Don't Panic About Immigration “No-Match” Letter

June 16, 2008

New rules adopted last year by the U.S. Department of Homeland Security gave employers 30 days to respond to a notice of a discrepancy regarding an employee's legal working status, or "no-match" letter.  The new rules were an attempt to crack down on businesses that employ undocumented workers.  Penalties for failure to comply with the new rules are stiff -- up to $10,000 per violation. 

So what happens if you get a Social Security Administration (SSA) “no-match” letter?  Should you panic?   

No, each year, employers file a Wage and Tax Statement (Form W-2) with the SSA and the Internal Revenue Service (IRS) to report how much they paid their employees and how much they deducted in taxes from employees’ wages throughout the year.  SSA sends a “no-match” letter when the names or Social Security numbers (SSNs) listed on an employer’s Form W-2 do not match SSA’s records.  The letter’s purpose is to notify workers and employers of the discrepancy and to alert workers that they are not receiving proper credit for their earnings.

If you get a no-match letter for an employee, avoid taking immediate adverse action against the employee such as laying off, suspending, firing, or discriminating against the employee.  A no-match letter simply says the employee's information did not match government records, and is not necessarily an indication that the employee is ineligible to work in the U.S.  

In fact, firing an employee solely on the basis of a no-match letter may open you up to a discrimination lawsuit. At the same time, if you do not follow up on a no-match letter in a timely manner, you may be cited for knowingly employing an unauthorized worker, which is a violation of Federal law.  

So, protect yourself from legal action from both an employee and the federal government when you receive a no-match letter.  Start by getting a copy of the rules at the Department of Homeland Security Web site.  In addition, the U.S. Department of Justice and the U.S. Small Business Administration provide assistance on how to legally verify the work status of employees without committing unlawful discrimination.  You can get more information at Department of Justice at http://www.usdoj.gov/crt/osc/htm/article.htm or at http://www.business.gov/guides/employment/managing/immigration.html. 

For specific situations be sure to consult an attorney.