What Is Employment Identity Theft?

How Does Employment Identity Theft Occur?

Employment identity theft happens when someone illegally obtains your personally identifiable information and uses it to get a job or collect wages. A scammer may also use your identity to craft fake credentials or experience.

How Do Identity Thieves Get Your Information?

Employment identity theft typically begins with stolen data. Fraudsters may scam you into providing personal information, or they may obtain data via a data breach, document theft or internal theft. Common means of stealing data include:

• Phishing: Scammers use text messages, emails or phone calls to trick you into giving them access to your personal identifying information with phishing.
• Fake job postings: You may be lured into submitting a job application for a fraudulent job listing, or may provide information after receiving a job offer that doesn't exist.
• Data breaches: Employee or job applicant data may be leaked in a data breach.
• Document theft: Fraudsters may get their hands on employee documents or paper job applications containing personal data.
• Employee theft: Unscrupulous employees may steal data on the job and either use it or sell it.

Learn more >> The Latest Scams You Need to Be Aware Of

How Do Scammers Commit Employment Identity Theft?

Say someone wants to work as a caregiver, but they have a disqualifying felony conviction on their record. They might use your identity (and clean criminal record) to qualify for the job.

When they receive pay, their tax withholding might be attributed to your Social Security number and their wages reported as yours to the IRS. When you're ready to file taxes, your reported income won't include the fraudulent amount, raising questions with the IRS. The IRS may notify you that you owe additional taxes or let you know they suspect identity theft. Either way, you'll need to resolve inconsistencies with the IRS.

How Does Employment Identity Theft Affect You?

In addition to creating problems with the IRS, employment identity theft may affect your record of earnings with the Social Security Administration (SSA). A scammer's fake employment history may show up during a background check for employment or on your credit report. Fraudsters who commit employment identity theft may engage in other types of identity theft as well.

Disentangling errors in government accounts can take months. If you need to pass a pre-employment background check, you may want to provide a pre-emptive explanation that you've been the victim of identity theft. A scammer who uses your identity for employment may file a fake tax return in your name to claim your refund; they may also abuse your identity by opening loans or credit card accounts. If a fraudster using your identity commits a crime (on or off the job), it could show up on your criminal record.

Signs of Employment Identity Theft

Employment identity theft can be difficult to detect. However, if any of the following happens to you, consider it a warning sign.

• You get a letter from the IRS. The IRS may notify you that they suspect you are a victim of employment identity theft, or that you have unpaid taxes based on income reported under your Social Security number. The IRS may also notify you about a duplicate tax return or suspicious tax document.
• You receive a W-2 or 1099 form reporting income you didn't earn from an employer you don't know.
• Your Social Security benefits statement shows earnings you don't recognize.
• Your credit report lists an employer (or employers) you haven't worked for.
• Your credit report shows soft inquiries that may have come from prospective employers running background checks for someone using your identity to apply for work.

Learn more >> How to Check for Identity Theft

How to Avoid Employment Identity Theft

Even if you can't eliminate the risks entirely, you can take steps to keep your information safe and up your defenses against this type of identity theft. Here are a few tips.

• Don't fall for phishing scams. Be alert to texts or emails that try to solicit your personal identifying information. Be vigilant at work as well: Fraudsters use similar tactics to gain access to networks and data.
• Use a password manager. Get an app that generates a unique password for every account and remembers it for future reference.
• Don't save personal information on a work computer. Saving information on a work network or device increases your exposure to hackers and inside thieves.
• Use a VPN when using public Wi-Fi. A virtual private network (VPN) encrypts your information and obscures your IP address so it's more difficult to trace.
• Consider identity theft monitoring. Identity monitoring services scan for personal data that might be used to commit employment identity theft and other types of identity fraud.

Learn more >> How to Protect Yourself From Identity Theft

How Employers Can Protect Against Identity Theft

Employers can do their part to protect employees and job applicants from employment identity theft and reduce the chances that they'll hire unqualified job candidates based on fake identities or fraudulent credentials. Here are a few core measures to consider.

• Conduct identity and background checks before hiring. Verifying a job candidate's identity, experience and credentials can help your organization avoid hiring applicants with false identities.
• Strengthen data security. A strong data security policy clearly defines how data should be stored, managed and accessed. Use encryption and firewalls to secure data; make sure software is up to date. Data security can also mean enforcing a policy that requires all documents to be shredded before being disposed of and regulating the use of personal devices at work (and the use of business devices for non-work purposes).
• Educate employees on identity theft and security issues. Teach employees about the dangers of phishing attacks. Also help them understand the signs of employment identity theft and what to do if they suspect a problem.

What to Do if You're the Victim of Employment Identity Theft

Take immediate steps to report suspected fraud, secure your credit, notify the IRS and SSA, and reach out to employers who may be involved. Here are some basic steps to follow.

1. Report It

File a police report with your local police department and/or file a complaint with the Federal Trade Commission at IdentityTheft.gov. Keep a copy of your report as evidence of your identity theft.

2. Secure Your Credit

You have a right to place a fraud alert on your credit reports with the major credit reporting agencies if you suspect you've been a victim of employment identity theft. A fraud alert asks creditors to verify your identity before approving credit in your name, to make it more difficult for an identity thief to open accounts using your information. Requesting a fraud alert at any of three credit bureaus—Experian, TransUnion or Equifax—automatically adds a fraud alert to them all.

Learn more >> What's the Difference Between a Fraud Alert and a Credit Freeze?

3. Notify the IRS

If the IRS sends you a notice of possible employment identity theft or additional tax due to unreported income that wasn't yours, follow instructions for responding in the letter. If you've received a W-2 or 1099 form for earnings that aren't yours, contact the employer who sent the form and ask them to correct the error. You may also want to get an identity protection PIN to make it easier for the IRS to verify your identity online and more difficult for a scammer to file a fake tax return in your name.

4. Contact Social Security

Check your Social Security benefits statement or open an online Social Security account to check for signs of unauthorized employment. Contact the Social Security Administration to report a problem or request a review of your earnings.

5. Reach Out to Employers

Reach out to any employers that have sent you tax forms or other employment-related communications to let them know your identity is being used fraudulently. If they've reported income to the IRS, ask them to issue a corrected W-2 or 1099.

6. Check Your Credit Reports

You may want to check your credit reports for signs of non-employment identity theft as well as incorrect employer information that could be a sign of fraudulent employment. Employer listings on your credit report don't affect your credit score, but could cause confusion if a prospective employer checks your credit and sees inconsistencies in your work history. Also look for new credit or loan accounts you didn't open yourself; they're signs someone is using your identity to commit fraud.

The Bottom Line

No one wants to find out they're the victim of identity theft. But knowing that employment identity theft exists may help you spot the signs so you can start working to undo the damage.

Staying on top of possible identity theft—employment-related and otherwise—is a smart idea anytime. You can look for changes to your credit file that can signal fraud by checking your credit report and score for free. Consider free credit monitoring to receive alerts whenever changes are made to your credit file, so you'll be aware of activity as soon as it happens.