Reporting employee earnings to the Social Security Administration (SSA) requires providing each employee’s full name and Social Security number. That information is checked against employee tax records and other data for accuracy. Should discrepancies be found, the SSA usually follows up with an Employer Correction Request (EDCOR) letter. What should your company do upon receipt of such a letter?
The SSA announced this past March (2019) their intention to begin sending out letters for 2019. If you’re unfamiliar with the whole EDCOR thing, you may be tempted to panic after receiving one. That’s the last thing you should do, explains BenefitMall. The experts at BenefitMall explain that discrepancies aren’t a big deal. Just follow the instructions to correct them and everything will be fine.
Why the Letters Are Sent
The SSA is tasked with keeping track of employee earnings to know how much a taxpayer is entitled to receive in Social Security benefits upon retirement. They need employee names and taxpayer numbers to ensure that each taxpayer’s record of earnings is accurate.
Comparing the information they receive against IRS records and other documents is a way to guarantee accuracy and prevent fraud. In light of that, most of the discrepancies that come to the SSA’s attention are either typographical errors or the result of incorrect information being given to the employer. But if a given discrepancy is intentional fraud, the SSA needs to know that as well.
They send EDCOR letters to give employers an opportunity to correct discrepancies. In most cases, correction is a fairly simple matter. The employer logs in to the SSA website using the link provided in the letter, then follows the on-screen instructions.
Note that letters are sent if at least one name or Social Security number does not match current SSA records. You could have a company with 100 employees and receive an EDCOR letter simply because one employee’s name was spelled incorrectly. Receiving such a letter doesn’t mean your company is under investigation or in legal jeopardy.
Disregard the ‘No Further Action’ Statement
The SSA usually doesn’t go out of its way to make it known they are sending out EDCOR letters. They made a big deal of it in 2019 because their website presents inaccurate information. According to the SSA, logging on to the Business Services Online (BSO) website displays a list of all of the errors that generated an EDCOR letter.
At the bottom of the page is a rather prominent notice saying that the errors are informational only and do not require any further action by the employer. According to the SSA, that notice is inaccurate. They are advising employers to disregard it. Instead, they should click on the description link for each listed error and furnish the correct information.
It Must Be Done Online
Employers should also be aware that making corrections to employee information following the receipt of an EDCOR letter can only be done online. Employers without BSO accounts need to register for one immediately.
If errors involve employee Social Security numbers, employers are urged to use the SSA’s online Social Security Number Verification Service. If the online tool does not resolve the problem, employers can always go directly to affected employees and ask them to provide their Social Security numbers again. They cannot force employers to produce Social Security cards.
If your company receives an EDCOR letter from the SSA, don’t panic. Just login to their website and fix the errors. As long as the errors are the result of an honest mistake, correction is fast and easy.
