In March 2019, the Social Security Administration began sending Employer Correction Request (EDCOR) Notices (commonly known as “no-match” letters) to employers who reported at least one name where the Social Security number on the W-2 wage report for 2018 did not match SSA records. To date, the agency has mailed nearly 600,000 letters to employers nationwide. SSA plans to send the remaining letters for tax year 2018 sometime this fall.
No-match letters are short, seemingly innocuous and often directed at a company’s payroll or tax department. Each letter states a certain number of 2018 W-2 employees who had mismatches and provides instructions on how to resolve the issue.
An employer’s handling of a no-match letter could have adverse consequences should U.S. Immigration and Customs Enforcement initiate an I-9 worksite enforcement audit. The administrative subpoena or Notice of Inspection related to the I-9 audit have long requested employer records concerning receipt of no-match letters, and ICE will likely inquire further about the employer’s efforts to address the no-match. If adequate measures were not taken, the no-match letters can be used as evidence that the employer had constructive knowledge of an employee’s lack of work authorization.
Receipt of a no-match letter does not necessarily mean that an employee is undocumented. In fact, the no-match letter could be generated for relatively minor reasons such as typographical errors, unreported name changes or inaccurate employer records.
Accordingly, the employer should not take any adverse action such as suspending, demoting or terminating an employee solely based on the no-match as such actions could violate federal and state antidiscrimination provisions. Seeking immediately to re-verify the employee’s identity and employment eligibility or requiring the employee to provide only certain types of I-9 documents solely based on receipt of the no-match letter also puts the employer at risk of engaging in discriminatory acts.
Interestingly, the U.S. Department of Justice has advised, in the context of handling no-match letters, that an employer should not require a written report of SSN verification from the SSA, as it may not always be obtainable. Consequently, the employer is left in a precarious situation of ensuring it takes affirmative steps to address the no-match issue while also avoiding actions that could be considered discriminatory.
Upon receiving a no-match letter, the employer should:
- Register for the SSA’s Business Services Online database and select “View Name and Social Security Errors” to download the list of affected employees;
- Confirm the name and SSN number in the company files to ensure any numbers were not transposed incorrectly;
- Communicate with the affected employee and advise him or her of needed follow-up action;
- Provide the employee with a reasonable opportunity to resolve the discrepancy with the local SSA office; and
- Document the follow-up communication with the employee to show good faith effort to comply.
Since we know that the practice of law is not done in a vacuum, the general guidance listed above is only a starting point. Employers should formulate their own communication strategies tailored to their respective businesses and workforces. Engaging seasoned immigration counsel is highly recommended to help employers develop practical talking points, since the roll-out to affected employees is critical to minimizing business disruption.
SSA no-match letters should also remind companies to revisit their I-9 compliance programs. The likelihood that an employer, regardless of size, receiving the dreaded I-9 Notice of Inspection is very high under the Trump administration, as it sees worksite enforcement as a critical way to curb illegal immigration. Specifically, ICE reports that the number of I-9 audits increased a staggering 440% between FY2018 and FY2017, and the numbers are expected to increase again in FY2019.
With civil fines for substantive and technical violations on the Form I-9 ranging from $230 to $2,292 per form, and the government’s findings of knowingly hiring or continuing to employ unauthorized workers resulting in fines from $539 up to $20,130 per worker, it is not hard to see how fines have reached record-setting numbers.
Furthermore, employers can also be subject to criminal penalties, including prison time, should the government find they engaged in a pattern or practice of hiring, recruiting or referring for a fee unauthorized aliens.
These statistics prove that employers should be proactive with their worksite compliance program.
Taking note of the following immigration compliance practices should help ensure a business does not end up being part of the previously mentioned fine statistics or, perhaps worse yet, in criminal trouble should a Notice of Inspection arrive tomorrow.
- Complete employment eligibility verification and maintain a Form I-9 for all workers hired after Nov. 5, 1986.
- Use the most recent version of Form I-9 and fully complete it within three days of hire.
- Store Form I-9 records for current and former employees separately, in case a Notice of Inspection only requests records for current employees. Additionally, Form I-9 records should be kept separate from personnel files.
- Do not specify to workers what documents to present for employment verification eligibility. Workers should be given the option to either select one document from List A on the back of Form I-9, or one document from List B and one document from List C.
- Maintain Form I-9 records up to date, only if needed. Documents used to verify identity (e.g., driver’s license) and certain documents used to verify both identity and work authorization (e.g., U.S. passport and Permanent Resident Card) do not need to be re-checked upon expiration. However, all temporary employment authorizing documents (e.g., Employment Authorization Document) should be re-checked at expiration time.
- Retain Form I-9’s throughout the worker’s employment with the company and for one year from the employment termination date or three years from the date of hire, whichever comes later. After the mandatory record retention period, purge the Form I-9 files. However, even retained outdated records should not be destroyed upon the issuance of a Notice of Inspection.
- Establish consistent compliance procedures and conduct internal compliance audits twice per year and after any major corporate change (e.g., hiring surge, layoff or merger).
Nathaniel Martinez is an associate in the corporate section of the Houston office of Munsch Hardt Kopf & Harr, P.C. His practice emphasis is employment-based and family-based immigration matters. He assists companies of all sizes and areas of specialization with obtaining U.S. visas and work permits for hiring, transferring and training employees in the U.S. on a temporary and permanent basis.