Illegal Aliens Vesting for Pension

Dana

As a company we received a letter from the IRS stating that employee names did not match the social security number (our HR department at the time did not verify SS# with names upon hire). After researching each employee it was discovered that we had social security cards on file for all the employees, yet these were falsified documents. After having a meeting with the employees all were given 5 days to provide REAL documentation or they would be terminated. All employees were terminated.

Two months later, 3 employees come back and provide a New social security card with a New name. Our HR department verified the new information and the employees were hired back. My issue is the HR department is not counting their previous time employed towards vesting for our Retirement Plan because they now have a different name and social security number. I feel this is incorrect due to the fact that our plan document states if you work for the company 1000 hours in any given year. You will be vested after 3 years of employment.

Has anyone come accross this? If so, how was it handled? Thanks in advance for any responses!

HRMaiden

We have come across this too. Even though we check all names and social security numbers it still comes to our attention (usually through child support when an employee finds out he has to pay for a child that is not his) that our employee is using a false identity. We have hired these employees back when they present a new identity as long as their name and social security number matches. We treat this person as a new hire for all purposes. He receives starting pay, he has to requalify for benefits and he starts all over with his vesting in our retirement plan.

Don D

I agree with 'maiden'. It seems to me that since the retirement plan falls under IRS regulations and legal employment and participation in the plan require certain things like correct ID and legal SSN and right to work, then the person who was fraudulently employed and therefore fraudulently participating forfeits his time in both. Therefore he would 'start over' if rehired, BUT, I would not rehire anybody who came to work here under false pretenses in the past, period. Things never get that tough as far as finding labor. If a person will defraud you in one instance, they will certainly do it in another.

Dana

I would of not rehired them either, but I am the Payroll Manager, not the HR person. I handed this one to an Attorney to make sure we are not crossing any lines with Immigration Act.

Don D

I handed this one to an Attorney to make sure we are
>not crossing any lines with Immigration Act.

The rights afforded and protected under the immigration act end precisely at the moment one falsifies documents and defrauds the employer, and by extension, the government.

DiDi

Hi, Dana -
I'm asking you this question since you're a payroll person: do you recall, once your company found out that an employee had a false social security number and terminated their employment, how did you handle the withholding on the final paycheck? We just found out a new employee provided a falsified Soc. Sec. Card. She hasn't received a paycheck yet, so her final check will be the first time (and last) she gets paid. We're not sure how to pay her - with or without social security tax withheld. Any advice?
Thanks,
DiDi