Protecting Yourself and Your Employees from Employment Identity Theft

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Understanding Employment Identity Theft

How Does Employment Identity Theft Occur?

Employment identity theft happens when someone uses your Social Security number or other personal identifying information to gain employment or collect wages. This can lead to issues with the IRS, disrupt your Social Security benefits, and cause problems during pre-employment background checks.

How Do Identity Thieves Get Your Information?

Identity thieves can obtain your information through various means, including:

• Phishing: Scammers use texts, emails, or phone calls to trick you into providing personal information.
• Fake Job Postings: Fraudulent job listings can lure you into submitting personal data.
• Data Breaches: Employee or job applicant data may be leaked.
• Document Theft: Fraudsters may steal documents containing personal data.
• Employee Theft: Unscrupulous employees may steal data on the job.

How Scammers Commit Employment Identity Theft

For example, someone with a disqualifying felony might use your clean record to get a job. Their wages and tax withholdings are reported under your Social Security number, causing discrepancies when you file taxes. The IRS may notify you of additional taxes owed or suspect identity theft.

Effects of Employment Identity Theft

Employment identity theft can affect your IRS records, Social Security benefits, and background checks. It can also lead to other types of identity theft, such as fraudulent tax returns or credit accounts. Resolving these issues can take months and may require pre-emptive explanations during background checks.

Signs of Employment Identity Theft

Be alert to the following warning signs:

• Letters from the IRS about unpaid taxes or duplicate tax returns.
• W-2 or 1099 forms for income you didn’t earn.
• Unrecognized earnings on your Social Security benefits statement.
• Employers listed on your credit report that you haven’t worked for.
• Soft inquiries on your credit report from prospective employers.

How to Avoid Employment Identity Theft

While you can’t eliminate the risk entirely, you can take steps to protect your information:

• Avoid Phishing Scams: Be cautious of texts or emails soliciting personal information.
• Use a Password Manager: Generate and store unique passwords for each account.
• Don’t Save Personal Information on Work Computers: This reduces exposure to hackers and inside thieves.
• Use a VPN on Public Wi-Fi: Encrypt your information and obscure your IP address.
• Consider Identity Theft Monitoring: Services can scan for personal data used in identity fraud.

How Employers Can Protect Against Identity Theft

Employers can help protect employees and job applicants by:

• Conducting Identity and Background Checks: Verify candidates’ identities and credentials.
• Strengthening Data Security: Implement strong data security policies, use encryption, and keep software up to date.
• Educating Employees: Teach employees about phishing attacks and signs of identity theft.

What to Do if You’re a Victim of Employment Identity Theft

If you suspect you’re a victim, take these steps:

1. Report It: File a police report and a complaint with the Federal Trade Commission.
2. Secure Your Credit: Place a fraud alert on your credit reports with major credit bureaus.
3. Notify the IRS: Follow instructions in any IRS notices and consider getting an identity protection PIN.
4. Contact Social Security: Check your benefits statement and report any unauthorized employment.
5. Reach Out to Employers: Inform any employers who sent you tax forms about the fraudulent use of your identity.
6. Check Your Credit Reports: Look for signs of non-employment identity theft and incorrect employer information.

The Bottom Line

Awareness of employment identity theft can help you spot the signs and take action to mitigate the damage. Regularly checking your credit report and score, and considering credit monitoring services, can help you stay on top of potential identity theft.

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