Employers Responsible For Wages For Non-Productive Employment Attributable To Social Security Card Requirement

Posted on January 13, 2012 by Kevin Lashus


Co-Author: Maggie Murphy

The DOL Administrative Review Board has decided that employers are responsible for paying wages to H-1B foreign nationals who—but for a delay in the Social Security Account enumeration and card issuance process—would be actively employed. The same rule likely will be applied to other nonimmigrant workers who experience delays in Social Security number processing.

The Board held the employer must pay the H-1B worker for her nonproductive activity during the time she was awaiting the delivery of her Social Security Card. Under 20 C.F.R. § 655.731(c)(7)(i), if the H-1B nonimmigrant is not performing work due to the employer’s requirement that she obtain a Social Security Card before commencing employment with the employer, the employer must pay the employee at the required wage for the occupation listed on the Labor Condition Application filed with the DOL. USDOL & Wirth v. University of Miami Sch. of Med., ARB Case No. 10-090, 10-093, ALJ Case No. 2009-LCA-026 (Dec. 20, 2011).

A Social Security Number is not required for employment verification (I-9) purposes, but many employers require it for payroll processing. H-1B employees are authorized to work upon lawful admission to the United States. Accordingly, to the extent that an employer requires a Social Security Number as part of payroll processing, it must be prepared to pay the employee if it elects to delay employment during the SSA enumeration process.

The DOL likely will apply this rule to other nonimmigrant categories, including the L-1, H-3, E-3, and O-1. Therefore, employers should consider practices that will allow these authorized workers to start employment while waiting for Social Security enumeration. Such practices include setting up a temporary payroll profile with a “dummy” number and updating the profile once the number is issued.

An employer that participates in E-Verify must verify its employees’ Social Security Numbers through the free federal program. Thus, such an employer needs the employee Social Security Numbers and should set a projected start date that allows enough time for Social Security processing.

Whatever the case, employers must now be mindful of payment responsibilities for foreign nationals sponsored to work for the employer in the U.S. Once the approved start date hits, so does the wage/payment requirement, requiring that employers who insist on Social Security Numbers from all employees take a more active role in tracking and advising employees how and when they should apply.
 

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SSA "No Match" Letters to Employers Make a Comeback

Posted on April 21, 2011 by Amy L. Peck

The Social Security Administration (SSA) has resumed notifying employers of social security number mismatches of employees. The No-Match or “Request for Employer Information” letter states that the information reported on an individual’s W-2 or W-2c form do not match the Agency’s records. On receiving a No-Match letter, the SSA requests the employer do the following:

• Compare the SSA information with the individual’s employment records.

• If the records match, ask the employee to check the name and Social Security number on their Social Security card.

• If the card does not show the employee’s correct name or Social Security number, or if a name change or a correction is necessary, instruct the employee to contact a Social Security Administration office to resolve the discrepancy.


• Provide written responses to several questions about the individual in question and return the completed form to the Agency (separately from any Form W-2c correction filing).

The SSA cautions the employer that the No-Match letter alone should not the basis for taking adverse action against an employee. A mismatch can be for many reasons, including typographical errors, incomplete or blank names reported, name changes, or incomplete or blank social security numbers reported. In the past, about 10 percent of all W-2s initially received by the Agency have some sort of a name-number mismatch.

Employers who receive a No-Match letter should contact legal counsel to determine whether any action is necessary. Each case is different and must be examined and analyzed individually.
 

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Social Security No-Match Rule - Back to Square One

Posted on December 23, 2009 by Sean G. Hanagan

The Social Security Administration (SSA) No-Match Rule illustrates the problem employers can face when intensive government scrutiny is combined with a lack of government guidance. This problem was further exacerbated by the Citizenship and Immigration Services’ (CIS) announcement in November of 1,000 I-9 Audits.

This issue arose in 2007, when DHS issued guidelines for employers confronting SSA “No-Match” notices. However, the SSA initiative was enjoined quickly by federal court order and never took effect. Prior to the injunction, the SSA issued “No-Match” letters to employers on an annual basis, notifying them of employees whose social security information presented to employers did not match information contained in the government’s database. In some cases, the discrepancies were acknowledged to be SSA error, others resulted from name changes of which individuals had failed to inform SSA, and some pointed to possible fraud or identity theft by the employee.
Employers were left with little guidance, however, since the No- Match letters expressly cautioned against taking “personnel action solely based on this letter.” Employee advocates warned employers of discrimination issues, arguing that affected employees should be given many months to address the issue while remaining at work.

The No-Match Rule would have required employers to take concrete steps over a defined period to address employee social security discrepancies, or risk being charged with “constructive knowledge” that their employees were undocumented. Briefly, the Rules called for employers to check their records and to ask employees to resolve any discrepancies within 90 days. It also instructed employers to reverify an employee’s work authorization with documentation not listing the questioned social security number if the discrepancy could not be resolved within that timeframe.

Despite the government’s attempt to clarify the Rule and its justification through an economic impact analysis in March 2008, the No-Match Rule eventually was withdrawn and abandoned entirely under the new Administration.

After all this, employers are back to square one. They have to determine for themselves what steps to take when No-Match issues arise. With government audits on the increase, legal counsel have been getting more requests to advise on these issues. This blog will continue to update you on this developing area of the law.

 

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