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SSA will continue to not send no-match letters to employers until litigation settled

Even with the scheduled publication of the Department of Homeland Security's (DHS) supplementary final no-match regulation in the October 28, 2008, Federal Register, the Social Security Administration (SSA) will continue not to send no-match letters to employers for Tax Year (TY) 2007 until the litigation is settled, said Mark Hinkle, spokesperson for the agency, in an October 27, 2008, interview with CCH. SSA is in a "holding pattern," said Hinkle. If something happens quickly with the litigation, SSA would have to make a quick decision on whether to send the approximately 140,000 no-match letters to employers. Those letters were scheduled to go out for TY 2007 in early spring (March/April) of 2008. As of now, SSA is simply "waiting to see what happens with the no-match litigation as the rule moves through the courts," said Hinkle.

US District Court Judge Charles Breyer of the Northern District of California issued a preliminary injunction in October 2007 ( AFL-CIO v Chertoff, NDCal, No 3:07-cv-04472-CRB) stopping DHS from implementing its no-match regulation, which included mailing or otherwise sending to employers SSA no-match letters that have DHS inserts explaining the regulation. While the injunction never precluded the SSA from sending out its traditional no-match letters to employers, which excludes the DHS inserts, SSA decided that just like in TY 2006, it would not send no-match letters to employers for TY 2007.

Background. Each year, employers submit employee wages to the SSA on the Form W-2 – Wage and Tax Statements. When the SSA is unable to match an employee's name and Social Security number (SSN) from the W-2 with its own records, that employee's earnings are posted to the SSA's Earnings Suspense File until they can be matched with SSA records. As many as 8 to 9 million employees each year provide incorrect Social Security data. Since 1994, the SSA, whose role is to "improve the accuracy of wage reporting data," has attempted to correct mismatched records by sending out approximately 140,000 no-match letters to employers requesting corrected information. According to Hinkle, the SSA has sent no-match letters to employees since 1979.

SSA began not sending no-match letters to employers for TY 2006 because of the insert. DHS's regulation required the SSA to revise its no-match letters to employers, and by the time the preliminary injunction was granted in October, it was too late in the year to revise the letters again to send them out for TY 2006. The DHS insert outlined the safe harbor procedures, embodied in the regulation that employers should take to resolve the mismatch consistent with the employer's obligations under US immigration law or face civil and criminal sanctions.

Supplemental rule. On October 23, DHS issued its supplemental final rulemaking addressing the concerns raised by Judge Breyer when he enjoined the release of the agency's no-match regulation in October 2007. The supplemental rulemaking does not make any substantive changes to DHS's August 2007 final rule, the March 2008 supplemental proposed rule or alter any of the steps or time frames, called safe harbor procedures, employers can take in response to receiving a no-match letter, but instead: (1) clarifies DHS's policy on no-match letters; (2) alters the regulations anti-discrimination language; and (3) provides an final regulatory flexibility analysis. Upon publication, DHS will seek to have Breyer's preliminary injunction dissolved. The supplemental final rule can be found at: http://www.dhs.gov/xlibrary/assets/ice_no_match_letter_finalrule.pdf.

No-match letters to employees. As part of SSA's ongoing efforts to ensure that workers have an opportunity to correct any discrepancies in their earnings records, SSA began releasing TY 2007 no-match letters to individual workers on April 3, 2008. It is important to note that the employee no-match letters are not subject to DHS's no-match rule. Consequently, no-match letters have been sent to individual workers in both TYs 2006 and 2007.

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