New York Increases Protection of Employee Social Security Numbers

[author: Beth P. Zoller, XpertHR Legal Editor]

With two recent amendments to the Social Security Number Protection Law, employers in New York may want to review and revise their workplace policies and practices. +NY CLS Gen Bus § 399-ddd. The law builds on the protections provided by the existing law and aims to provide employees with even greater privacy protections. +NY CLS Gen Bus § 399-dd.

The first amendment prohibits employers from hiring inmates for any position that will provide them with access to social security numbers. The second amendment will prevent employers from requesting or requiring that employees or applicants disclose their social security numbers or denying an employee access to services, privileges or rights based on his or her refusal to provide a social security number.

However, the law contains some notable exceptions. Among the exceptions, the law does not apply if the social security number is:

Required by law;
Sufficiently encrypted by the employer;
Needed by the employer for internal verification or fraud investigation;
Requested in connection with a request for credit or a credit transaction initiated by the consumer or in connection with a lawful request for a consumer report or investigative consumer report; or
Requested in connection with a deposit account or an investment or for the purposes of tax compliance.

There also is an exception if the employee consents to providing his or her social security number to an employer or a prospective employer.

Employers will be subject to a fine of $500 for a first violation and $1000 for additional violations. There is no private cause of action and only the attorney general has the power to bring suit for violations. +NY CLS Gen Bus § 399-ddd.

Governor Andrew Cuomo signed the law on August 14, 2012. The first amendment takes effect on November 12, 2012. The second amendment takes effect on December 12, 2012.

Based on these recent amendments as well as the existing law, in order to protect the confidentiality of employee social security numbers employers may want to:

Implement a workplace policy and practice protecting employee social security numbers and other personal and confidential information;
Designate a limited number of employees to handle social security numbers and personal information;
Train employees handling such personal information on confidentiality and privacy precautions;
Specify handling and disposal procedures for documents containing social security numbers and other confidential and personal information;
Encourage employees to report when there is a breach of security and personal information and social security numbers are compromised;
Avoid requesting or using social security numbers if possible.