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Social Security “Mismatch Letters” Jeopardize Jobs*
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As Washington still seeks to allocate blame for the Sept. 11 terrorist attacks, one of the emerging candidates is the questionable Social Security card and the ability of undocumented immigrants to get it and use it. See, e.g., Robert Pear, Foreigners Fraudulently Get Social Security Cards, New York Times, May 20, 2002 (citing a report by the inspector general of the Social Security Administration (SSA) that 100,000 Social Security numbers (SSNs) were wrongly issued to noncitizens in 2000). Some of the Sept. 11 hijackers managed to get Social Security cards and undoubtedly used them to secure credit cards and to open bank accounts in the United States. Fraudulent Social Security cards are also a problem for the SSA. The steps that agency is taking to address the problem, as discussed below, can place some employers in a tight bind and will ultimately spell trouble both for the thousands of workers who carry Social Security cards unlawfully and for some whose cards are valid. The SSA has been worried about bogus Social Security cards for a long time, both because they affect the integrity of the Social Security system and increase its costs. Employers ordinarily have to send Part A of the W-2 (Wage and Tax Statement ) to the SSA by the end of each February so that the SSA can post the last calendar year’s earnings to an employee’s Social Security account. If the name and number don’t jibe with SSA records or that agency never issued the number, it can’t post earnings to the individual account and records it instead it records in a suspense account. These mismatches are expensive for the SSA. While it costs less than 50 cents to post information to an employee’s account routinely, transferring it there later from a suspense account costs an average of $300. From 1937 to 1999, the SSA estimates that its suspense-account postings have risen to 212 million items. To deal with this problem, the SSA has been notifying employers of these mismatches since 1993. Initially, it contacted only those employers with a high incidence of mismatches. However, it has now begun notifying employers whose reports reflect even a single mismatch. These “Code V” or mismatch letters, projected at some 750,000 this year, advise the employers to clarify the discrepancies, but to do so in ways that don’t involve practices prohibited under the “employer sanctions” provisions of U.S. immigration law. In the Immigration Reform and Control Act of 1986 (IRCA), Pub. L. No. 99-603, 100 Stat. 3359, Congress for the first time declared it to be unlawful for anyone to hire or to continue the employment of “an alien knowing the alien” is or has become unauthorized for that employment. See § 274A(a)(1), (2) of the Immigration and Nationality Act (INA), 8 U.S.C. § 274a(a)(1), (2). To give teeth to that provision, the law imposes sanctions on employers, including civil fines rising to a maximum of $11,000 for a third violation. See INA § 274A(e)(4), 8 U.S.C. § 1324a(e)(4). An employer that engages in a pattern or practice of violation is subject to injunction and criminal sanctions. See INA § 274A(f), 8 U.S.C. § 1324a(f). Also under the threat of sanction, the same law imposes a certification process on every hire, known as an “I-9 check” (after the designation of the certification form). Job candidates have to present a document (or documents) from three lists that identifies them and shows that they are authorized to work. A U.S. passport, for example, is on one list of documents acceptable as demonstrating both identity and work authorization. So is an alien registration card (“green card”). A second list, relating to documents that only show work authorization, includes a Social Security card (as long as it doesn’t bear the legend “Not Valid for Employment”). The third list relates to documents of identity, like a driver’s license. Employees must attest on the Form I-9, under penalty of perjury, that they are a U.S. citizen or lawful permanent resident or are authorized by law or the Attorney General to work. The employer must likewise certify that it has examined the document(s) presented, and that it reasonably appears on its face to be genuine and shows that the employee is not “an unauthorized alien.” Once having received the specified document(s), the employer need not ask the employee for another; doing so with discriminatory intent would violate immigration law. See INA § 274B(a)(6), 8 U.S.C. § 1324b(a)(6). Because the SSA is mindful of the concern with a possible charge of discrimination, the Code V letters recommend that the employer: (1) compare the W-2 with its employment records; (2) if the W-2 doesn’t match company records, correct the W-2 on Form W-2C; (3) if it does match, ask the employee to check her Social Security card to see if the employment records need correcting; and (4) if those records do match the card, have the employee contact an SSA office to resolve the issue and advise the employer of any changes. Code V letters are careful to say that the receipt of the letter is not itself a basis for firing the employee concerned, is not a comment on the employee’s immigration status, and should not be interpreted to mean that she is unauthorized to work in the United States. And they caution that an employer that uses the information in the letter to justify adverse action against the employee “may violate federal law and be subject to legal consequences.” Immigrant-rights organizations are sending the same message, but in stronger terms. The National Immigration Law Center (NILC) notes that some employers confuse a Code V letter with a notice of immigration violations and wrongly fire any workers listed before they have a chance to show that they are properly documented. See NILC Information Packet, Social Security Administration “No-Match” Letters, available at http://www.nilc.org. It claims that the program gives employers an incentive to turn away job applicants with “foreign sounding” names, believing they are then less likely to face the disruption of dealing with such letters. The NILC warns employers that the use of mismatch letters as a pretext for retaliating against an employee for such protected activity as union organizing or whistle-blowing can violate one or more employment statutes. The National Employment Law Project, http://www.nelp.org, has much the same to say in its “No Match” Letters: Top Ten Tips for Employers. However, some employers may be unimpressed by these caveats, as they take a different lesson from the Supreme Court’s recent decision in Hoffman Plastic Compounds, Inc. v. National Relations Board, 2002 LEXIS 2047 (Mar. 27, 2002). See Stanley Mailman & Stephen Yale-Loehr, Supreme Court Denies Backpay to Fired Undocumented Workers, New