Bloomberg

Payroll data security threats are serious business. They can happen at any time — from outside your organization or inside your organization. They can also stem from pure error. When it comes to payroll processing, confidentiality is a priority, first and foremost. Bank account numbers, home addresses, social security numbers, pay rates and other personal information are necessary to process payroll and tax forms, and they cannot — under any circumstances — be compromised.

While trust is an important aspect of working with employees and vendors, definitive measures must be in place to ensure that employee personal information and payroll related data remains confidential and secure at all times. Strengthening your defense strategy means upholding technology protocols and security measures as well as administering proper staff training in your payroll department.

Below are six tips to help you ensure your payroll data is safe:

1. Refine your payroll security procedures
In order to protect your company from payroll data security breaches, it’s important to ensure your procedures include training payroll employees on proper use of the payroll system on a regular basis. Doing regular audits of payroll procedures and data security will ensure that employees are not getting bogged down by habits that inadvertently misuse the system, exposing potential security threats. Training employees on payroll system updates or revisions should be a regular part of your internal training plan as well.

2. Apply timely payroll system updates
Speaking of payroll system updates, they should be applied to the payroll software in a timely fashion. Running an older version of the software may leave gaps in data storage and retrieval or provide the potential for security breaches. This ensures that everyone is on the same page and utilizing the system in its most current state. Payroll technology vendors typically apply updates to the system automatically, which provides peace of mind.

3. Remember email and mobile security
Your organization likely has an overall security policy to patrol threats through anti-virus and anti-malware software. Ensure that payroll system security is part of the overall security policy and that all payroll users are following organizational protocol on company issued equipment.

Confirm that email policies are strictly adhered to in the payroll department to minimize the risk of employees forwarding or receiving attachments while not realizing they have included confidential information.

Are payroll employees conducting email correspondence on their smart phones? Are attachments encrypted? This is particularly important in our mobile world. Have a clear policy set for mobile access. If utilizing mobile, the security measures in place on their desktops must transfer to their mobile devices.

Make sure employees understand signs an email may be part of a phishing scam and that they follow procedures to report the email and delete it. If your firm needs to send an email asking for confidential information, be certain employees are contacted directly to ensure proper identification.

4. Update login credentials
Payroll system users should update their passwords on a regular basis. This policy should be clearly stated and understood as well as backed up with automated reminders. The FTC provides tips for businesses to apply security measures to prevent fraud.

5. Apply separation of duties
One of the oldest accounting safeguards that translate to payroll system security is applying separation of duties. Having the same employee create new hire records, collect timesheets, enter data and create paychecks could leave room for data breaches. Create clear silos for payroll duties that ensure at least two to three different users are part of the payment process. Do regularly scheduled audits as well as ad hoc audits from time to time.

6. Avoid paycheck fraud when printing checks
Avoid check fraud by using high-security check printing procedures. If you are outsourcing your payroll, ensure your vendor has these safeguards in place. Most providers go above and beyond in this area. Print only the minimum data necessary for a check to be cashed. Providing online self-service capabilities wherever possible for employees to retrieve their data rather than having it printed eliminates the risk of having checks lost or stolen. Ensure pro-active fraud measures are in place at your bank and that blank checks are fully secured.

Ultimately, your organization should build firewall technology with extra emphasis on employee-sensitive information. Ensure your payroll vendor has strong security measures in place that meet or exceed your organization’s security policies.

Taking a full assessment of the data that is in your care — and the entry and exit points of this data — will help you to understand the full scope of what you are protecting. By strategically securing each component of your payroll department and working closely with your technology associates and payroll vendor, you will be steps ahead of any security threats that might come your way.

Katie Badeusz

Katie Badeusz

Katie Badeusz is a senior marketer at EPAY Systems, which provides SaaS-based human capital management technology and services designed to help medium to large businesses manage their workforce.