After a seven-year hiatus and numerous warnings to prepare via “Educational Correspondences“, the Social Security Administration (SSA) is again notifying employers when W-2 records don’t match Social Security Numbers.
As with any government notice, receiving a mismatch letter, or “employer correction request notice,” can be pretty nerve-wracking. So what should you do if you receive one of these notices?
“Help! I got a notice–What now?”
1. Read the letter. (All of it!)
According to Maria Douglas, Customer Service Manager at Southland Data Processing, the first step is to thoroughly read the letter.
You’d be amazed at how many people don’t even read these! Further, you’d be amazed how much more at ease so many people would feel if they did actually read these notices.
Even though the letter itself does not identify which employees have unmatched SSNs, it does provide a fair amount of other information. For example, the number of unmatched employees, and instructions for next steps.
Further, the letter explicitly states that it “does not imply that you or your employee intentionally gave the government wrong information.” (No one’s pointing fingers here!) Instead, the letter explains that the SSA understands there are a number of reasons why reported names and SSNs may not agree with the SSA’s records.
Douglas cautions, “The most important thing employers should know is they should not fire their employees or take any adverse action just because their SSN does not match the SSA’s records. Doing so could actually end up raising an unemployment claim by the employee(s) or even violate State or Federal law (subjecting you to legal consequences).”
2. Register for Business Services Online (BSO)
Business Services Online (BSO) is the Social Security Administration’s online employer portal. Once registered, you can view the mismatched names and SSNs in the Employer Report Status section.
3. Check for Clerical Errors
What’s the most common reason for an unmatched Social Security Number? A typo! Before anything else, check the unmatched SSNs against your copies of I-9 employment eligibility and identity documents. (Now’s also a great time to audit your employee filing and recordkeeping procedures!)
Make sure these match and that you don’t have any dummy SSNs on file. (You’d be surprised how many times we see employers put in 000-00-0000 when they hire an employee and never update it with the actual social!)
After reviewing your data, if you come to the conclusion that the error is not just a simple data entry mistake, we offer HR support that can help guide you through the next steps.
We get it, sometimes there’s just too much on our plates to add another big project. And sometimes we just want that added level of security. Let us know if you’d like to schedule a call with our Director of Compliance Brett Strauss, Esq. for more hands-on guidance with these notices!
4. Notify the Employee of the Mismatch
Alternatively, you can follow up with your mismatched employees yourself. To start, inform each unmatched employee in writing of the mismatch (you can find the SSA’s sample letter here). Give the employee a reasonable period of time to resolve the mismatch (generally 30-90 days).
If the employee doesn’t respond within 60 days (time frame provided by the SSA), tell the Social Security Administration that. Douglas warns, “If you do have an employee who is engaged in identity fraud, be prepared that they might not come back after receiving your letter.”
Oftentimes, individuals in these situations will “disappear” once they realize they have been caught. Other times, they may admit to providing fraudulent information. In that case, you may take action based on your onboarding honesty policy (if any).
Top Tip: Looking to add a policy like this to your handbook? Let us know and we’d be happy to help!
5. Make the Corrections
To correct these errors, you will need to file a W-2 correction (Form W-2C). You can either file this yourself from your BSO portal or request for SDP to file the correction(s) on your behalf per our standard amendment process.
In addition to filing the W-2 correction, Southland Data Processing will also need to file the amendment on your wage report return for each quarter that an employee’s information was submitted incorrectly.
If you have any employee name and/or SSN changes to be made, please send us an email at [email protected]!
6. Avoid Future Errors
In addition to adding an onboarding honesty policy to your employee handbook, there are a few other things you can do to avoid running into social security mismatches in the future.
First, all businesses have access to free Social Security Number Verification Services (SSNVS) through BSO. This service allows you to verify employees’ names and SSNs in advance of filing W-2 Forms. Add this step to your hiring process to make sure your data is accurate from the get-go.
Second, create a process to regularly update employee information. We recommend having employees verify their name, address, and SSN at least once a quarter!
Finally, always review your W-2 Edit Report. Southland Data Processing sends this document out annually (usually in October) before we begin processing W-2 Forms. (Don’t forget–the SSA used W-2s to flag companies for these notices in the first place!) Carefully review this document each year and let us know immediately if any changes need to be made.
Resources
More questions? Check out the Social Security Administration’s FAQ for more information. Although Southland Data Processing cannot access your BSO account and make these corrections for you, please let us know of any W-2Cs or amendments you would like us to file on your behalf by emailing us at [email protected].
And don’t forget to follow us on Facebook, Twitter, and LinkedIn for even more business tips and tricks to make sure you never miss a beat!
Photo by Anthony Shkraba from Pexels