On April 6, 2011, the Social Security Administration announced the renewal of its no-match letter program.  The program, which notifies either employers or employees or both, of a discrepancy between an employee’s name and Social Security number as reported by the employer (e.g., on W-2 records) and the records maintained by the Social Security Administration, has been in effect since 1979.  The program is intended to ensure that every employee’s earnings are properly credited to their Social Security account — information which is critical to an employee’s eligibility for retirement and disability benefits.  The program was briefly suspended from 2007-2009 due to litigation involving a proposed rule promulgated by the Department of Homeland Security. 

In 2006, the Department of Homeland Security, the agency which includes Immigration and Customs Enforcement (“ICE”), proposed a rule that provided employers with a method to limit the risk that ICE would find they had knowingly employed an unauthorized alien.  Under the rule — which was published on August 15, 2007 amid significant public comment — ICE considered that a “reasonable employer” would take the following steps within 14 days of receiving a Social Security no-match letter:

• Check its records promptly to determine if the discrepancy was due to a typographical, transcribing or similar clerical error.
• If the discrepancy was not due to a clerical error, promptly request that the employee confirm the employer’s records are accurate.
• If the employer’s records are accurate, instruct the employee to pursue the matter with the Social Security Administration.

Finally, the reasonable employer — under the proposed rule — would additionally verify through the Social Security Administration that the Social Security number the employee provided to resolve the discrepancy “is valid for work.”  If the discrepancy could not be resolved within 60 days of receiving a Social Security no-match letter, the employer “must choose between taking action to terminate the employee or facing the risk that DHS may find that the employer had constructive knowledge that the employee was an unauthorized alien.”  The rule was enjoined before going into effect, and was finally rescinded in 2009.

Both the Social Security Administration and the Department of Justice, Civil Rights Division — which houses a unit that investigates Form I-9 related discrimination — have long recognized that a no-match is not evidence of immigration status or work authorization.  A no-match may occur, for example, from a name change after marriage or divorce, misspellings, and inconsistent treatment of hyphenated names.

In April 2011, the Social Security Administration renewed sending no-match letters, individualized to specific employees.  It has discontinued the practice of sending employers letters with a list of numerous employees with Social Security number discrepancies.  Under the renewed program, the no-match letter is sent preferably to the employee — but may be sent to the employer, for example, if the address on file with the Social Security Administration for the employee is invalid. 

Despite the lack of new guidance from ICE on the steps it believes a reasonable employer will take after receiving a no-match letter, employers will want to consider at least the following:

• Ignoring notice of a discrepancy in the employer’s W-2 and tax records has risks.
• Notice of a no-match is not a basis — in and of itself — for taking adverse action against an employee, including suspension or termination.
• A no-match letter is a statement about an employee’s W-2 records, not their immigration status.
• A Social Security number no-match can be the result of numerous scenarios, and may take significant time to rectify.
• The Form I-9 record — used to verify an employee’s identity and work authorization — is called into question if an employee presented a Social Security card as proof of work authorization if that is later the subject of a no-match notice.

We will keep you posted on further developments, which are sure to arise.