One of our recommendations to help alleviate that headache that comes with year-end payroll is to ensure all of your employees’ Social Security numbers are accurate.
Every year, you’re required to send Copy A of Form W-2 to Social Security so they can match the name and Social Security number (SSN) against its database. When Social Security finds a match, the earnings information from the W-2 is recorded with the employee’s earnings history.
So it’s crucial all of your numbers are accurate so you save yourself from the hassle later down the line. Here are some tips to determine if that Social Security number you keyed in is actually valid.
How Social Security Numbers are Issued
Did you know? The Social Security Administration (SSA) began assigning the nine-digit Social Security number (SSN) in 1936 in order to track workers’ earnings over the course of their lifetimes to pay benefits.
The Social Security Administration (SSA) changed the way they issue numbers back in June of 2011. The change is referred to as randomization and its goal is to help protect the integrity of the SSN.
The SSN has always been comprised of a three-digit area number, a two-digit group number and ending with a four-digit serial number. Since 1972, the SSA issued Social Security cards centrally and the area number reflected the state, determined by the ZIP code in the mailing address of the application.
Because that had limitations, the new randomization change affected the assignment process by eliminating geographical significance and importance of the highest group number.
