In a continuing attempt to address the problems of identity theft and increase consumer protection, California recently passed another law, SB 168. It becomes effective July 1, 2002. The law relates to employers use of Social Security Numbers. In simplest terms, it limits the posting of SSN’s for several purposes. The net effect on employment screening procedures is that any reports we do for you on California residents will not include the posting of the SSN on the report. This has no effect on how we conduct our searches or the results we obtain. It merely allows us to comply with the law.

If you have any questions, please call us or e-mail us. We’re always happy to help in any way we can. If you wish to view a complete copy of the new law, you may visit the client section of our web site at www.employscreen.com. In the "Downloadable Forms and Files" section we have placed a PDF version of the entire law.

The following is a detailed analysis of the law:

The provision that will most affect employers is Title 1.81.1, "Confidentiality of Social Security Numbers." This section of the law prohibits employers from using a person’s Social Security Number under a wide variety of circumstances. In general, employers will be prohibited from:

• Publicly posting or displaying an individual’s Social Security Number;
• Printing an individual’s Social Security Number on any card required to access products or services;
• Requiring an individual to transmit his or her Social Security Number over the Internet unless the connection is secure or the number is encrypted;
• Requiring an individual to use his or her Social Security Number to access an Internet Web site unless a password or unique personal identification number is also required to access the Web site;
• Printing an individual’s Social Security Number on any materials that are mailed to the individual, unless state or federal law requires the number to be on the document to be mailed.

There is an exception under the Grandfather Clause or "safe harbor" provision. An employer may continue its use of an employee’s Social Security Number if all of the following conditions are met:

• The Social Security Number has been continuously used by the employer (if the use is stopped for any reason, the prohibitions will apply);
• Commencing in 2002, the individual is provided with an annual disclosure informing the individual of his or her right to request their Social Security Number not be used in a manner prohibited by Senate Bill 168;
• Upon receipt of such a written request by an individual, the employer will cease using the Social Security Number within 30 days;
• No services may be denied an individual on the basis of a request to cease using the individual’s Social Security Number as prohibited by Bill 168;
• However, this exception will not apply to new employees hired after July 1, 2002.

In addition to the grandfather clause there are several exceptions that exist to this coverage. This law does not affect the collection, use, or release of a Social Security Number as required by state or federal law. Employers will still be required under California Labor Code section 226(a)(7) to place Social Security Numbers on paycheck stubs. In addition, it would not apply to certain IRS reporting forms that also require the use of a Social Security Number.

In addition, SB 168 would not apply to the use of Social Security Numbers for internal purposes provided the forms are kept in personnel files and proper precautions to ensure their information is not disclosed to the public and is limited only to authorized employees. It would also not effect records that are required to be open to the public pursuant to specified state laws.

Although this bill prohibits the use of Social Security Numbers in mailings to the individuals, it excludes the use of Social Security Numbers contained on applications and forms. The definition of "applications" and "forms" are not clear. However, most dictionaries typically define "forms" as documents with blank spaces for insertion of information. If the document you mail to an employee does not resemble the generally accepted definition of "forms," you may be wise to deliver the document to the employee at work. Therefore, applicants can mail applications to employers with their Social Security Number on it.

So what does this mean for you? It is our recommendation that your legal counsel review your current policies to make sure you are in compliance. Some specific places to look for non-compliance would be:

• Mailing policies to employees of personal information
• Intranet and Internet access to employee benefits
• California Investigative Reporting Act Notification Letters and Reports (if you do not use the letters and reports supplied by ESS)

The preceding article is for informational purposes only. ESS does not provide legal advice. As always, we recommend you consult your legal counsel for proper direction in handling the subject.