York Law Journal, Apr. 22, 2002, at 3. But just as importantly, many employers, although they wish to comply with both the spirit of the law and the implications of the mismatch letters they receive, may find themselves in a bad pickle. Unhappily, there’s no one at the Immigration and Naturalization Service (INS) that these employers can simply call to find out if the employee is work-authorized. According to the INS website, http://www.ins.gov, employers in some states can sign up for computer software to access such information. But even then they can only verify the employment eligibility of a worker hired after they entered the INS program. True, some employees confronted with a mismatch letter and asked to resolve the discrepancy between their Social Security number and the SSA records may admit that they used a phony card. Advised of the misrepresentation, the employer might then be required to re-verify the employee’s work authorization so as not to continue the employment of a worker it now has strong reason to believe was unauthorized. In any event, the earlier misrepresentation on so serious a matter would ordinarily justify a termination if the employer so desired. That would be so as a matter of conventional employment law even if the employee had earlier qualified with another document of authorization or was now otherwise authorized to work under the immigration law. But suppose an employer has done all of the re-checking recommended. What is it to do if the name and number still fail to match the SSA record, and the employee refuses or neglects to resolve that issue with the agency? Granted, the employer is under no legal obligation to respond to the no-match letter. But the pressure mounts as the employer receives follow-up letters. Most employers are reluctant to fire an employee unless they have to, and fear a charge of discrimination under one or more of the many statutes that bar discrimination for age, sex, race, religion, national origin, or citizenship status. See, e.g., INA § 274B(a), 8 U.S.C. § 1324b(a) (INA antidiscrimination provisions); 42 U.S.C. § 2000e-2 (Title VII antidiscrimination provisions); 29 U.S.C. §§ 621-624 (Age Discrimination in Employment Act). On the other hand, the employer might now be reasonably suspicious of the employee’s status and concerned about the possible consequences. For one thing, in using an incorrect SSN under these circumstances an employer might fear liability under the Internal Revenue Code, at 26 U.S.C. § 6674, for willfully failing to provide correct information on a wage statement. And SSA shares mismatch information with the Internal Revenue Service so that the IRS can decide whether to assess penalties. For another, even though IRCA’s sanctions provisions have failed in their stated purpose – stemming the flow of undocumented immigrants intent on finding a better life – they still target the employer. Given the failure to resolve the mismatch issue after a reasonable time, do the SSA letters sufficiently put the employer on notice that the employee is “an unauthorized alien with respect to such employment”? Does the basis for suspicion rise to the level of “knowing” under the immigration statute, which the INS defines as “knowledge which may fairly be inferred through notice of certain facts and circumstances”? See 8 C.F.R. § 274a.1(k). But the cited regulation also states that nothing in the definition permits the employer “to refuse to honor documents tendered that on their face reasonably appear to be genuine and to relate to the individual.”) Consider too that an employer who has in good faith complied with the I-9 requirements has an affirmative defense to a “knowing” charge, although it is rebuttable. See 8 C.F.R. § 274a.4. As it happens, there seems to be no reported finding of a “knowing” violation based solely on SSA mismatch letter. In a comprehensive letter of April 12, 1999, the INS General Counsel conceded that there had to be something in addition to a mismatch letter (like a tip from another employee) to lead to a “knowing” violation. See letter of Paul W. Virtue, then INS General Counsel to [recipient omitted], File No. HQCOU 90/10.15-C, posted as InfoNet Doc. No. 01061431 at http://www.aila.org/infonet. But the letter goes on to say: [I]f an employee has been given an opportunity for wage reporting purposes to explain and reconcile a reported discrepancy with SSA records and has failed to do so satisfactorily, that is an entirely different situation from an initial SSA notice standing alone. The INS would be much more likely at that point to consider that employer to have violated section 274A if it continues the employment without taking appropriate steps to reverify work authorization, and if the employee is in fact unauthorized. Counterintuitively, the letter suggests that an employer willing to chance the IRS penalty might avoid the immigration violation by simply not asking the employee to resolve the discrepancy. How much weight to give the General Counsel’s letter, however, is hard to say. . From the file number we see that the letter is coded “C” for correspondence rather than “P” for policy. In any event, the trouble with relying on INS letters or memos, even an opinion of the INS General Counsel, is that the INS does not consider itself bound by them. See Matter of Izumii, Interim Decision No. 3360, 22 I. & N. Dec. __ (INS Assoc. Comm’r, Exam. July 13, 1998) (declining to approve a petition of the kind the Service had earlier routinely approved and stating that the Service was not bound to follow an opinion of the Office of General Counsel). So what is an employer to think? At least in the past, INS enforcement was almost always preceded by a notice explicitly advising the employer that the worker is “an unauthorized alien,” and giving it time to terminate the employment. Now, with newspaper articles on how Social Security cards, whether counterfeit or come by illegally, help terrorists build a false identity, SSA mismatches seem sinister, and careful employers understandably fear harsher enforcement. No wonder then the concern in industry and immigrant-activist circles that the SSA effort to correct its files may put thousands of undocumented immigrants out of work. See, e.g., Oscar Avila & Stephen Franklin, Social Security Notices Put Jobs in Jeopardy, Chicago Tribune, Online Edition, http://www.chicagotribune.com, June 6, 2002. ** Stanley Mailman and Stephen Yale-Loehr are co-authors of Immigration Law and Procedure, published by Matthew Bender and Company, Inc. Mr. Mailman (smailman@ssbb.com) is of counsel to Satterlee Stephens Burke & Burke in New York City. Mr. Yale-Loehr is of counsel at Miller Mayer (http://www.millermayer.com/) in Ithaca, New York, and teaches immigration law at Cornell Law School. He can be reached at syl@millermayer.com.
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