New York Law Further Limits Use of Social Security Numbers

On December 12, 2012, amendments to New York’s General Business Law took effect that strengthens protections against the collection and use of employee Social Security numbers. With certain exceptions, the new law prohibits employers from requiring that employees disclose their Social Security number, either in full or in part, and from refusing any service or privilege to employees for nondisclosure of the numbers. The statute specifies certain exceptions, such as if a law expressly requires the collection of Social Security numbers, if the Social Security number is to be used for an internal verification or fraud investigation, or if a Social Security number is requested for a consumer report. The law also provides two important exceptions: (1) it permits the use of Social Security numbers if an employee “consents”; and (2) it allows collection of Social Security numbers for “purposes of employment,” including the administration of a claim for benefits, termination, retirement, work-related injury, or an unemployment insurance claim. While these exceptions may seem broad at first glance, it is important to note that that the examples provided for the “purposes of employment” exception deal with current employment only and do not address the use of Social Security numbers in the application process. As such, unless another exception applies, employers typically should not request Social Security numbers in applications for employment until the courts clarify this new law. Further, the law does not define “consent” and therefore employers should review their employment practices to avoid any unnecessary use of Social Security numbers, even with an employee’s express consent.

Note: This article was published in the December 2012 issue of the New York eAuthority.