August 17, 2020
The Social Security Administration (“SSA”) maintains accurate earning records used to determine benefits for customers. Beginning March 2019, the SSA began mailing notifications to employers with at least one name and Social Security Number (“SSN”) submitted on a W-2 that did not match the records held by the SSA. The employer must make the corrections mentioned in the letters in order to allow the SSA to properly manage an employee’s earnings on record. These letters could indicate an issue with reported names, SSNs, typographical errors, unreported names, or inaccurate employer records.
Employer correction request notices, more commonly referred to as “no-match letters,” are sent to thousands of employers a year. In the first month of issuing these letters, in March 2019, the SSA sent out over 570,000 letters to employers. While the SSA has been sending out no-match letters since 1973, there was a long hiatus between 2012 and 2019 due to complaints from labor unions, business owners, and immigrant advocates.
The no-match letters sent to employers request two actions:
1. The employer should review the employee’s name, SSN, and relevant information submitted on the W-2 form; and
2. The employer should provide all necessary corrections on the W2-C form, and submit it within 60 days of receiving the no-match letter.
Who can get one?
In the past, no-match letters were only sent to employers with at least 10 employees with mismatched W-2 information. To even out the playing field, these letters are now sent to any employers with a mismatched employee on record.
Should you be concerned?
Employers should take the receipt of a no-match letter seriously. The SSA cannot properly credit the employer’s employees, and therefore cannot properly maintain their records, potentially limiting employees’ ability to receive their full benefits.
Perhaps more relevant to the employer itself, an employer must report an accurate W-2 for each employee. Employers who file incorrect information, and disregard the no-match letter, may be fined by the IRS. By complying with the letter, employers fall under a reasonable cause exception, and can eliminate this IRS fine.
How to work with the employee(s) named in the letter
An employer must not assume that employees listed in a no-match letter are undocumented immigrants and treat them differently from other employees. This could violate anti-discrimination laws. Frequently, the explanation for incorrect Social Security information is quite simple – it may be due to a name change after marriage or divorce, or even a clerical error by the SSA itself.
The following are procedures for responding to a no-match letter without risking a discrimination complaint:
• Give a copy of the letter to all employees listed and include an explanation in writing that the SSA is simply updating its records and that no adverse action will be taken because of the letter.
• Ask the employees to check their own employment records to determine if their names or SSNs have been incorrectly reported.
• Compare W-2 forms with information the employees provided on W-4 forms when they were hired. The employer should also check its own records for clerical errors in the information it submitted to the SSA.
• Any errors discovered by the employee or the employer should be promptly reported to the SSA.
• Receiving a no-match letter does not authorize an employer to require actual Social Security cards or work authorization documents, as this could violate immigration laws.
Need more information?
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This article is based on the law as of the date posted at the top of the article. This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.