Tag: SSA

Social Security Administration ‘No Match’ Letters to Employers Make Another Comeback

Social Security Administration (SSA) has begun notifying employers that the information reported on an individual employee’s W-2 form does not match the SSA’s records with “Request for Employer Information” letters, known as “No-Match” letters.

SSA started sending these controversial informational requests in 1993, but the practice has waxed and waned in part due to litigation. In 2011, SSA resumed the practice of notifying employers of social security number mismatches. But in 2012, the Obama Administration decided to simply stop the practice.

Now, the letters are back! In July 2018, probably in response to President Donald Trump’s Buy American, Hire American Executive Order, SSA re-started the practice by sending “informational notifications” to employers and third party providers telling them of mismatches on their 2017 Forms W-2 and explaining where to find helpful resources. The plan was to send 225,000 of these notices every two weeks. Starting in Spring 2019, notices will be sent regarding 2018 Forms W-2s, but these letters, unlike the “informational” letters, will tell employers that corrections are necessary.

A mismatch does not necessarily mean that there is any wrongdoing. It can be caused by an administrative error: numbers can be reversed, names might be misspelled or changed, for instance, due to marriage. But once a letter is received, in determining how to respond, employers find themselves caught between agencies. SSA wants to maintain accurate records of earnings. ICE wants to ensure compliance with employment verification laws. And the Immigrant and Employee Rights Section of the Department of Justice (IER) wants to ensure that employers are not discriminating on the basis of citizenship, nationality or by pursuing unfair documentary practices in violation of the INA.

What is an employer to do?

  1. Don’t take any adverse action against an employee based on a No-Match letter alone.

  2. Compare the SSA information with the individual’s employment records.

  3. If the employer’s records match, ask the employee to check the name and number on his or her Social Security card.

  4. If there is a mistake on the card or the card needs to be changed or corrected, ask the employee to reach out to SSA to resolve the issue.

There are no “safe harbors.” Each case is different and must be analyzed individually to avoid missteps and penalties from either SSA, ICE, or IER.

Jackson Lewis P.C. © 2018
This post was written by Sean G. Hanagan of Jackson Lewis P.C.

Where do Social Security Payments Made by Undocumented Workers Go?

Greenberg Traurig Law firm

Many employers are familiar with the following scenario: You hire someone, put them on payroll and deduct taxes from their checks automatically – just like you do with all employees. You then find out through an audit by U.S. Immigration Customs and Enforcement (ICE) or by the employee coming clean that he or she is using a fake social security number. You consequently terminate employment on the grounds that they violated the company’s “honesty policy” or simply because he or she is not authorized to work in the United States. So what does Social Security do with the payments that the employee has made?

According to the Social Security Administration (SSA) unauthorized workers are paying an estimated $13 billion per year in social security taxes and are receiving about $1 billion in return. During an interview, Stephen Goss, the chief actuary of the SSA, estimated that there are approximately 11 million undocumented people in the United States and about 7 million of these people are working illegally. Further, out of these 7 million undocumented workers, approximately 3.1 million people are using fake or expired social security numbers. Goss noted that undocumented workers have paid around $100 billion in social security taxes over the last decade, which the SSA has treated as a positive cash flow without a home. Goss indicated that the $100 billion in unclaimed social security created by undocumented workers has been a key factor in allowing the SSA “to be paying benefits for as long as it now can.”

So, and in answering the headline question, the SSA puts all of these “homeless” contributions into the Social Security Trust Fund for Old-Age and Survivors Insurance (OSAI). This fund is used to ultimately pay out social security benefits to U.S. workers and retirees.

ARTICLE BY

Ian R. Macdonald
OF
Greenberg Traurig, LLP