Social Security Mismatch

Geoffrey S. Tobias
410-347-7339
gstobias@ober.com

How does your organization deal with those unwelcome letters from the Social Security Administration (SSA), known as "mismatch letters?" Mismatch letters result when the name of an employee does not correspond with the reported social security number on a W-4. Because employers submitting inaccurate information to the SSA are subject to fine by the Internal Revenue Service, mismatch letters should be taken seriously. Employers are protected from being fined if they can show that the information provided to the SSA was based upon a duly executed W-4 and that "due diligence" was exercised when the employer attempted to obtain correct information upon receipt of the mismatch letter. Therefore, all nonprofits should have a policy in place for dealing with mismatch letters.

If the mismatch was not a clerical error, contact the employee in writing explaining the problem and recommending that the employee contact the SSA directly by a specific date. If the employee fails to provide a satisfactory explanation for the discrepancy, you may have to cease the employment pending receipt of valid information.

Do not assume that the employee is an illegal immigrant or demand that a Social Security card be produced. If the employee is an illegal immigrant, terminate employment immediately. If the employee was illegal at the time of hire, but is now legal, you may terminate employment if you have a uniform policy of termination upon discovery of fraud in the hiring process. During the hiring process, you may demand that the employee produce a valid Social Security number as a condition of employment. However, make clear that this information is for SSA and IRS requirements only.