Understanding Employment Authorization Document (EAD) and Its Benefits Over Social Security Number (SSN)

When navigating the complexities of working in the United States, understanding the differences and benefits of various identification documents can be crucial. Two such documents that often come up in discussions about employment are the Employment Authorization Document (EAD) and the Social Security Number (SSN). This article aims to clarify what an EAD is, how it differs from an SSN, and the unique advantages it offers.

What is an Employment Authorization Document (EAD)?

Employment Authorization Document (EAD) is a document issued by the Department of Homeland Security allowing individuals who are not citizens of the United States to legally work within the country. Unlike a Social Security Number (SSN), which is used specifically by U.S. citizens and certain eligible aliens, an EAD serves as proof of work authorization and can be used by foreign nationals in various circumstances.

The most common types of EADs include:

DACA (Deferred Action for Childhood Arrivals) EADs: Issued to individuals who are part of the DACA program, providing work authorization. Historical Work Order (EAD): Used by individuals who have had their employment authorization temporarily suspended. Initial Employment EAD: Issued to new hires who are authorized to work.

Differences Between EAD and SSN

It is important to understand that an EAD and an SSN are not interchangeable and serve different purposes:

EAD vs. SSN: An EAD is not a Social Security Number; it is a temporary work authorization document. An SSN, on the other hand, is a unique nine-digit number issued by the Social Security Administration (SSA) to U.S. citizens and certain eligible aliens to track their earnings and the Social Security program. Entry Status: A Green Card holder may have both an EAD and an SSN, whereas an EAD holder who is not a permanent resident or citizen does not have an SSN.
Use and Purpose: An EAD is used to prove that the individual is authorized to work in the United States, while an SSN is used for tax, employment, and government programs.

Advantages of EAD Over SSN

While an SSN is a valuable identifier for citizens and eligible aliens, an EAD offers distinct advantages:

Building Company Credit With EAD

One significant advantage of using an EAD is the ability to build a company’s credit. Unlike the SSN, which is typically used by the company’s owner or another employee, an EAD allows the company to use the employee’s individual credit, thereby keeping the company’s financial obligations separate and distinct.

This setup is particularly beneficial for small business owners or companies looking to establish a strong credit profile without relying solely on a personal SSN. It also helps in managing personal and professional financial responsibilities more effectively, ensuring that a company’s debts do not affect its employees’ personal credit standings.

Fewer Administrative Hurdles

Another advantage of an EAD is the reduction in administrative hurdles for employers. When hiring foreign nationals, especially those with temporary work authorization, managing an EAD can be more streamlined than handling an SSN for both the employer and the employee. This includes fewer complications in payroll, tax, and other related processes.

Flexibility and Lifespan

An EAD is designed for temporary work authorization, making it more flexible than a permanent Social Security Number. An EAD can be renewed as long as the holder continues to meet the eligibility requirements, ensuring that the worker can maintain their employment status without the need for a lifetime commitment.

Applying for an Employment Authorization Document (EAD)

Applying for an EAD involves submitting an I-765 form, along with the necessary supporting documentation and application fee. The process can vary depending on the specific eligibility category, such as the DACA program or historical work orders.

It is essential to ensure that all the required documents are accurate and up-to-date to avoid delays in the processing of the application.

Conclusion

Understanding the differences between an Employment Authorization Document (EAD) and a Social Security Number (SSN) is crucial for navigating the complex world of employment in the United States. While an SSN is a valuable identifier, an EAD offers unique benefits such as the ability to build company credit, fewer administrative hurdles, and greater flexibility. Whether you are a foreign national with temporary work authorization or an employer looking to streamline your hiring processes, knowing the advantages of an EAD can make a significant difference in your overall success.