Increasing numbers of employers are receiving a letter from the Social Security Administration ("SSA") advising them that there is a mismatch between a reported Social Security Number ("SSN") and a worker's name. Beginning with the SSA’s processing of 2002 W-2 reports, SSA is sending letters to employers whose W-2 data includes one or more mismatches with SSA data. Although this practice of sending letters began in 1993, letters were typically sent only to employers with a mismatch rate of more than 10%.

The SSA letters identify the mismatch and instruct employers on the possible reasons why the W-2 reports they filed do not match SSA's database. In addition, the letters provide detailed instructions on correcting the discrepant information, but also caution employers not to take adverse action against an employee whose SSN appears on the attachment.

SSA mismatch letters often create some level of confusion and concern for employers because of potentially conflicting federal wage reporting requirements and U.S. immigration law obligations. When a letter is received, it is necessary to take proper action in order to avoid a charge of actual or constructive knowledge of employing unauthorized aliens, which could result in penalties under the employer sanctions laws, including possible criminal penalties for a practice of employing workers with knowledge of their unauthorized status, and penalties under the Internal Revenue Code for failure to report accurate W-2 data. On the other hand, immediately terminating an employee can result in a possible claim of discrimination.

Every employer that receives a letter has an obligation to confirm the employment authorization status of its employees listed on a SSA mismatch letter. If an employee is unable to explain and resolve the discrepancy within a reasonable period of time, then termination should be considered. If the employee admits during this process that he or she is unauthorized, the employer must terminate the employee immediately.

Social Security Administration Requirements
The SSA requires employers to use any means available to obtain correct information for earnings reporting. The SSA does not require that employers address an individual’s immigration status. SSA officials also state that any notification by SSA of a SSN mismatch is not actual notification that a worker may be undocumented, since there are many reasons a mismatch may occur (including clerical error, name change by the employee, or transliteration of non-Roman names).

SSA's letters instruct employers to take the following action to correct discrepancies in W-2 data:

  1. Compare employment records to the Forms W-2 submitted to the SSA.
  2. If the employment records do not match, submit corrections to SSA using Forms W-2c.
  3. If the employment records do match, "ask your employee to check his/her Social Security card and to inform you of any name or SSN difference between your records and his/her card. If your employment records are incorrect, correct your records." Remind the employees to report to SSA name changes due to marriage, divorce or other reasons.
  4. If the employment records match the information on the employee's Social Security card, "have the employee contact any Social Security office to resolve the issue…and inform you of any changes" after the discrepancy has been resolved.


Under the Immigration Reform and Control Act of 1986 ("IRCA"), employers should avoid requiring employees to present particular documents for employment eligibility verification purposes. Employees are not required to show employers their Social Security cards. Requiring that an employee present her Social Security card could violate the document abuse provisions of IRCA, which both enacted the employer verification program and made it illegal to ask any individual for more or different documents than are necessary to prove employment eligibility.

Lastly, the SSA has stated emphatically that it is not "cooperating" in Immigration and Naturalization Service ("INS") enforcement actions, and that it does not deem the "no-match" letters as constructive knowledge.

Immigration and Naturalization Service Requirements
The INS does not consider notice of this discrepancy from SSA to an employer by itself to put the employer on notice that the employee is unauthorized to work, or to require reverification of documents or further inquiry as to the employee's work authorization. However, if an employee has been given the opportunity for wage reporting purposes to explain and reconcile a reported discrepancy with SSA records, and has failed to do so satisfactorily, then the INS may consider that the employer has violated Section 274 of the Immigration and Nationality Act, which prohibits the unlawful employment of aliens. Therefore, an employer who receives a letter should take the requisite steps to verify that the employee is actually eligible to continue to be employed, rather than continue to employ someone illegally.

Practical Solutions to Avoid Further Problems
The recent heightened administration of SSA is harshly impacting both employers and employees, particularly if this issue arises after an employee has worked for the employer for any length of time.

In order to reduce the likelihood of Social Security mismatch problems in the future, it is recommended that the employer verify the SSN by calling the SSA at the time of hiring the new employee. The telephone number for verifying an employee's SSN is (800) 772-1213.

Ross & Hardies periodically publishes Legal Updates concerning developments that may be of interest to our clients. If you would be interested in discussing the issue herein, please contact Mari Yamamoto Regnier (312.750.8626), Robert W. Karr, Jr (312.750.3612) or your regular contact at Ross & Hardies.

This Legal Update is published by Ross & Hardies to provide a summary of significant developments to our clients and friends. It is intended to be informational and does not constitute legal advice regarding any specific situation.