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The Social Security Administration (”SSA”) has announced that it will resume sending “no-match letters” to employers this month. The SSA issues no-match letters when certain information on wage statements provided by the employer does not match the information maintained by the SSA. The new no-match letters, officially referred to as decentralized correspondence (DECOR) notices, will be sent to employers for the 2010 tax year.
An employer is required to provide the SSA with a W-2 for each of its employees annually. The SSA uses the earnings information on the W-2 to determine the employee’s Social Security benefit amount. The SSA compares each employee’s name and social security number on the W-2 with the same information in its records. If the information does not match, the SSA will not post the employee’s earnings and will issue a no-match letter.
Since no-match letters may be used as evidence of an employer’s constructive knowledge that specific employees may be unauthorized workers, employers should not simply ignore the letters. The Department of Justice (”DOJ”) has issued general guidance for employer’s who receive a no-match letter. For example, the DOJ warns against assuming that a no-match letter conveys information regarding the employee’s immigration status or authority to work, since no-matches can result from simple administrative errors, such as input errors by SSA staff or a reporting error by the employee or employer.
The SSA started sending no-match letters in 1979 but stopped in 2008 when a federal court enjoined the Department of Homeland Security (”DHS”) and the SSA from implementing a proposed DHS regulation called “Safe Harbor Procedures for Employers Who Receive a No-Match Letter.” The DHS has since rescinded the proposed regulation. The SSA will not send no-match letters to employers for the 2007 through 2009 tax years.