I little research shows that this is an urban legend, at best...

and I quote, from the link below " Question
Is it legal to laminate your Social Security card?

Answer
No it is not illegal, but it’s best not to laminate your card. Laminated cards make it difficult, if not impossible, to detect important security features.
The Social Security Act requires the Commissioner of Social Security to issue cards that cannot be counterfeited. We incorporate many, many features that protect the card’s integrity. That includes highly specialized paper and printing techniques—some visible to the naked eye and some not. Further, we continue to actively explore and adopt new technologies that hamper duplication.

Keep your Social Security card in a safe place with your other important papers. Do not carry it with you.

I have had a SS card since I was about 12, and I laminated it, and it's survived, well, a bunch of years.

Sources: http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/p hp/enduser/std_adp.php?p_faqid=624&p_created= 1017795231&p_sid=aUB8KvUi&p_accessibility=0&p _redirect=&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2 J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9NjksNjkmcF9 wcm9kcz0mcF9jYXRzPSZwX3B2PSZwX2N2PTEuMTYmcF9w YWdlPTI*&p_li=&p_topview=1

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/624/~/laminating-your-social-security-card.

Laminating your Social Security card.
Updated 07/19/2010 03:09 PM | ID #624
Is it illegal to laminate your Social Security card?

No it is not illegal, but it’s best not to laminate your card. Laminated cards make it difficult, if not impossible, to detect important security features and an employer may refuse to accept it.

The Social Security Act requires the Commissioner of Social Security to issue cards that cannot be counterfeited. We incorporate many features that protect the card’s integrity. That includes highly specialized paper and printing techniques—some visible to the naked eye and some not. Further, we continue to actively explore and adopt new technologies that hamper duplication.

Keep your Social Security card in a safe place with your other important papers. Do not carry it with you.

http://askville.amazon.com/law-laminate-social-security-card/AnswerViewer.do?requestId=6957032

Per the SSA website (www.ssa.gov)

Question
Is it legal to laminate your Social Security card?

Answer
No it is not illegal, but it’s best not to laminate your card. Laminated cards make it difficult, if not impossible, to detect important security features.
The Social Security Act requires the Commissioner of Social Security to issue cards that cannot be counterfeited. We incorporate many, many features that protect the card’s integrity. That includes highly specialized paper and printing techniques—some visible to the naked eye and some not. Further, we continue to actively explore and adopt new technologies that hamper duplication.

Keep your Social Security card in a safe place with your other important papers. Do not carry it with you.

Link posted below.

http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/p hp/enduser/popup_adp.php?p_sid=undefined&p_lv a=undefined&p_li=undefined&p_faqid=624&p_crea ted=1017795231&p_sp=undefined