New Safe Harbor procedures announced for Social Security No Match letters.

A new regulation issued on August 15, 2007 by the Department of Homeland Security (DHS) outlines the "safe harbor" procedures for employers who receive a letter from the Social Security Administration (SSA) or a notice from the DHS that an employee lacks proper authorization to work.

Each year the SSA sends out No Match letters, commonly referred to as "mismatch" letters, to employers notifying them that the combination of name and Social Security number submitted to SSA for an employee does not match agency records. These letters are sent if an employer has submitted more than 10 W-2s with mismatches or the number of mismatches amount to more than one half of one percent of all the W-2s submitted by the employer. SSA is not changing its procedures for issuing employer No Match letters, and SSA guidance on how to correct Social Security records is unchanged. However, No Match letters issued by the SSA for Tax Year 2006 will be accompanied by a letter from U.S. Immigration and Customs Enforcement (ICE) informing employers on how to respond to the employer No Match letter in a manner consistent with obligations under U.S. immigration laws.

There are many reasons for a mismatch between employer and SSA records, including transcription errors and name changes due to marriage that are not reported to SSA. Employers should not assume that the mismatch is the result of any wrongdoing on the part of the employee. Moreover, an employer who takes action against an employee based on nothing more substantial than a mismatch letter may, in fact, violate the law.

The following steps will provide protection to the employer:

* An employer who receives a No Match letter has 30 days to examine their own records to see if it is their own mistake. If so, the employer is to notify SSA of the correct information within that 30-day window.

* If the error cannot be resolved by reviewing the employer's records, the employer must notify the employee and give the employee 90 days (from the date the employer received the SSA letter) to correct the error.

* At the end of the 90 day period, the employer has three days in which to complete a new 1-9 form for the employee. The employee cannot present a document that is in dispute and must present a document that contains a photograph.

If these "safe harbor" procedures are followed, the employer will not be charged with constructive knowledge that the employee lacks authorization to work. If an employer is unable to confirm employment through these procedures, the employer must choose between taking action to terminate the employee or risk liability for violating the law by knowingly continuing to employ an unauthorized person.

ICE has developed a comprehensive interactive Safe Harbor Information Center at: http://www.ice.gov/partners/empolyers/safeharbor/index.htm, which will answer no-match, related questions, or inquiries may be directed to ICE at 800/421-7105. The Federal Register notice can be accessed at: http://a257.g.akamaiech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-160066.pdf

From the ICE Safe Harbor Information Center

Should an employer simply disregard the No Match letter from the Social Security Administration (SSA)?

No. The employer has received official notification of a problem that may have significant legal consequences for both employer and employees. If the employer elects to disregard the notice and if it is determined that some employees listed in the enclosed letter were not authorized to work, DHS/ICE could determine that the employer has violated the law by knowingly continuing to employ unauthorized workers. This could lead to civil and criminal sanctions. Written notice is one of many factors examined in the totality of circumstances to determine whether an employer knowingly hired or continued to hire unauthorized workers.

What should an employer do when it receives a Social Security Administration (SSA) No Match letter?

The employer should take reasonable steps to resolve the No Match, and apply these steps uniformly to all employees listed in the SSA letter. It is possible that a No Match was the result of a clerical error on the part of the employee, the employer, or the government. DHS/ICE considers the following to be reasonable steps if the employer:

1) Promptly (no later than 30 days) checks its records to ensure that the mismatch was not the result of an error on the part of the employer.

2) If this does not resolve the problem, asks the employee to confirm the accuracy of the employer's records.

3) If necessary, the employer should ask the employee to resolve the issue with SSA. The employer should inform employees in order to give them as much time as possible to resolve the matter and inform the employee that the employee has 90 days from the date the employer received the No Match letter to resolve the matter with SSA (explaining that resolution of the mismatch could take time).

4) If the employer was able to successfully resolve the mismatch, the employer should ensure that the instructions in the SSA letter have been followed. The employer should also verify that the error has been corrected by using the Social Security Number Verification Service (SSNVS) administered by SSA, and retain a record of the date and time of verification. SSNVS can be accessed through http://www.socialsecurity.gov/employer/ssnv.htm or by telephone at 800/772-6270.

5) If none of the foregoing measures resolves the matter within 90 days of receipt of the No Match letter, the employer should complete, within three days, a new 1-9 Form as if the employee in question were newly hired, except that no document may be used to verify the employee's authorization for work that uses the questionable Social Security number. Additionally, the employee must present a document that contains a photograph in order to establish identity or both identity and employment authorization.

If the employer cannot confirm that the employee is authorized to work (by following the above procedures), the employer risks liability for violating the law by knowingly continuing to hire unauthorized workers.

What are the penalties if an employer ignores the No Match letter and DHS/ICE establishes that the employer hired unauthorized workers?

The employer may be subject to a civil monetary penalty ranging from $275 to $2,200 per unauthorized worker for a first violation. Higher penalties can be imposed for subsequent violations. Further, criminal charges may be brought against any person or entity that engages in a pattern or practice of knowingly hiring or continuing to employ unauthorized workers. The employer may also face related criminal charges such as harboring aliens and money laundering. Given these potential penalties, it is important that employers act after receiving No Match letters.

Laura Phelps

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AMI President

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