In the Post 9/11 World, Do You Know Who Your Employees Really Are?

September 23, 2002

Area businesses have reported receiving some disconcerting mail in the past few months. Formerly titled an "Employer Correction Request," and informally referred to as a "Mismatch Letter," this letter from the Social Security Administration (SSA) often creates confusion, uncertainty and fear in employers. A recent policy change at SSA, precipitated in large part by the events of 9/11, has resulted in the SSA contacting any employer found to have discrepancies with the social security numbers of its employees. The mismatch letter is a red flag to the employer that the social security number of one or more of its employees, submitted for tax purposes, does not match SSA records. While the letter and its implications require attention, an employer must be cautious not to overreact and make a mountain out of a molehill or invite litigation.

By way of background, the Social Security Number (SSN) system was created in 1936 as a means for the government to track wage "credits" so that an employee would receive the proper credit for benefits due at retirement age. Each year, an employer must submit a record of each employee’s earnings to the Internal Revenue Service (IRS), with the SSA posting this data against individual employees’ accounts. When there is a discrepancy between data submitted and data in the SSA database, the employee credit goes into a "suspense" account, and the SSA attempts to rectify the discrepancy by sending out a mismatch letter to the employer. Prior to 2002, these letters were sent only to companies that submitted data containing with more than 10% error, but a new policy has required letters to be sent to all employers with at least one mismatch. This is expected to result in an increase of up to 700% more letters to be sent in 2002 than in the past.

Receipt of a mismatch letter is a red flag in the fact that it requires action on the part of an employer, but it should be treated with yellow flag sensitivity, in that improper action on the part of an employer could result in discriminatory action being taken against a lawfully employed worker. An employer who receives a mismatch letter is advised to take the following action. The employer should verify the accuracy of the information they submitted to the Internal Revenue Service and eliminate the possibility of human reporting error. The employer can request to see the employee’s social security card to perform this revalidation. If the information submitted by the employer matches that submitted by the employee, then the employer should request additional information from the employee to validate their authorization to work in the United States. Here is where an employer should exercise caution. In ascertaining what documentation to request and procedures to take, the employer should consult an immigration or employment attorney relative to their obligations under federal law. With very few exceptions, the Immigration Reform and Control Act made all U.S. employers responsible to verify the employment eligibility and identity of all employees hired to work in the United States after November 6, 1986. Further, the Immigration and Nationality Act ("INA") provides that it is unlawful for an employer to hire a non-citizen knowing that he or she is not authorized to work for him. Many employers erroneously assume that not knowingly hiring or continuing to employ illegal aliens is the full extent of their immigration obligations. To the contrary, it is unlawful to hire anyone without complying with certain "employment verification procedures." Section 274A(b) of the INA directs each employer to verify that every employee hired after November 6, 1986 is authorized to work in the United States. This obligation applies to citizen and alien job applicants alike. To implement the law, employers are required to complete Employment Eligibility Verification forms (Form I-9) for all employees, including U.S. citizens.

Employers must verify employment eligibility under federal law, particularly when they receive a mismatch letter. However, caution is the watchword, as in certain circumstances it may be interpreted as a discriminatory act to require the employee to again produce their paperwork. A request should be made that the employee check his social security card and verify that his/her name and SSN match those in the employers records that were submitted to the IRS. In the event that the employee cannot account for the mismatch of the employer’s information and the information in the SSA database, the employee should be referred to the local SSA office. It is the employee’s responsibility to rectify the situation and inform the employer of any changes, enabling them to update their records. If an employee refuses to contact the SSN office in an attempt to rectify the mismatch, an employer can then attempt to verify the employee’s identity and employment verification. If an employee admits that he/she provided false information to the employer, does not have legal employment status, or obtained a fraudulent SSN, it is the employer’s legal obligation to terminate that employee immediately. If an employee cannot provide acceptable information to verify his/her employment status, while arguably appropriate to terminate the employee, it is recommended that the employer first seek legal counsel.

Foremost, an employer must keep in mind that a mismatch letter is not a reason to take action against an employee. Laying off, firing, suspending or discriminating against the employee solely due to mismatch letter would be ill advised. Such action may be regarded as discrimination on the basis of nationality, ethnicity, or citizenship, with potentially grave implications for an employer if such action is taken against a legal immigrant with lawful employment status. Nevertheless, appropriate steps must be taken to respond to the mismatch letter within 60 days of its receipt. It is a sensitive issue that must be treated respectfully on the part of the employer. If there are any gray areas, it is recommended that the employer seek legal counsel to avoid any action that could prove detrimental to the employer and employee.

By: Martin C. Dunn, Esquire
Western MA Law Tribune, August 28, 2002
BusinessWest, September, 2002

by: Martin C. Dunn, Esquire

Western MA Law Tribune, BusinessWest
August 28, 2002, September 2002