As of 2019, employers are receiving letters from the Social Security Administration entitled “Employer Correction Requests.” These letters, also known as “mismatch” letters, are sent when the names or social security numbers listed on an employer’s W-2 forms do not match the names and social security numbers that the Administration has on file. While these letters are not new, they are experiencing a resurgence in the current administrative climate. The primary purpose for sending the letters is to inform employers that there is a discrepancy in the information provided to the SSA that is preventing retirement and disability contributions from being properly credited to the employee whose contributions are being reported. Unfortunately, these letters can be confusing and intimidating for employers, as they appear to raise questions as to whether the employees with mismatches are authorized to work in the United States and whether the receipt of the letter gives the employer “constructive knowledge” that they are employing an unauthorized worker. It is critical that employers know what actions to take when they receive a mismatch letter and how to address the mismatches properly without exposing themselves to potential anti-discrimination and unauthorized-employment violations.
What Triggers the Social Security Administration (“SSA”) to Issue a Mismatch Letter?
Each year, the SSA conducts a wage reporting process, comparing the information on submitted W-2 forms with those recorded in its internal database. Where there is even one discrepancy, a mismatch letter is sent.
In accordance with the Social Security Number Fraud Prevention Act of 2017 (P.L. 115-59), the “mismatch” letter that the SSA sends is no longer accompanied by a list of the names and social security numbers (“SSNs”) of each employee with a mismatch. Instead, employers see only the total number of mismatches, along with directions for the employer to visit the SSA’s “Business Services Online” (“BSO”) website to view a list of the mismatched employees. In order to view this list, employers must register for an online BSO account and use the BSO to access the mismatch list. SSA’s motivation in requiring employers who receive mismatch letters to use the BSO to access the mismatch list is: first, to provide a list of mismatched employees in a fashion that complies with the Fraud Prevention Act; and second, to encourage employers to create online accounts so that they will be more likely to use the agency’s BSO when filing future W-2 forms, thus enabling employers to detect and correct any mismatches before filing future Forms W-2.
Some employers have expressed concern that the requirement to establish a BSO account in order to view the mismatch list allows the SSA to keep a record of whether the employer has taken the initiative to identify the employees with mismatches or, alternatively, has chosen to do nothing in response to the SSA’s mismatch letter. In response to these concerns, the SSA has stated that it does “not take any action, nor are there any SSA-related consequences for, employers non-compliance with our letters.” In fact, the SSA confirmed that, because employee name and SSN combinations are considered Federal Tax Information under the Internal Revenue Code, the SSA is “prohibited” from sharing mismatch lists with other agencies, presumably including the U.S. Department of Homeland Security and other immigration-enforcement agencies.
How Should Mismatches be Addressed?
The mismatch letter directs the employer to review the name and SSN submitted on the W-2 and provide the SSA with any necessary corrections by filing a Form W-2C within 60 days of receipt of the letter. Despite the assurances that the SSA is not a law enforcement agency and is currently planning to take no action for non-compliance with the mismatch letters, employers should attempt to resolve the SSN discrepancies in order to avoid incurring SSA and IRS fines for incorrectly reporting employee earnings and to ensure that all employees are receiving proper SSA credit for the wages they have earned.
While correcting discrepancies sound easy, employers can quickly become ensnared in potentially troublesome immigration and anti-discrimination issues. Luckily, employers can reduce the risk by following these steps:
(NOTE: The employer should keep a written record of the nature and date each action was taken in response to a mismatch letter.)
- Check your internal employment records. Clerical errors do sometimes occur, so the employer should start by comparing the name and SSN provided by the employee’s I-9 or other employment records to the name and SSN on the W-2.
- Exercise discretion to rectify outstanding mismatches. If the employer’s records match the submitted W-2, the employer should promptly provide a generic, uniform letter to each employee informing them of the mismatch notification and stating that the employer has confirmed that the information that was submitted to the SSA matches the employee’s personnel records and explaining that the employer must accurately report the employee’s name and SSN on the Form W-2 in order to ensure that the employee receives proper credit for his or her earnings in regards to social security and disability benefits. The letter should also request that the employee contact the employer if the employer has not properly recorded his or her name and SSN in its personnel records. Finally, the letter should advise that if the information recorded on the employment record matches the employee’s name and number on his or her social security card, the employee should visit the local SSA office to resolve the mismatch reported by the SSA. This opportunity must be consistently extended to all employees with a mismatch.
- Allow the employees with mismatches to report any needed corrections to their name and SSN in the employer’s internal employment records. Employees should then visit Human Resources (or the assigned personnel record-keeper within your organization) to report any changes that need to be made to correct employment records. Additionally, the advice to visit the SSA office should be provided to the employee in writing, and where appropriate, both English and foreign-language versions should be available to employees.
- Ensure that all necessary revisions to the employee’s Form W-2C are submitted to the SSA. Employers should then submit a corrected Form W-2C to the SSA either through the BSO or by mailing a paper form with corrected information.
Quick DO’s and DON’T’s
- Consider working with experienced employment or immigration counsel to create and adopt a standard written policy and process for social security mismatches.
- Document every effort made to address and respond to the mismatch letter in order to show the employer’s good faith in attempting to correct such mismatches in the event of an ICE audit.
- Do not panic or jump to conclusions upon the receipt of a mismatch letter. A mismatch, in the absence of additional information, does not mean that an employee with a mismatch lacks U.S. work authorization or legal immigration status.
- Do not “pick and choose” which employees with a mismatch are asked for clarification regarding their name and SSN. Conduct appropriate follow-up on all mismatches in a reasonable, prompt, prudent, and consistent manner.