A New York law signed by Governor Andrew Cuomo in August 2012 that amended the state’s 2008 Social Security Number Protection Law has caused some concern for New York employers conducting background checks. However, a review of the law demonstrates that when it comes to background checks conducted under the federal Fair Credit Reporting Act (FCRA) and state law, the law does not impede an employer’s ability to utilize a Social Security number (SSN).
The purpose of the laws was to strengthen consumer privacy and protect against unauthorized disclosure of Social Security number. The amendment prohibits a person, firm, partnership, or other business entity from requiring individuals to disclose or furnish SSNs for any purpose, or to refuse any service, privilege, or right to individuals who do not disclose or furnish SSNs. The amendment also includes several exceptions which allow employers to request an individual’s SSN, including when conducting a criminal background check as permitted by law where the individual consents to use of his or her SSN. For the full text of the law, visit: New York General Business § 399-ddd. Disclosure of social security number.
The exemption for background checks fall into different New York and federal laws. Under New York State – General Business Laws Section 399-ddd, concerning the confidentiality of a social security number, the law states that:
- 3. This section does not prevent the collection, use, or release of a social security account number as required by state or federal law, the use of a social security account number for internal verification, fraud investigation or administrative purposes or for any business function specifically authorized by 15 U.S.C. 6802.
15 USC § 6802 in turn refers to a section of the United States Code, where federal law is found, which in turn references the federal Fair Credit Reporting Act (FCRA) which allows background check with the consent of the consumer.
In addition, the New York law specifically provides the following exceptions:
- § 399-ddd. Disclosure of social security number 3. The provisions of this section shall not apply in the following instances: (a) The individual consents to the acquisition or use of his or her social security account number. (d) The social security account number is to be used for any business function permitted or allowed under the Gramm Leach Bliley Act, P.L. 106-102 (1999).
Since background checks must be done with the applicant’s consent, the New York law by its very terms permits the use of the social security number in background screening. In addition, the reference to the Gramm Leach Bliley Act provides yet another reason that background checks are not covered by the amended law. Gramm Leach Bliley Act allows the disclosure of nonpublic personal information with the consent or direction of a consumer OR in accordance with the FCRA.
As stated in New York State General Business Law § 399-ddd., the SSN “shall include the number issued by the federal social security administration and any number derived from such number” but does not include “any number that has been encrypted.” Failure to comply with the law can result in a fine of up to $500 for the first violation and up to $1,000 dollars for more violations. New York State General Business Law § 399-ddd. is available on the following link: http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$GBS399-DDD*2$$@TXGBS0399-DDD*2+&LIST=LAW+&BROWSER=EXPLORER+&TOKEN=08146486+&TARGET=VIEW.
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