United States: Immigration Haunting: Social Security Administration Resumes Issuing No-Match Notices

Seyfarth Synopsis: The Social Security Administration has once again resumed issuing No-Match notices to employers. The notices alert businesses that SSA has identified data discrepancies between the agency's records and employer-provided data submitted for payroll tax reporting to the IRS. Issuance of the notice triggers a duty upon employers to take action. While a No-Match notice may involve an innocent clerical mistake or an unreported name change, it could also offer a clue suggesting that workers named in the notice may lack the right to work in the United States. This blog outlines the risks and the measures prudent employers should take to comply with SSA requirements while avoiding the knowing employment of unauthorized workers and the risk of unlawful discrimination under the immigration laws.

If the U.S.'s dysfunctional and baffling immigration laws were a bemusement park, one of the scariest rides would be that tottering roller-coaster, "Worksite Enforcement." The ride is rickety and showing its age (having been constructed in 1990 with the enactment of the Immigration Reform and Control Act of 1986 [IRCA]). This law — like every good ride — was designed from the outset to push, pull and contort riders in opposing, vertiginous directions, prompting all to become excited and some to heave, as they continuously revolve around the https://www.uscis.gov/i-9 Form I-9 (Employment Eligibility Verification).

The ride propels millions of U.S. employers and innumerable new hires in a circular journey during the first three days of the new employment relationship. Employers on the ride are pushed by one group of carneys (the Homeland Security Investigations [HSI] of U.S. Immigration and Customs Enforcement [ICE], and U.S. Citizenship and Immigration Services [USCIS] in the Department of Homeland Security [DHS]) to confirm that all new hires and current employees with expiring work permission are okay to work in the United States. These carneys frighten employers on the ride by fining and sometimes criminally prosecuting those who know or should know that persons they employ lack work permission.

At the same time, other carneys (the Immigrant and Employee Rights [IER] Section of the Department of Justice [DOJ]) pull employers on the ride in the opposite direction — away from the temptation to discriminate against workers on the basis of citizenship status or national origin, or to engage in other unlawful practices.

Employees, prospective and current, must also spin on the I-9 unmerry-go-round. Without the employer's help or suggestion, workers must choose the original forms of ID from the dizzying I-9 Lists of Acceptable Documents to present to the employer in order to prove personal identity and the right to work.

No bemusement park would be complete without a haunted house — and I-9 Land does not disappoint. It features a stomach-churning trolley ride known as the Social-Security Administration (SSA) No-Match Notice for employers who are dared or goaded to enter. Last March, SSA pulled the canvas off this ride (having allowed it to go dark for several years after a history of complaints from far and wide).

Like every good haunted house, SSA starts the No-Match trolley with a surprise — a seemingly innocuous notice that alerts employers of a curious discrepancy. SSA records, the agency notice states, contain data fields that are inexplicably different from the same information reported by the employer to the Internal Revenue Service (IRS). The notice to employers states:

You reported X# employee names and Social Security numbers (SSN) on the Wage and Tax Statements (Forms W-2) for tax year xxxx that do not match our records. We need corrected information from you so that we can reconcile employer wage reports and credit your employees' earnings to their Social Security records. It is important because these records can determine if someone is entitled to Social Security retirement, disability, and survivors benefits, and how much he or she can receive. If the information you report to us is incorrect, your employee may not get benefits he or she is due. There are a number of reasons why reported names and SSNs may not agree with our records, such as typographical error. (Bolding in original)

Witting or not, SSA lulls credulous employers into believing that this is an important but merely ministerial paperwork matter requiring simple correction:

IMPORTANT: This letter does not imply that you or your employee intentionally gave the government wrong information about the employee's name or SSN. This letter does not address your employee's work authorization or immigration status.

You should not use this letter to take any adverse action against an employee, such as laying off, suspending, firing, or discriminating against that individual, just because his or her SSN or name does not match our records. Any of those actions could, in fact, violate State or Federal law and subject you to legal consequences. (Bolding in original)

SSA also helpfully (in the sense of the adage, "I'm from the government, and I'm here to help you") offers dupable employers a sample notice to employees with discrepant payroll records, which soothingly reports:

According to Social Security, the information above does not match Social Security's records. You should:

  • Check to see if the information above matches the name and Social Security Number on your social security card. If it does not match, please provide me with the exact information as it is shown on your Social Security card.
  • If the information above matches your card, please check with any local Social Security office to resolve the issue. Once resolved, please inform me of any changes. Go to ssa.gov or call 1-800-772- 1213 to find the office nearest you.

NOTE: This notice does not imply that you intentionally provided incorrect information about your name or Social Security Number, nor does this adversely affect your employment.

The No-Match ride quickly torments unsuspecting employers who follow this advice. No-Match notice recipients are in for a shock for there are terrors just around the bend: A huge population of undocumented individuals in the U.S. workforce, estimated at about 7 million, the ready availability of fraudulent documents of identity and employment eligibility, the plague of identity theft, and the prevalence of imposters assuming the identities of actual U.S. citizens and green card holders, and the imminent 2020 deadline on Real ID driver's licenses,.

