Preventing Identity Theft

For you and your employees

· Shred or tear into three and throw in three different trash containers documents that show your SSNs, bank, credit-card, or other personal data.


· Beware of “junk” credit-card offers. Completing the application will give the sender sufficient personal information to steal from you.


· Shred or tear up (don’t just throw out) cash advance convenience checks that are not from your established credit cards and that you don’t want. Whoever finds these checks can use them to steal from your account and, if you have a high credit limit, you can suffer real damage.


· Check your bank and credit card account activity as soon as you receive your monthly statements. If you bank online, check activity and balances frequently, to spot suspicious transactions early.


· Do not respond to e-mails that ask you to “verify” account information, passwords or your SSN. Instead, call your financial institution to see if they need information on your account.


· Beware of anyone “taking a survey” who asks for personal financial information, such as your SSN, or who poses as the employee of a firm you do business with, and anyone who announces that you have won a contest (“if we can just verify your SSN, I can send you the check”).


· Avoid using public wireless Internet for banking or other communications that include personal data.


For your company or client

· Provide drawers or cabinets where employees can lock up their purses and other valuables.



· Advise employees not to leave personal bills or statements on their desks. Warn employees that even if they trust co-workers, salespeople, repairpeople and other visitors may see the information.



· Make sure that payroll records and HR payroll systems are in a secured area where only authorized employees can see PC screens and personal documents laying on desks.

Payroll Definitions

“Back-pay” is pay received for actual or deemed employment in a prior tax year. Back-pay that is wages for covered employment is FICA taxable regardless of the year paid. Use the SS wage ceiling and percentage in effect in the year that the back-pay is distributed (not the year when the employee should have received it).



FICA-exempt payments include damages for personal injuries, interest, penalties, or legal fees. Because the SSA might treat back-pay given for different reasons in different ways (e.g., a court award for back-pay due to discrimination v. an out-of-court settlement), reporting different kinds of back-pay separately is important. Back-pay should be reported on the employee’s W-2 in the year paid.



“Special wages” are nonpayroll wages for services performed in a prior year—e.g., accumulated sick or vacation pay, bonuses, deferred compensation, sales commissions, and severance pay. If the employee or former employee now receives Social Security retirement benefits, these payments should be reported on the employee’s W-2 in the year they are received. Use Form SSA-131 to report special wage payments, such as nonqualified deferred compensation and §457 plan deferrals and payments earned in a year prior to the year of payment.