Identity Theft in the Workplace

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How often have we heard our business leaders state, “Our employees are our most value and asset?”   Yet, how many employers are lax about protecting those “valued assets” when it comes to their employees’ personal, confidential data?   Theft of an individual’s personal information (“Identity Theft”) has exploded in recent years.

Four years ago, identity theft wasn’t even designated a crime. Today, it’s a felony under the Identity Theft and Assumption Deterrence Act of 1998 and ranks among the top consumer fraud complaints. The number one underlying source of identity fraud is the theft of employee records according to a report by Trans Union, one of the nation’s three credit bureaus. A company in San Diego recently settled with 38 employees who alleged that the company’s laxity in protecting their sensitive personal information (names, addresses, social security numbers, birth dates) allowed another employee and an accomplice to fraudulently rent three apartments, open 20 cellular phone accounts and set up more than 25 credit card accounts, which were used to purchase over $100,000 worth of goods.

Aside from the devastating effect that identity theft can have on an employee’s personal life, employee morale and productivity can also weigh heavily on an employer’s business opportunities.


As an employer, what steps can you take to help mitigate the damages from identity theft? While no workplace can be 100% safe from the threat of identity theft, sound practices can do a lot to deter the crime.

  • Have a written privacy policy.
  • Lock up and limit access to sensitive records – keep personal files in a secure area and limit those who have access to them.
  • Minimize use of Social Security Numbers. Don’t use social security numbers as employee identifications, on insurance cards, claim forms, paycheck stubs, badges, etc.
  • Close your computer gates. Ensure access to computer files is password protected. Disable employee access to your company data immediately upon termination. Conduct audits to data access if suspicion arises.
  • Invest in an industrial shredder. Always destroy/shred discarded documents that contain personal identifiers and account numbers. Have all shredded materials disposed of by a responsible company which will further warrant this final destruction and indemnify you from any loss due to unsuccessful disposal.
  • Check backgrounds thoroughly. Require background checks and criminal screening as a routine prerequisite of any job offer. Make sure you know the identities/background of people working for you.
  • Watch third party vendors and temps. Consider using temp employees only in areas of the company where they will not have access to confidential data.

The employment relationship is a shared commitment. Regularly remind your employees of your security practices and let them know what they should do if they suspect that their personal identification data has been compromised:

  • Get in touch with the fraud department of the three major credit bureaus and report the theft, request that a “Fraud Alert” be placed on their file and no new credit be granted with their approval;
  • Review carefully your credit report and check for fraudulently accessed or open accounts;
  • File a police report with the local police department or the law enforcement authorities where the theft took place;
  • Call the FTC “Identity Theft Data Clearinghouse” toll free at (877) IDTHEFT to report the theft. Counselors offer advice on ways to deal with credit card related problems.


Taking reasonable and prudent steps to shield employee’s personal data can be a major factor in deterring identity theft of your employees. Identity theft can have a debilitating effect, not just on the victims, but possibly later down the line to that victim’s employer. A special bond of trust exists when an employee provides confidential personal data to an employer. Guarding that data from preying eyes is an employer’s first duty in protecting it most “valued assets.”

With over 30 years’ experience in advising employees and businesses on labor and employment issues, let Boznos Employer Lawyers work with you to ensure you are ready to meet the challenges posed by the ever changing employment law landscape. Call Bill Boznos today at (630) 375-1958 or contact us through our website at



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