We have spent a lot of time and effort over the last month and consulted with experts in the employment law field trying to determine the best possible advice to give related to the Social Security Administration (SSA) no-match letters. Most recently we have been discussing these issues with attorneys from Fisher Phillips, who have put together some further guidance on this issue. Click here to see the most recent guidance from Fisher Phillips. The following is the best advice we have at this point:
In the first step, you do need to figure out who the affected employees are. When you start this process, play careful attention to the tax year stated on the letter. Some of the employers have determined that the mis-matched records were from two ginning seasons ago. You are looking at the names and social security numbers provided by the employee and comparing that to the information you delivered when you sent payment into the SSA.
In some cases, the employer may have a good idea of who the affected employees are. I have heard examples of employees who have gotten married and had a recent name change, or other employees who have their middle initial listed on their driver’s license and their middle name spelled out on their Social Security Card. In this instance the payroll was written using the information from the driver’s license, so the Social Security Card name did not match the payroll data. If you feel comfortable that you have identified the employees without using the portal, you may elect not to use the portal.
We have had many gins call to say that it sure would be easier if they could use the portal, so that they could get a list of the names that the SSA is referring to. After carefully studying the issue, the recommendation we are receiving is that is okay to log into the online portal to find the names in question, if you are not able to determine the names of the mismatches without the system. As long as you complete the remainder of this process as outlined below, it is unlikely that accessing the portal will be a problem for your company.
The key part of this process comes next. For each current employee identified by this letter, you should give them notification in writing that a mismatch has been identified by the SSA. Click Here to see a sample letter. Before communicating with the employees, however you should try to identify the source of the mismatch. If it is an obvious issue such as a number transposed for the SSN, then you should file the W-2C to make this correction. This may be done online through the SSA portal, or you can mail in a corrected form. If you elect to mail this form in, be sure to follow the instructions carefully – you must order the form, and they will mail you a special copy. Do not pull the sample form off the web and try to send that form in by mail.
If you are unsure of the source of the mismatch for a current employee, then the employee needs to contact the SSA and get this mismatch resolved. Under this scenario you should give the employee the notification in writing, and make sure you document when you gave them this letter. You should explain to them that the money you are paying to SSA is for their benefit down the road, and it is important that they get credit for this money being payed. Review your records carefully before talking to your employee, so that you can get the obvious issues resolved without alarming the employees. The phone number for the employee to use is listed on the letter you received. The real tough part comes if the worker refuses to contact the SSA, or just puts it off for a very long period of time. If you find yourself in this situation, it will be best to communicate with us and your attorney before taking any action on this employee, but this step is much further down the road.
It is recommended that you ask the employee to let you know within a certain time period (maybe 30 days) of the result of their discussion with the SSA. It is important that you document these discussions and any results from the employee contacting the SSA. You might want to give them this information in writing, using the same template discussed below. For all current employees, you need to keep track of whether they completed these steps. It would probably be good to keep the same records for former employees, but it is very unlikely that they will respond to your letter.
If the employee identified in the letter is not a current employee, then you will want to send them a letter. Click Here for a sample letter that you can use for former employees, and for current ones (with a little modification). You should keep a copy of this letter, and document when it was mailed.
Once you have contacted all your current and past employees, then you should send a reply to the SSA. Click Here for a sample letter to use. You want to be sure you have sent off the letters to the former employees and have talked to your current employees before sending your reply letter to the SSA. This letter is not saying that you have fixed all the issues that need to be fixed, but it is saying that you have notified all of your employees and former employees of the issue and are working to get all these issues resolved.
Going forward, there are two scenarios that I would think are most likely potential issues arising from these letters. The first is for a current employee that does not get their issue straightened out. On one hand, the letter from the SSA says that it should not be used for hiring or employment decisions. On the other hand, doing nothing about an employee mismatch with no explanation could later be taken as evidence of knowingly employing a person who is not lawfully permitted to work in the US, with substantial penalties. Therefore, it is important to document how you handled each of these mis-match employees, and to document how you resolved each issue. Be sure to contact your attorney before taking any action against any employee – the decision of what to do if there is no resolution should be made very carefully.
A similar issue could happen with a returning employee. If you were notified of an employee mis-match on a former employee that returns the following season, you could have essentially the same problem described above. This is a second topic that you may want to visit with your attorney about, especially if you commonly have the same workers return each year.
I hope this information is sufficient for all of you to get your employees notified and to get the notification letter back to the SSA within the designated 60-day time period. If you do have significant issues come up during this process and need assistance in getting advice on these specific issues, please give your TCGA office a call. We will be glad to help you in any way possible with this issue.