Handing over passwords could legally be a condition of acquiring or keeping a job, said WebProNews.
Perlmutter said of his amendment before it was defeated: 'It helps the individual protect his right to privacy and it doesn't allow the employer to impersonate that particular employee when other people are interacting with that person across social media platforms.
He warned of an invasion of privacy and the potential of employers to 'impersonate' employees online.
The Democrat initially proposed the password privacy measure as part of the Federal Communications Commission Process Reform Act of 2012 and warned that social media users have a reasonable expectation of privacy.
In a statement he added: 'They have an expectation that their right to free speech and religion will be respected when they use social media outlets.
'No American should have to provide their confidential personal passwords as a condition of employment.'
Perlmutter faced criticism from bill sponsor Mike Rogers who claimed that he was trying to kill the act.
He said that the issue should be addressed in separate legislation.
But previous attempts to counteract the increasing trend of employers asking for prospective employees social networking login details have failed.
The Password Protection Act 2012 was introduced to Senators and Congressman but was not passed.
The overall act would allow the US Government and private companies such as Facebook to share information with one another should they come under cyber attack.
But critics of the contentious bill, which initially failed when it was rejected by Senators last year, say that it would bypass privacy laws and allow companies to hand over users' information to the Government.
Read more: http://www.dailymail.co.uk/news/article-2313367/CISPA-Amendment-US-cyber-attack-law-banning-employers-asking-Facebook-passwords-blocked.html#ixzz2RJA2omwZ
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