Last seen in large numbers in the George W. Bush Administration, the Social Security Administration (SSA) began mailing Employer Correction Request (EDCOR) Notices (aka “no match” letters) in March 2019. The notices are triggered when an employer has at least one name and Social Security Number (SSN) combination submitted on Form W-2 that does not match SSA records.
On the surface, the purpose of the notices is to clean up the SSA records so that earnings are credited to employees. Social Security earnings that cannot be matched with an employee go to the Earnings Suspense File (ESF).
According to the Office of the Inspector General in its Fiscal Year 2018 Inspector General’s Statement on the Social Security Administration’s Major Management and Performance Challenges, the ESF had accumulated more than $1.6 trillion in wages and about 367 million wage items for tax years 1938 through 2017. In 2017 alone, SSA posted approximately $94.8 billion in wages and 7.7 million wage items to the ESF.
SSA makes available the SSN Verification Service (SSNVS) for the purpose of helping employers correct their records to avoid such mismatches. The EDCOR notices are another way SSA is striving to reduce the ESF.
This would all be well and good if our immigration system accommodated all the workers our economy needs. As it stands now, the process of attempting to reduce the ESF may result in reducing some employers’ workforces – perhaps catastrophically.
All employers are required to verify employees’ authorization to work by completing a Form I-9. Even employers who carefully follow the I-9 requirements are not necessarily document experts. Convincing fake documents are readily available for purchase. More employers have chosen to use E-Verify, the on-line system to double check workers’ authorization. But those signing up now cannot check employees retroactively (unless they are a federal contractor covered by the Federal Acquisitions Rules). Thus, many employers are unaware of the real immigration status of their workers – or lack thereof – despite diligent efforts.
Enter the EDCOR notice. This notice, while not specifically addressing immigration status per its own language, requires an employer to take action:
- Register with the Business Services Online (BSO) to access the Employer Report Status to see the names and SSNs that could not be matched.
- Review the names and SSNs to see if an error was made in recording employee name, date of birth or SSN. If so, a correction can be made by filing a Form W-2C (which can be filed online). The letter asks that these changes be made within 60 days, which appears not to be a hard deadline.
- If no obvious employer error exists, notify the affected employees. It is possible that a non-obvious error is triggering the notice. Examples can be a name change from marriage or “Americanization” or a transposition of numbers in the SSN or date of birth (such as using day/month/year, as is done in many countries).
A sample employee notice for use by employers is provided on the SSA website for this purpose. Employers are not required to use this sample.
- If an employee provides a correction, make the change via Form W-2C and all is well. If not, instruct the employee to go to the nearest SSA office to resolve the issue. Once resolved, the employer can update SSA via Form W-2C.
That is the theory. The reality is more complex.
Given the number of unauthorized workers in certain occupations, it is not unreasonable for employers to suspect that the receipt of the EDCOR notice could mean they have a problem. If it turns out that some or all of the people with mismatches are not working legally, they will likely leave soon after receiving the employee notice. Employers must balance business needs with the need to comply with the law so that they can mitigate adverse consequences.
Following are some tips for doing so:
- Do not fire anyone based solely on the fact of a mismatch. Many mismatches can be explained and resolved.
- Do not ignore the EDCOR notices. Doing so could lead an Immigration and Customs Enforcement (ICE) agent later auditing your I-9s to find that you had “constructive notice” of unauthorized employment and did not act. Not only are “knowing hire or continuing to employ” violations more expensive then “paperwork” violations, they could in an extreme case lead to criminal charges.
- Work with an immigration attorney who has knowledge about worksite enforcement to determine how to approach remediation if you think you may have a problem. Not only will you gain attorney/client privilege protection of conversations and correspondence, but also an understanding of the big picture of worksite enforcement and how it could affect your business. The immigration attorney should also have employment law expertise available as the questions that arise in this situation can trigger other questions affecting the entire workforce, such as whether an employee should be provided with paid time off (PTO) to resolve the mismatch or how to avoid unlawful discrimination when executing a plan to address the notices. In some cases, criminal defense expertise could also be needed.
- Receipt of EDCOR notices could also mean that I-9 training or an internal audit is in order. This should also be done with the assistance of an immigration lawyer for the same reasons.
- Remember that SSN Verification Service may be used to confirm your W-2s are recorded correctly. They are not to be used to screen employees pre-hire or as a substitute for an I-9 or E-Verify.
Although ICE and SSA have entered into a memorandum of understanding fairly recently, we do not know how much or what type of information sharing is happening between the agencies. In the past, no EDCOR notice information was shared, but ICE often requests copies of notices received in the context of an I-9 audit. This may have changed.
We understand that a disruption in your workforce can be devastating in a business sense and personally and must be handled with sensitivity to the law and business reality. Our team is happy to assist you.
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