News Release from Jewell & Associates, PC – February 24, 2011 It is a good idea for employers to revisit and remind themselves of some basic requirements for employee work authorization and employer responsibilities about once a year, to make sure that one is up to date on any new rules and fully remembering old ones. All individuals working in the United States must have legal authorization to do so and earned wages must be reported to the Internal Revenue Service for tax purposes and the Social Security Administration for potential benefit accrual.
In an attempt to eliminate unauthorized employment, the Immigration Reform and Control Act (IRCA) became U.S. law in 1986, and imposed penalties on employers for knowingly hiring or continuing to employ individuals who are not authorized to work in the United States. IRCA established the I-9 requirement, requiring an employer to examine documents presented by an employee upon hire to verify his identity and eligibility to work in the US, and requiring both the employer and employee to complete and sign an attestation portion of the form. The I-9 requirement extends to all employees, regardless of citizenship. I-9s must be retained for 3 years from the date of hire or one year from date of employment separation (whichever period is longer) and can be audited by various government agencies including the Department of Labor, Department of Justice, and Department of Homeland Security. The current version of the I-9 form may be found at http://www.uscis.gov/i-9.
Social Security Numbers
In addition to having valid work authorization for U.S. employment, an individual must have a valid social security number, specifically assigned to him by the Social Security Administration. If, upon reviewing the annual W-2 form for an employee, the SSA cannot match an individual’s name and social security number, the individual’s earnings cannot be attributed to their personal record. To try to cure this issue, the SSA sends out “No-Match” letters, notifying the employer and employee of the discrepancy. Employers will receive No-Match letters if there were more than 10 no-matches that represented more than 0.5% of the employer’s W-2s submitted that year. http://www.ssa.gov/legislation/nomatch2.htm
In 2007, a regulation was proposed by the Department of Homeland Security which would have caused the receipt of a No-Match letter by an employer to result in the employer having constructive knowledge that an employee was unauthorized to work. Since No-Match letters can often be a result of typos, unreported name changes due to marriage, unclear hyphenated or multiple surnames, or other non-work authorization-related issues, this proposed rule was problematic. However, it was quickly enjoined by a District Court in California and was ultimately withdrawn on November 6, 2009.
Though receiving a No-Match letter does not endow the employer with constructive knowledge of unauthorized employment and may have no bearing on the employee’s true employment authorization, “reasonable steps” must still be taken to resolve the discrepancies indicated in No-Match letters.
Upon receipt of a No-Match letter, employers should:
- Double-check the reported no-match information against payroll and personnel records
- Inform the employee of the no-match notice and ask him to confirm his name and social security number as reflected in the personnel records
- Advise the employee to contact the SSA to correct and/or update his social security records
- Periodically check in with the employee regarding the status of his efforts to resolve the no-match issue
- Submit any employer or employee corrections to the SSA
An employer cannot use the receipt of the No-Match notice alone as a basis to terminate, suspend, or take other adverse action against the employee. The employer also cannot require the employee to complete a new I-9 form or produce specific documents merely to address the No-Match letter. The employer must follow the same procedure for all employees identified by No-Match letters.
Though there are no specific regulations at this time penalizing an employer for not curing a No-Match letter issued by the SSA, there may be in the future. And there are penalties for No-Match letters issued by the IRS, if not cured, and/or if non-compliance with No-Match letters is found during a DHS or ICE audit. It is therefore in an employer’s best interest to minimize the incidence of No-Match letters. The SSA provides various ways for employers to do this, most commonly through their Social Security Number Verification Service (SSNVS) and Telephone Number Employer Verification (TNEV) services. [information on both services may be found at: http://www.socialsecurity.gov/employer/ssnv.htm.] Other options for verifying social security numbers include E-Verify (http://www.uscis.gov/e-verify) and Consent-Based Social Security Number Verification (http://www.socialsecurity.gov/cbsv/).
© Jewell & Associates, PC 2011