Feds to stop issuing SIN cards this month

Employers will need to ensure documents, procedures reflect the change
By Sheila Brawn
|Canadian Payroll Reporter|Last Updated: 03/10/2014

At the end of this month, the federal government will stop producing and issuing plastic social insurance number (SIN) cards. Instead, Service Canada will provide a letter advising applicants of their social insurance number.

The government announced plans to phase out the use of the plastic cards two years ago. It said the move would help to modernize the way the federal government does business and save money. It’s estimated Ottawa will save about $1.5 million a year by no longer providing plastic cards.

Government officials also point to the SIN card as a problem for fraud and identity theft. By stealing a SIN card, a thief can get access to bank accounts and to government benefits under programs such as the Canada Pension Plan (CPP), employment insurance and Old Age Security. The cards don’t have any security features, such as a photo.

"The social insurance number card is simply a piece of plastic with your name and number punched into it and some ink. An enterprising grade 12 student could do it in his or her parent’s basement without the parents even knowing. It doesn’t provide any security. Moving away from reliance on the card provides benefits from an identity theft perspective," Peter Boyd, senior director general with Service Canada’s Integrated Channel Management, told a House of Commons committee on finance.

Employment and Social Development Canada (ESDC) has long recommended individuals not carry their SIN card with them and instead store it in a safe place. But the department says many Canadians have continued to keep it in their wallets. It is likely this will continue for some time since the move to end the production of plastic cards does not affect current SIN cards. They will continue to be valid.

The phasing out of the plastic cards will not only affect people who apply for social insurance numbers, but also employers who have made it a policy to ask new hires to show their SIN card.

"In some cases, employers may have to make changes to their documentation, guidelines, application forms, procedures and agreements where they reference the SIN card, to make reference only to the SIN," said Jordan Sinclair, a media relations spokesperson with ESDC.

It is the number that payroll needs for year-end and Record of Employment reporting, not the card.

Although some employers may be used to asking for the SIN card as a means of verifying an employee’s identity, Sinclair says ESDC does not consider it to be an identity document. ESDC advises employers to ask for other pieces of identification rather than the SIN card to correctly identify employees before hiring them. If employers have any concerns about the validity of a SIN or think it is being misused, Sinclair advises they contact Service Canada.

SINs beginning with 9

One situation in which it is essential that employers see other documentation and not just rely on the SIN card is when it comes to hiring individuals whose SIN begins with the number nine.

Individuals who are not Canadian citizens or permanent residents, but who are temporary foreign workers, receive such SINs. They have an expiry date that corresponds to the period they are allowed to work in Canada. Employers must ask to see the individual’s existing immigration document that allows them to be employed here (such as a work or study permit) and verify it has not expired.

If it has expired, the employer needs to have the individual contact Citizenship and Immigration Canada to get a new permit before hiring them. The employer must also advise the individual to apply to Service Canada after they receive their new work permit to have their SIN record changed to include a new expiry date.

What will not change with the phasing out of plastic cards is the requirement that employers obtain and record a SIN from each employee within three days of beginning work. Individuals who do not have a SIN, but who are legally allowed to work in Canada, will still have to apply for one within three days of becoming employed. Employers will continue to have a legal obligation to tell employees to go to a Service Canada office with original proof-of-identity documents to apply for a SIN. Once an individual receives the SIN, she has three days to give the number to the employer.

If an employer is not able to obtain a SIN because an employee does not have one or refuses to provide it, the employer should contact Service Canada within six days of the individual beginning work. As has been the requirement in the past, an employer must be able to show it made a reasonable effort to get the number. This could include keeping copies of all requests sent to the employee asking for the SIN. Employers who do not make a reasonable effort could be fined, as could employees who do not provide the number.

Whether employees have SIN cards or letters, ESDC will continue to require that employers keep employees’ social insurance numbers confidential by storing them in a secure location, using encrypted software to protect them and ensuring that only authorized employees have access to them.

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Employers and SINs: Service Canada tips

Service Canada provides the following list of reminders for employers when they request, collect, use and store social insurance numbers:

Best practices

Collect the Social Insurance Number (SIN)
of new employees within three days of their start of employment.

Record the employee’s SIN.

If in doubt whether an employee’s SIN is valid, contact Service Canada’s Social Insurance Registration Office (1-800-206-7218, select option "3") to verify the number.

Be sure your new employee’s orientation training includes the importance of privacy of personal information and the SIN.

If a new employee’s SIN begins with a nine, ensure the work permit issued by Citizenship and Immigration Canada is valid and all terms and conditions of the work permit are being followed.

Shred all paper records and fully erase any electronic records containing employee personal information you are no longer legally required to keep.

Allow employees to access and/or challenge any personal information kept in their personnel record.

Keep your record of employees’ personal information accurate, complete and up-to-date.

Keep sensitive information in a secure area or on an encrypted computer system. Only allow access to individuals who are authorized.

Protect your electronic information with confidential passwords that are at least seven characters in length. Do not spell anything or follow logical patterns. Use a combination of upper- and lower-case characters, numbers, and symbols (for example: E.E0n2$).

Things to avoid

Never ask for the SIN on a job application or during an interview.

Do not use the SIN as an employee identification number.

Never employ someone who does not have a valid SIN.

Never give an employee’s SIN to anyone unless you know the person is legally entitled to that information (for example, for income tax or government benefit purposes).

Never hire anyone with an expired immigration document.

Don’t allow SIN fraud to go unreported. If you suspect a SIN is being used fraudulently, contact Service Canada at 1-800-206-7218 and select option "3" (or (506) 548-7961 if calling from outside Canada).

Don’t leave documents containing employees’ personal information, especially their SIN, in the open.

Don’t keep any personal information of an employee or customer you no longer need.

Don’t allow employee work stations and computers to be left unattended since unauthorized individuals could obtain sensitive personal information.

Don’t share your password with anyone. If your business requires you to share access to sensitive information with others, be sure to change your password regularly and restrict access to the system.

Source: Service Canada`s Social Insurance Number Code of Practice, Annex 6.