Reprinted from Dairy Today: Labor Matters, January 24, 2011.
Notification that an employee's name and Social Security
Number (SSN) do not match can come in many forms, including a
"no match" letter from the Social Security Administration
(SSA), a garnishment, or even a complaint from a third party who
claims their SSN has been stolen.
Employers still must be aware of their legal obligations when they
receive notice that an employee may be using a SSN that is not his
or her own.
Employers may not hire or employ individuals who they know are not
authorized to work in the United States. "Knowing"
includes both actual knowledge and "constructive
knowledge," which exists when an employer should know that the
employee lacks legal status.
A mismatch notification alone is not a basis for constructive
knowledge because there are many reasons for a mismatch that have
nothing to do with immigration status. For example, a woman who
fails to legally change her last name after marriage, but starts
using her husband's name could trigger a mismatch. Employees
may use false SSNs to avoid debts, even if they have legal status
in the United States.
In the case of a garnishment notice or a complaint from a third
party, the employer has no way of knowing whether or not the
disputed SSN belongs to the employee or someone else.
Employers cannot ignore SSN mismatches. First, employers are
obligated by tax law to use "due diligence" to provide
correct payroll tax information to the government. Ignoring a
mismatch could result in IRS fines. Second, employers cannot turn a
blind eye to the possible immigration implications of the mismatch.
While the mismatch itself is not a basis to terminate, information
discovered when following up could lead to an obligation to
re-verify an I-9 or even terminate the employment.
Regardless of how the mismatch came to light, the employer should
follow the procedure below.
1. Verify records. Compare the employee's SSN with his
or her records. If the records do not match the W-4 form,
then correct the W-4 form and report the correction to the SSA.
Maintain copies of correspondence submitting corrected information
to the SSA.
2. Notify the employee of the discrepancy. If the
business has been using the number provided by the employee, then
inform the employee that there is a problem with the SSN and that
he or she must resolve it with the SSA. Tell the employee to report
the correct information once it has been resolved. Do not give the
employee a deadline to report the information unless the policy is
to discharge employees who fail to provide corrected information.
If a deadline is imposed, it must allow a reasonable amount of time
to resolve the problem.
3. Confirm instructions in writing. Write a letter
directing the employee to resolve the issue with the SSA and asking
the employee to provide updated information, and include it with
the employee's pay check. The employer must continue to pay
payroll taxes, regardless of any mismatch.
If the employee returns with new information, the employer should
correct its records and notify the SSA of the correction. If the
employer does not receive corrected information by the end of the
tax year, send a letter to the employee asking them to complete a
new W-4 with their corrected SSN. Under IRS policy, once an
employer has requested the update in two successive tax years, it
does not need to ask again. As a matter of policy, having employees
submit a new W-4 on an annual basis will serve as an annual
solicitation for the correct SSN.
If the employee does not return with corrected information, do not
automatically fire the employee or re-verify their I-9 unless the
employee used the questionable SSN on the I-9. In that case,
re-verify but do not accept any document with the questionable SSN
unless and until the mismatch is resolved.
4. Establish company policy and apply it
consistently. The employer must establish and implement a
policy and procedure for responding to mismatch letters and to
maintain records of responses to mismatch letters. The policy must
be applied consistently to all employees in order to avoid claims
of discrimination.
5. Do not terminate. Employers should never assume
an employee with a reported mismatch is an undocumented alien, and
should never fire an employee solely because of a mismatch letter.
But employers cannot ignore information they receive when following
up on mismatches.
Any employee that admits to being undocumented must be terminated
immediately. If the employee comes up with an entirely new
identity, then the employer must demand an explanation. If the
explanation is reasonable (such as a legal name change), then the
employer can accept it and should re-verify the I-9.
If an employee repeatedly fails to correct a mismatch, company
policy will control. If the employer has a policy of terminating
for failure to provide accurate information, then the employee
should be terminated for failure to provide accurate information on
hire. But such a policy must be enforced consistently. Otherwise,
the employer can continue to employ the individual, but must be
aware that it may not be able to terminate others who provide
inaccurate personal data.
Establishing procedures to address mismatches consistently must be
a part of every employer's immigration compliance
strategy.
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.