Notification that an employee’s name and Social Security Number (SSN) do not match can come in many forms, including a “no match” letter from the Social Security Administration (SSA), a garnishment, or even a complaint from a third party who claims their SSN has been stolen.  Employers still must be aware of their legal obligations when they receive notice that an employee may be using an SSN that is not their own.  During the Obama administration, notices from the SSA were suspended, and then resumed during the Trump administration. While it remains unclear what the Biden administration will do with the notices, the end of 2020 and early 2021 has seen an increase of notices from the SSA.

            Employers may not hire or employ individuals who they know are not authorized to work in the United States.  “Knowing” includes both actual knowledge and “constructive knowledge,” which exists when an employer should know that the employee lacks legal status.

            A mismatch notification alone is not a basis for constructive knowledge because there are many reasons for a mismatch that have nothing to do with immigration status. This is particularly true when the notice comes from an entity other than the SSA, for instance where there is a garnishment with an employee’s number and someone else’s name, or a third party claiming their number was stolen.  The employer has no way of knowing whether the employee is the victim in the situation. Garnishment notices that do not match employment records should be responded to with an explanation that there is no employee that matches the garnishment, and an offer to cooperate if further information is required.  Third party claims of stolen SSNs should trigger a request for verification of the ownership of the number.  It is a simple matter for a person to get a letter from the SSA verifying that their SSN belongs to their name.

However, even SSA notifications do not trigger any presumption about immigration status. For example, a woman who fails to legally change her last name after marriage, but starts using her husband’s name could trigger a mismatch.  Employees may use false SSNs to avoid debts, even if they have legal status in the United States.  None of these signify an immigration problem.

            It is important to note that employers cannot ignore SSN mismatches.  First, employers are obligated by tax law to use “due diligence” to provide correct payroll tax information to the government.  Ignoring a mismatch could result in IRS fines. Second, employers cannot turn a blind eye to the possible immigration implications of the mismatch.  While the mismatch itself is not a basis to terminate, information discovered when following up could lead to an obligation to re-verify an I-9 or even terminate the employment.

            Regardless of how the mismatch came to light, the employer should follow the procedure below. 

1.         Check the I-9: Did the person use the Social Security card to verify their legal right to work in the United States?  For example, if the employee used a driver’s license to verify their identity, and a Social Security card to verify their legal status to work, the employer may need to reverify the I-9 in response to a mismatch notification from the SSA.  However, if the employee presented a Permanent Resident Alien Card (a document that verifies both identity and authorization to work), then there is no immigration issue because the problem SSN was not used to verify status.  In such a case, there is a payroll tax issue, but not an immigration issue.  If you do need to reverify the I-9, do not accept any document with the questionable SSN to verify status to work.  The I-9 has instructions that show the acceptable documents for various purposes.  For example, if an employee with an SSN mismatched used the SS card on hire for I-9 verification, and presents a Permanent Resident Alien Card for reverification, the immigration issue is resolved.

2.         Verify Records:  Compare the employee’s SSN with his or her records. If the records do not match the W-4 form, then correct the W-4 form and report the correction to the SSA. Maintain copies of correspondence submitting corrected information to the SSA.

3.         Notify the Employee of the Discrepancy: If the business has been using the number provided by the employee, then inform the employee that there is a problem with the SSN and that he or she must resolve it with the SSA. Tell the employee to report the correct information once it has been resolved. Do not give the employee a deadline to report the information unless the policy is to discharge employees who fail to provide corrected information. If a deadline is imposed, it must allow a reasonable amount of time to resolve the problem, typically 90-120 days.

4.         Confirm Instructions in Writing: Write a letter directing the employee to resolve the issue with the SSA and asking the employee to provide updated information, and include it with the employee’s pay check.  The employer must continue to pay payroll taxes, regardless of any mismatch.  If the employee returns with new information, the employer should correct its records and notify the SSA of the correction. If the employer does not receive corrected information by the end of the tax year, send a letter to the employee asking them to complete a new W-4 with their corrected SSN.  Under IRS policy, once an employer has requested the update in two successive tax years, it does not need to ask again.  As a matter of policy, having employees submit a new W-4 on an annual basis will serve as an annual solicitation for the correct SSN.

            If the employee does not return with corrected information, do not automatically fire the employee or reverify their I-9 unless the employee used the questionable SSN on the I-9.  In that case, reverify but do not accept any document with the questionable SSN unless and until the mismatch is resolved.

4.         Establish Company Policy and Apply it Consistently: The employer must establish and implement a policy and procedure for responding to mismatch letters and to maintain records of responses to mismatch letters.  The policy must be applied consistently to all employees in order to avoid claims of discrimination.

5.         Do not terminate: Employers should never assume an employee with a reported mismatch is an undocumented alien, and should never fire an employee solely because of a mismatch letter. But employers cannot ignore information they receive when following up on mismatches.

            Any employee that admits to being undocumented must be terminated immediately.  If the employee comes up with an entirely new identity, then the employer must demand an explanation.  If the explanation is reasonable (such as a legal name change), then the employer can accept it and should re-verify the I-9.  If an employee repeatedly fails to correct a mismatch, company policy will control. If the employer has a policy of terminating for failure to provide accurate information, then the employee should be terminated for failure to provide accurate information on hire. But such a policy must be enforced consistently.

            Establishing procedures to address mismatches consistently must be a part of every employer’s compliance strategy.

            The goal of this article is to provide employers with current labor and employment law information. The contents should not be interpreted or construed as legal advice or opinion. For individual responses to questions or concerns regarding any given situation, the reader should consult with Anthony Raimondo at Raimondo & Associates in Fresno, at (559) 432-3000