Hapless employers on the No-Match ride, especially those in industries with historically high levels of unauthorized employment (such as hospitality, manufacturing, agriculture, food service), will soon discover that the SSA discrepancies — once brought to the attention of affected employees — are not satisfactorily or favorably resolved.

In some cases, the employees take no action, and the employer declines to follow up. This is a perilous course because it raises the specter that if, as is foreseeable, the employee indeed lacks the right to work, then the carneys of HSI (once the relevant facts come to light) will likely accuse the employer of having had "constructive knowledge" of the individual's unlawful employment under 8 CFR § 274a(1)(l)(1). This USCIS regulation lists examples of "you should have known" constructive knowledge, including situations where an employer has "information available to it that would indicate that the alien is not authorized to work . . . "

As I discussed in "To Know or Not to Know: Immigration, Constructive Knowledge, and the Diligence That's Due," an employer's receipt of a No-Match notice imposes on employers a duty to investigate and resolve, one way or another, the question of whether the affected employee is work-authorized in the United States.

No-Match notices pose a serious risk if they are ignored or treated perfunctorily. Fines for the knowing and "should have known" employment of unauthorized workers are substantial, increasing periodically with inflation adjustments, and worse still, criminal sanctions can be imposed under the "harboring" laws, and a host of other federal pain points.

So how do employers get off the No-Match ride? Painful as it may prove to be, they confront employees with the discrepancies in SSA and employee-reported information, and insist that, within a reasonable time, each notified worker takes steps to correct, by presenting credible evidence, what may be an unwitting error, or reaffirm identity and employment eligibility on the I-9, or else, face termination of employment.

Since averting one's glance won't suffice, employers may come to learn, frighteningly, that a large segment of their workforce is unauthorized, and must be terminated. This is where immigration lawyers, acting as sherpas, are poised to help escort employers off the No-Match ride. Seasoned immigration counsel can suggest reasonable steps to pursue, consistent with real business needs, so that disruptions and risks are kept to a minimum. For details, listen to the forthcoming webinar next week, or ask for the slide deck and recordings, presented by this blogger, and Seyfarth Shaw colleagues, Leon Rodriguez (USCIS Director under President Obama) and Dawn Lurie (I-9 practitioner extraordinaire).

At least one prominent immigration lawyer has pooh-poohed the notion that employers are under a duty to do anything more than alert affected employees that SSA has issued a No-Match notice and instruct them to fix it. He points to DHS's 2009 rescission (in the face of a preliminary injunction) of a safe harbor procedure for compliance with No-Match notices. Don't count on it. The No-Match ride is more perilous than that. Aside from the IRS penalties for providing inaccurate payroll reports, there is the haunting specter of the HSI carneys. Cue the words of Governor Ahnold in the Terminator ("Ahll be baack"). As DHS reinforced in the 2009 rescission notice, despite the safe-harbor's elimination, IRCA remains on the books and will be enforced:

[A] finding of constructive knowledge of unauthorized employment may be based on the totality of the circumstances. Employers remain liable where the totality of the circumstances establishes constructive knowledge that the employer knowingly hired or continued to employ unauthorized workers. An employer's receipt of a No-Match letter and the nature of the employer's response to the letter are only two factors that may be considered in determining the totality of the circumstances. . . .

DHS acknowledges that receipt of the No-Match letter, without more, does not mean that the employee is not authorized to work or that the employee provided a fraudulent name or social security number. The discrepancy may be based upon a number of reasons unrelated to immigration status, such as clerical errors or employees' name changes that may not have been reported to SSA. However, a No-Match letter may also be generated because the individual is unauthorized to work in the United States and provided fraudulent information to the employer at the time of hire.

In the same notice rescinding the safe-harbor process, DHS warned employers not to go overboard by discriminating against lawfully authorized workers who are dinged by a No-Match notice:

DHS acknowledges that an employer who terminates an employee without attempting to resolve the issues raised in a No-Match letter, or who treats employees differently based upon national origin, perceived citizenship status, or other prohibited characteristics may be found to have engaged in unlawful discrimination under the anti-discrimination provision of the INA . . . That fact does not, however, warrant DHS changing its earlier position that receipt of a No-Match letter and an employer's response to a No-Match letter, in the totality of the circumstances, may be used as evidence of a violation of the employment restrictions of the Immigration and Nationality Act. . . . Employers should not use No-Match letters, without more, as a basis for firing employees without resolution of the mis-match, and DHS has never countenanced such a practice.

Still the scariest part of the No-Match ride is that it can go on forever. Confronted workers tagged by a No-Match notice who are rightly terminated simply take their seemingly genuine but imperfect documents, or procure a better, more convincing set, and move to a different unsuspecting employer in 2019 America where a sizzling, low-employment economy makes finding a job a snap.

Only Congress can fix this bemusement park, if and when it eventually comes to grips with the need for comprehensive immigration reform — legislative fixes that include some path to legal status for the undocumented and a foolproof system of employment eligibility verification. Meantime, employers, hold tight, and endure the ride.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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