TN 10 (10-94)

RM 03870.001 Earnings Records Inaccuracies Development - General

A. POLICY

SSA is responsible for establishing and maintaining accurate and complete earnings records (ER); i.e., for establishing and maintaining the amount of wages paid and the amount of SEI derived.

B. DEFINITIONS

1. Annual Wage Reporting (AWR)

Annual Wage Reporting (AWR) is the annual process where employers submit wage reports showing the wages paid to each employee during the previous year. SSA validates the names and SSNs on the employers report and checks to see that other data is valid as well.

2. Master Earnings File (MEF)

The MEF is SSA's main electronic earnings information for an individual worker. This file stores the earnings history for each NH by SSN.

3. Suspense

The Suspense File is a record of all FICA earnings and SEI items reported to SSA during AWR where the name and SSN were either incorrect or missing and could not validate.

4. Reconciliation

SSA electronically sends to IRS a record of the total wages processed for each employer each year. IRS compares these figures to their own records and, if the IRS records show that the employer submitted more earnings than SSA processed, the reconciliation process corresponds with the employer to receive the missing earnings, i.e., to reconcile the difference and post the missing earnings to the MEF.

5. Employer Identification Number (EIN)

The EIN is a 9 digit number assigned by IRS to employers (or by SSA to State and local employers prior to 1987) for use on their wage reports. The first two digits are generally followed by a dash. (RS 01403.041G.)

6. Item Correction (IC)

Item Correction (IC) is the Earnings Modernization System which permits SSA personnel (FO, OCRO, PSC, and in some instances TSC) to electronically correct an individual'sMEF. The IC system involves numerous SSA processes which allow the action needed to control, develop and correct an individual's MEF to be taken. (MSOM EM 010.001 - MSOM EM 031.001)

7. GAP

A gap is the total absence of a posting for a reporting period (quarter, except for agriculture wages before 1978; annual for 1978 on) within an individual's work history. A gap may be a single absence between postings or multiple successive absences of postings.

NOTE: Annual reporting began for Puerto Rico, American Samoa, Guam, and Virgin Island in 1979; for State and local employers in 1981.)

8. Incomplete Posting

An incomplete posting is a posting that does not reflect the total wages paid to the employee by the employer for a reporting period.

EXAMPLE: An employee worked for 9 months in 1992 for the ABC Company with total earnings of $12,000. The Company reported 1992 earnings for the NH of $7500.

9. Duplicate Posting

A duplicate posting is one that matches exactly another posting (i.e., same amout of Social Security wages, same employer, same Employer Identification Number (EIN), same reporting period, same Earnings Control Number (ECN), etc.).

10. Erroneous Posting

An erroneous posting is:

  • A posting to a particular time period that represents wages paid in another time period; or

  • A posting of wages where the amount is more than actually paid to the employee; or;

  • A posting that matches exactly the amount posted with another posting but does not match exactly another characteristic(s).

11. Scrambled Earnings

Scrambled earnings are wages or SEI belonging to one individual but posted to another individual's SSN.

12. Statute of Limitations

The Statute of Limitations refers to the legal requirement governing when an earnings record may be corrected. (RS 02201.000ff.)

13. Employer Control Data Base and Employer Report Query

A reference list which is maintained by OCRO for employers who have submitted annual wage reports for a particular year. The file contains filing data for employer reports and is updated regularly to indicate the current report status. The Employer Report Query (ERQY) is in EIN order and identifies such items as the reporting period, establishment number, type of employment, number of employees and the actual reporting problem such as missing or impossible EIN, duplicate report, multiple FICA entries, etc.

14. No Report (NR)

SSA has no record that the employer's wage report was filed for the period in question.

15. Employee Omitted (EO)

SSA records show the employee was omitted from the employer's wage report for the period involved.

16. Feedback

Feedback is a process used where OCRO checks its 1086 microfilm files for an earnings detail of a NH between the period 1937 through 1977. “Feedback” identifies the posting from each employer for each quarter. If the earnings in question are located during the Feedback process, OCRO will post the earnings to the MEF.

17. Scouting

Scouting is a process in which OCRO searches online sources and microfilm reports for a specific period. OCRO will verify whether a report was filed by checking the 941 file for years prior to 1978 or the W2/W3 file for years after 1977.

NOTE: The procedure for storing employer reports on microfilm was discontinued in 1978 with AWR when SSA began posting all earnings details to the MEF.

CAUTION: Scouting and “Feedback” are different actions requiring OCRO to check different records. Prior to IC, the field did not need to differentiate between scouting and feedback. With IC, care must be taken to request either “feedback” or “scouting,” as appropriate.

18. Earnings Detail

An earnings detail is a set of data with information about a particular earnings item. Such information as the amount of earnings, the year of earnings, the name of the person for whom the earning were reported, the employer identification number, etc. are all contained in an earnings detail. See MSOM EM 019.002 for a complete expanation of an earnings detail.

C. BACKGROUND

1. How ER Error Occurs

An error on the ER may result from:

  • Failure of employers or self-employed individuals to file the required reports with SSA and IRS; or

  • Errors in reports filed by employers and/or self-employed individuals; i.e., incorrect or missing SSN's, incorrect entries or omissions of dollar amounts; or

  • Errors in transcribing reports from employers and self-employed individuals.

2. How ER Error Identified

SSA becomes aware of an error on an individual's ER when:

  • An individual recognizes an error in the amount of earnings posted to his or her ER upon receipt of a Personal Earnings and Benefit Estimate Statement (PEBES) or other earnings display statement.

  • A duplicate SSN card is requested and it becomes apparent that the individual has been using a wrong SSN, or that SSA erroneously assigned two individuals the same SSN.

  • IRS notifies the NH that someone else has been using the same SSN, or advises the NH that the NH owes additional taxes to IRS due to unreported earnings.

  • OCRO (or any office with Item Correction capabilities) discovers that improper name cross-references were entered on an ER, resulting in the posting of 2 workers' earnings to the same SSN.

  • While developing and resolving an earnings issue for one NH, it is determined that a number of employees for the same employer were not reported or were improperly reported.

3. Time Requirement for Correcting ER

After receipt of the NH's initial inquiry questioning his/her earnings, SSA must provide a determination to the NH within a reasonable time, but no later than 3 years, 3 months after the filing of the SSA-7008 or equivalent request for correction of the ER.

This time period may be extended to 3 years, 3 months, and 15 days, only if additional evidence is being developed. The above limit was established as the result of the Rivera vs. Heckler Michigan District court decision.

The NH's initial inquiry may be the receipt of an SSA-7008 or similar statement, or phone inquiry. In IC, enter the information about the NH whose ER is being investigated for possible inaccuracies on the Number Holder Identification (EIDN) screen. (MSOM EM 011.002)


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0103870001
RM 03870.001 - Earnings Records Inaccuracies Development - General - 10/01/1998
Batch run: 01/27/2009
Rev:10/01/1998