Use of a Social Security Number by an Employer

Based upon some questions I have been getting and some things I have been reading there is some confusion around the use of a social security number by an employer. Due to identity theft issues people are hesitant to provide their social security number and in turn employers need to be careful when and how that number is obtained. You should never ask for a social security number on an employment application. These forms are too easily lost or misfiled or can be taken thus putting peoples’ identities in danger.
So when can you ask for a social security number? There are actually no federal laws that prohibit you from asking for the number. Immigration law does prohibit you from asking for it as one of the required forms of ID on the I-9. However, if you use E-verify you must have the number to input into the system. So in that case you can ask for it. Of course we all know that social security numbers are needed for tax forms and tax identification, so at that point you are going to need the employee’s social securty number as well.
If you have ever had an applicant’s background check done you know that the agencies that conduct these checks also need to have a social security number. Most credit and criminal checks make use of a social securty number. But if you ask an applicant for their social security number what happens to that information if the person does not come to work for you? How do you safeguard that information to avoid identity theft. That is why the folks at Personnel Policy Services, Inc., in their HR Matters E-Tips newsletter, recommend that you do not ask for a social security number or conduct a background check until after you have made the person an employment offer. As they say “…legal experts suggest that an employer should not request an applicant’s SSN until after an offer is made and there is a job-related reason for asking.”
This is pretty sound advice, however, doing so requires you to understand and abide by the very strict rules of the Fair Credit Reporting Act. (See Background Checks: Why the FCRA Basics Are Important and Background Checks and the Fair Credit Reporting Act.) The reason you need to understand these rules, and abide by them, is that having made the applicant a job offer and then conducting a background check, you have lost any leeway you have in the reason for which you may now reject them. If you discover something in the background check that makes you change your mind and recind the offer it is obvious that it was something in the background check. You have to issue to them a pre-adverse action letter, give them an opportunity to rebut the information and then follow with a final action letter. Gone is your ability to say “We found a better candidate.” So, while waiting to check a background check post-offer is sound advice from an information safeguard standpoint, it does put an additional burden on you of dealing with the FCRA.
So what is the solution to this dilemma? The easiest solution is just not having employees. That takes care of alot of problems. However, generally that is not too practical for most companies. So the next best thing is to do what the legal experts suggest. Do your extensive background check post offer and be very up to date and well versed in your knowledge of the FCRA.

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