Personal paper shredders anticipated to become more common
Paper shredders, which have been a staple of offices for years, may become commonplace in the home as the result of new rules in the Fair and Accurate Credit Transaction Act, which was originally passed by Congress in 2003.
The new rules, which will go into effect June 1, 2005, have a provision indicating that if you employ just one person, such as a housekeeper, nanny or yardman, and you are paying their Social Security taxes as required by federal law, you must "destroy" the information before you discard it.
The law requires "shredding or burning" or "smashing or wiping" all of the paper or computer disks that contain personal information that is "derived from a consumer report" before it is discarded. If for example, you do a credit check on your household employee, and you get the information from a service that may have come originally from a credit report, you fall under the rules. The disposal provision affects all employers, no matter if they have one employee or thousands.
The rationale behind the law is the fear of identity theft, which is the fastest-growing crime in the U.S., according to the National Crime Prevention Council. About 7 million people had their identities stolen in the year ended July 2004.
Failure to shred can result in penalties. An employee could be entitled to recover damages sustained if his or her identify is stolen as a result of your inaction. If large numbers of employees are affected, they may be able to bring class-action suits and get punitive damages from employers. The federal government could fine you up to $2,500 for each violation, and state fines could be $1,000 per violation.
Note: This information was prepared as a public service by the Illinois State Bar Association and is a joint project with the Illinois Press Association. Its purpose is to inform citizens of their legal rights and obligations.
© Illinois State Bar Association
If you have questions about the application of the law in a particular case, consult your lawyer. The law is constantly changing. Information on this site or any site to which we link does not constitute legal advice.