Identity theft is among the nation's fastest-growing crimes, and your personnel files and other HR data can be gold mines for would-be thieves. Getting a Social Security number (SSN), in particular, opens a world of opportunities for criminals, and your company could wind up sharing the blame if employees' personal data get into the wrong hands.
That's why it's wise to alter your methods of tracking personnel data. If you don't, the government may soon do it for you.
Latest example: California employers are scrambling to comply with a strict new law that sharply limits the use of SSNs. The law, which went into effect July 1 and phases in over three years, says companies in that state generally cannot:
- Post SSNs or print them on ID cards or badges.
- Print SSNs on anything mailed to a customer unless law requires it or the document is a form or application.
- Require people to transmit an SSN over the Internet unless the connection is secure or the number is encrypted.
The law doesn't apply if a state or federal law requires an SSN on a document, such as tax forms or certain payroll records. But for a host of other HR-related data, many companies are applying the new rules across the board. One reason: It may only be a matter of time before other states follow suit. Several currently have SSN-restriction bills pending.
SSN use declines during '90s
In recent years, there's been a clear trend away from using these unique nine-digit numbers to identify workers in HR records.
In 1994, nearly three-quarters of companies used SSNs as employee identifiers, but that dropped to 66 percent in 1996 and again to 48 percent in 1999, according to a member poll by the International Association for Human Resource Information Manage- ment (IHRIM). Today, the number of employers who haven't converted to a different identifier is an even smaller minority, the group estimates.
Options for new identifiers
How employers structure new HR identifiers varies, but it's mainly driven by company size, employee turnover rate, company growth and the need for specific coding within the number field. For example, using a five-digit number would ensure enough numbers for 99,999 employees.
But experts say the best way to move away from SSNs is with a randomly assigned set of numbers with the fewest digits necessary. Start with 1000, rather than 0001, to avoid shortened numbers showing up when you move records into different formats or computer data fields.
Assign numbers at random, not sequentially, to take anonymity one step further. Last, keep it simple to avoid data entry errors.
4 practical safeguards
Legally savvy policies and practices can go a long way toward protecting your employees and your company. Employment attorneys suggest the following:
- Keep employee information under lock and key. Limit access to personnel files, whether they're on paper or online. Create strong passwords and data security.
- Don't display SSNs where other people can easily view them, such as on badges, timecards, parking permits or in-house lists distributed to employees. Use truncated, en-crypted numbers or invisible fonts for SSNs if you can, even on required documents.
- Require of employees who will have access to personnel data. Have them sign a confidentiality agreement.
- Draft a policy that instructs HR, benefits and payroll administrators to shred any discarded employee documents that may include forms of identification.
Get more information on privacy issues and HR by visiting the Web site of IHRIM's new privacy group at www.privacy-security-sig.org.
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