The letter of the law on employment

More than 700,000 Social Security Administration mismatch letters are sent each year. How should an employer respond to one these letter? Does the employee need to be fired? Is the employer subject to fines when an employee uses the wrong social security number? Can the employer force employees to show social security cards?

The letters claim that the employee’s W-2 form contains either an incorrect employee name or Social Security number. The mismatch letters claim that the employer could be fined $50 per violation, up to a maximum of $250,000 per year.

An employer might think the best response is to demand to see the employee’s Social Security number or fire them for providing false information. Either option would be a risky choice and could cause the employer to be sued.

First, immigration laws preclude employers from demanding that new employees show a Social Security card. An employer who asks to see specific documents or documents other than the ones presented by the employee may be subject to a discrimination complaint based on engaging in an unfair immigration-related employment practice.

Does the mismatch letter mean that the employee must be fired because he or she may not be authorized to work? No. U.S. Immigration Services has issued a legal opinion that expressly states that receipt of a single mismatch letter is not grounds to reverify employment eligibility or to suspect that an employee is not authorized to work in this country.

The government precludes an employer from requiring more documents than are minimally required to complete the I-9 form. Terminating an employee or asking them to produce new documents may subject employers to complaints and monetary payments based on document abuse and unfair immigration-related employment practices. They also could face lawsuits based on race or national origin discrimination.

Also, Social Security cannot impose the penalties described in its letter because it has no enforcement power. It can only refer the employer to the IRS to pursue the matter.

There are actions that the employer can take to protect itself if the IRS initiates such an action against an employer. Upon receiving a mismatch letter, employers should notify the employee in writing that Social Security believes there is a possible problem and suggest that the employee go to the agency to address the matter. Keep records of correspondence provided to employees in the event they are needed to defend the company in an IRS proceeding.

Be wary of responding to follow-up letters from Social Security. Generally, employers are not required to respond. Keeping in mind that such correspondence can be evidence against your company, you should certainly seek the advice of legal counsel.

There are steps worth taking to protect yourself and help provide a solid defense. W-9 forms are a good tool for companies to use in response to a mismatch letter. Employers should have the employee sign a W-9 form, which states under oath that the Social Security number being provided to the employer is accurate. The W-9 forms can be used with all new hires to enable the employer to rely on the number provided on the payroll forms.

It becomes a different issue if an employee tells you that his or her Social Security number is not valid. The employer generally has the right to terminate employment. In some circumstances, however, the employer may choose to allow the employee to provide accurate identification and a Social Security number to continue working for the company.

Finally, keep in mind that there are many reasons why an employee’s name and Social Security number might not match the agency’s records. Typographical errors, transposed numbers, incomplete names, blank names, or name changes are just a few. The bottom line is that a Social Security mismatch letter is not notice of any immigration or tax violation.