From Kevin Lashus in GT's Austin office

The Social Security Commissioner announced that as of April 6, 2011, the Administration would resume sending employer decentralized correspondence — "no-match" letters advising employers that their workers have reported a number that does not coincide with an account at the agency (See SSA Notification 1 and SSA Notification 2).

Interestingly, this announcement was posted two days before a scheduled hearing before the House Social Security Subcommittee (Sam Johnson, Chair) on the Administration’s Role in Verifying Employment Eligibility. As identified in the hearing announcement, one of the purposes of the meeting is to review proposals to expand employment verification, including enhancing the Social Security card with tamper-proof, counterfeit-resistant or biometric features and increasing enforcement through the sharing of taxpayer wage information.

Now, our friends at the Administration have never wanted to be in the enforcement business. They consider themselves America’s bankers — owing tax-payers a fiduciary duty to protect the supplemental retirement income it has collected on their behalf during the course of their life. But, it appears the Commissioner has been forced to reconsider whether the SSA should have a role in verification enforcement.

Remember that back in August 2007, DHS proposed regulations that shifted the burden to employers who received these SSA mismatch letters to establish that upon due diligence, they endeavored to rectify the mismatch with the employee’s assistance. In light of the federal litigation surrounding those regulations, the trial court enjoined the SSA from issuing notifications to employers. In July 2009, Secretary Napolitano announced that the proposed regulation was being rescinded, but there was no mention of how the SSA would return to status quo after the withdrawal of the proposed law.

In reaction to the failed litigation, the new version of the employer letter omits any mention of Immigration and Customs Enforcement — including what had been a clause that an employer’s failure to act upon receipt of the SSA notification may be construed as constructive knowledge of a verification violation — and instead returns to a more “banker” approach. SSA now simply notes that — notwithstanding the fact that SSA may provide information on the mismatch resolution to IRS or DOJ (note DHS is excluded) — failure to ameliorate the mismatch prevents the agency from crediting the employee with the correct wage.

In light of the uncertainty, we know one thing for sure: employers must have a standard operating procedure to address the receipt of these notifications. It is best to be proactive: document efforts to assist the employee AND determine what contingencies the employer may consider during the resolution process.

ICE will definitely request these SSA letters during any worksite investigation. Employers must be prepared to not only produce the letters, but also produce any evidence they have that identifies that they attempted to resolve mismatch. So, just another task to add to the list of additional responsibilities: verification police, document expert, part-time bureaucrat...