts. Even if the discrepancy is never resolved, do not take adverse action based upon the SSN mismatch alone.
- Do not re-verify the employee’s work authorization, ask for new or additional I-9 documentation, or ask the employee about their immigration status or employment authorization based on the EDCOR letter alone. However, if during the process the employee voluntarily discloses that they don’t have lawful immigration status or work authorization, the employer should follow the same recommended steps for whenever an employer gains actual or “constructive” knowledge that a current employee does not possess valid work authorization:
- Consult with experienced employment/immigration counsel regarding I-9 requirements.
- Inform the employee that the company may not legally hire or continue to employ anyone whom it “knows or has reason to know” is not authorized to work in the United States.
- If the employee has voluntarily disclosed they are not authorized to work in the United States, the company has actual knowledge they are not work authorized and it may not continue to employ them.
- Review the employee’s Form I-9 to ensure it was prepared correctly and completely.
- If lawful and appropriate, ask the employee if they have current, valid evidence of work authorization other than the documentation previously provided during the I-9 process at the time of hire.
- If the employee is not able to provide evidence that satisfies the current I-9 requirements, their employment may be terminated.
Again, note that an employer is not normally allowed to re-verify work authorization or ask for different/additional documentation other than what was originally provided on the I-9. This is appropriate only if the employer has gained actual or constructive knowledge that an employee is not work authorized. Neither the EDCOR letter alone nor the employee’s failure to resolve a SSN no-match alone creates actual or constructive knowledge that an employee lacks legal immigration status or work authorization.
Finally, with the return of the EDCOR letters and a significant increase in the amount of workplace enforcement activities conducted by DHS, now is a good time for employers to conduct their own self-audits of their I-9 records. Schwabe conducts I-9 reviews and assists clients with DHS audit and workplace enforcement matters.
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