SSA Decides It Will Not Issue Employer No-Match Letters

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					SSA Decides It Will Not Issue Employer No-Match Letters This Year

The Social Security Administration will not be sending out no-match letters to employers this year
because of the lawsuit challenging the Homeland Security Department's worksite enforcement
regulations, an SSA spokesman told BNA Nov. 13.

The decision not to send out the letters based on 2006 tax year data means SSA is not likely to
send out any letters until at least spring of 2008, SSA spokesman Mark Hinkle said. By not
sending out the letters and waiting until 2008, Hinkle said SSA will not have issued any employer
no-match letters during 2007.

A federal judge in California Oct. 10 granted a preliminary injunction barring SSA from sending
out the no-match letters because for the first time the letters were to include language threatening
possible immigration law criminal and civil liability for employers that failed to respond to the
letters.
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da3e634d6c409a385257371000dd328?OpenDocument)

"Because of the lawsuit, we needed to revise letters and it became apparent it was getting too
late in the year to send them out," Hinkle explained Nov. 13, adding that employers and SSA
were already gearing up to focus on wage reporting for 2007.

The lawsuit was triggered by the Bush administration's Aug. 10 announcement that SSA would
be altering how it sends out no-match letters. According to the new rule, SSA would include
language in the letter explaining there was possible liability under immigration laws. In addition,
SSA planned to include a general letter from DHS explaining the liability as well as describing a
"safe harbor provision" meant to protect employers who attempted to comply with the letter.
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7f191a5fc5e35f185257334001000a5?OpenDocument)

Although DHS was not going to have access to the names of employers sent the no-match
letters, the new rule would treat the receipt of the letter as evidence that the employer had
"constructive knowledge" that an immigration violation was taking place.

The final rule was challenged in the U.S. District Court for the Northern District of California by a
coalition of immigrant rights, organized labor, and civil liberties groups led by the AFL-CIO, the
American Civil Liberties Union, and the National Immigration Law Center. The U.S. Chamber of
Commerce and other business groups later joined the litigation.

SSA had planned to send out no-match letters containing warnings from DHS regarding
immigration law liability beginning Sept. 4, even before the final rule was to be implemented. That
plan was derailed, however, when Judge Maxine Chesney of the Northern District of California
Aug. 31 issued a temporary restraining order preventing the letters from being sent.
(http://exchange.altshulerberzon.com/ip/BNA/DLR.NSF/5f64d1a440715be485256b57005ac7d2/2
23dd3f1aea168438525734d00061187?OpenDocument)

After the delay prompted by Chesney's order and then Judge Charles Breyer's Oct. 10 grant of a
preliminary injunction, Hinkle said that SSA believed it was running out of time to rewrite the
notice and expect employers to correct wage data.

Each year, the SSA sends letters to some 138,000 employers pointing out discrepancies between
data sent to SSA by employers and the information already available in the SSA database. Hinkle
said the letters involve as many as 9 million employees each year who may have provided
incorrect Social Security data. SSA has sent out the letters since 1994.
The letters are usually sent out in "batches" starting in March or April, Hinkle said, and employers
are asked to correct data. Anticipating the final rule from DHS, he said SSA last spring sent out
no employer letters based on the 2006 tax year but that some workers did receive personal
notices as part of SSA's efforts.

SSA uses the no-match letters as a way of informing employers that there is a problem with the
W-2 information provided to SSA. Those problems can be due to the wrong name being put on
the form, an error in reporting the Social Security number, or other errors that can occur on the
employer's part.

Until this year, SSA has said that the no-match letters were designed to correct information and
not meant to serve as an worksite immigration enforcement tool. SSA has opposed permitting
DHS to have access to the names of employers who receive the letters because it says the
letters are designed to correct data, not create liability.

In arguments to the federal court on whether a preliminary injunction should be granted, SSA
joined with DHS in arguing that SSA would be harmed if they were unable to send out no-match
letters for this tax year because it would mean that there would be a large batch of information
that would not be corrected.

In addition, SSA argued to the federal court that pushing back the date it could send the no-match
letters would conflict with SSA's busiest time period--the season from January to March when W-
2 forms are sent out--and therefore burden the agency. In its brief to the court, the government
argued the failure to send out the no-match letters would "frustrate the purpose of providing
notice to employers that their employees' Social Security earnings are not being credited to their
accounts."

Breyer, however, was unconvinced and pointed out that the injunction did not bar SSA from
sending out its letters and instead barred it from including the DHS liability language.

"The plaintiffs have not requested a preliminary injunction precluding SSA from sending out its
traditional no-match letters for tax purposes, as the agency has for over a decade," Breyer said,
adding "SSA has acknowledged that it could remove the DHS insert and related language from
its mailing in 30 days."

				
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