Accuchex Blog

Labor Laws, California Employers And Social Security Numbers

Posted by Tristan Ruhland on Oct 6, 2015 12:33:32 PM

labor-laws-california-employers-and-social-security-numbersIn order to stay in compliance with labor laws, California employers must stay up-to-date and informed. Among the many issues that must be monitored and complied with are Social Security numbers and new hires. Along with the state and federal requirements for Social Security numbers (SSNs), there is the increasingly common instances of fraud and identity theft involving these numbers.

It has been determined that a significant portion of stolen SSNs are sold to individuals looking to apply for jobs who are ineligible. This is typically common for undocumented or illegal aliens desiring to find legitimate employment. However, another key issue many employers face with SSNs arises when they are hiring H-2A visa employees, or H-1B visa workers.

Labor Laws California: Agriculture, Silicon Valley and Social Security

California, like many other states, has an abundance of employment needs in the agricultural realm. This routinely and seasonally requires employers to look to foreign workers to supplement the available domestic labor pool at certain times each year. For this reason, the federal government created a visa status known as H-2A.

The H-2A temporary agricultural program was established as a means for agricultural employers who anticipate a shortage of domestic workers to hire non-immigrant foreign workers in the U.S. to perform "agricultural labor or services of a temporary or seasonal nature."

The better known scenario is the H-1B worker. In 2013, according to statistics from the Brookings Institute, San Jose, California ranked number three in the nation with the most H-1B workers. In addition, San Francisco and Los Angeles were running slightly behind with the sixth and seventh highest numbers in the nation. In that year, California boasted the greatest percentage of H-1B workers overall.

What About Social Security and Hiring Requirements? 

A number of questions can come up when HR and payroll professionals are processing the hiring of foreign workers. Chief among these is how to properly handle the built-in requirement of many payroll programs for a Social Security number. It is not uncommon for these legitimate new hires to begin the on-boarding process without having been assigned a SSN. This happens because of delays within the Social Security Administration (SSA) or the Department of Homeland Security (DHS).

According to the SSA website:

When foreign workers apply for Social Security numbers, Social Security verifies their documents directly with the Department of Homeland Security (DHS). Most applications are verified immediately, but there can be delays. Social Security understands that this process may affect companies who hire foreign workers, but direct verification from DHS is vital to ensuring the integrity of the Social Security number.

For some employers, their payroll system requires a legitimate SSN to be entered in order to continue processing subsequent new hire reporting requirements. For some programs, entering a "place holder", or dummy number is possible. Many professionals recommend using a numbering convention of all zeros, e.g. 000-00-0000.

While this can move the process of completing initial paperwork forward, if the employee still does not have a valid and legitimate SSN before you have to file your Quarterly Federal Tax Return and Form 941. Another possible issue with using the Zero numbering convention is when there is more than one new hire without an SSN.

Many payroll programs will not allow duplicate numbers to be used, so implementing a series such as "000-00-0001, 000-00-0002" and so forth, can function as a temporary work-around. Once the actual new SSNs are actually assigned it's critical to update and re-enter that key information as soon as possible. According to the SSA, file Form W-2c (Corrected Wage and Tax Statement), to show the worker's number.  

Documentation is Key

As is the case with all issues surrounding labor laws, California employers and their HR staff should always maintain complete and current documentation. If you find that your H-2A or H-1B new hire has applied for, but not received, their Social Security number, you should get the following information as complete as possible:

  • Worker's full name
  • Address
  • Date of birth
  • Place of birth
  • Father's full name
  • Mother's full maiden name
  • Gender
  • Date of the Social Security number application

Getting Professional Help for Your HR and Payroll Functions

It is critical to keep your company safe and your management team informed and in compliance.

Company policies reinforce and clarify the standards expected of employees and help employers manage staff more effectively by defining acceptable and unacceptable behavior in the workplace. And an HR policy manual that is comprehensive and up-to-date will provide the documentation for businesses faced with possible litigation arising from employee disputes.

If you have questions regarding this, or other HR issues and practices, let us help you in managing your HR needs, payroll processes, and staying on top of compliance demands. Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.

Free Download: Payroll Outsourcing Guide


Topics: payroll tax filing, HR compliance, labor law compliance, social security number

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