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Michigan Establishes Minimum Privacy Protections For Social Security Numbers

  • October 31, 2005

In 2005, Michigan joined a growing number of states (Arkansas, California, Colorado, Delaware, Florida and Georgia, among others) that have enacted specific legislation protecting individual Social Security numbers. The Social Security Number Privacy Act prohibits the intentional disclosure of more than four sequential digits of an employee's SSN. The Act makes it a misdemeanor – punishable by up to 93 days in prison and a fine of $1000 – to knowingly violate any provision. Aggrieved employees may also bring a civil suit to recover their actual damages or $1,000 (whichever is greater) plus attorneys' fees. Many of the Act's provisions became effective immediately upon passage on March 1, 2005. Other provisions will become effective on January 1, 2006.

As of March 1, 2005:

Michigan employers may not disclose more than four sequential digits of an employee's SSN to any third party, display them in public (including on ID badges, accessible computer screens, bulletin boards, etc.), or include them in any visible form on a mailed document or information. Employers may not require an employee to use or transmit all or part of the SSN over the Internet or any computer system or network, unless the connection is "secure" or the transmission "encrypted." Employers may not place more than four sequential digits of an employee's SSN on any document or information mailed to an employee, unless:

  1. doing so as authorized by state or federal law; 
  2. doing so in the course of a bona fide application or enrollment process initiated by the employee; or
  3. doing so to "establish, confirm the status of, service, amend or terminate" an employee or health insurance benefit, or the accuracy of the SSN itself.

Specific exceptions exist for some employers currently using the SSN, or any part of it, as a bona fide identifier in some of these contexts; however, these exceptions are largely unavailable after January 1, 2006.

As of January 1, 2006:

In addition to the prohibitions discussed above, employers may not use all or more than four sequential digits of an employee's SSN anywhere as a primary identification number for the employee, or any of the employee's accounts. The Act specifically excuses from liability an employer whose "employee or agent" discloses all or part of an SSN in violation of an established "privacy policy" that comports with the Act's definition. Specifically, that policy must:

  1. ensure the confidentiality of the SSN;
  2. prohibit unlawful disclosure;
  3. designate limited access protocols;
  4. establish proper document retention and destruction protocols; and
  5. establish penalties for violation.

The policy must be made available in an employee handbook, procedure manual, or similar publication regularly available to employees.

©2005 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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