Why Protect Your Payroll Data Is So Important

For companies, there is a huge awareness of the need to protect customer information and ensure that it is secure at all times.  But there is another area of data that needs the same protection and is something overlooking – payroll data.  So why is it so important that you protect payroll data and how can this be done?

Holding personal information

What is key to remember about payroll information is that it contains personal data for your staff that can be used to identify them.  These details include:

  • Name
  • Address
  • National insurance number
  • Tax codes
  • Bank details

Just like protecting customer information of this nature is required, protecting this information you hold on your staff is equally important.  This should be protected both internally and externally so people within the company cannot access the information unless they are required to do so as well as external attempts being blocked.

GDPR obligations

As well as being good practice to protect staff data, it is also an obligation under GDPR (General Data Protection Regulations).  This is the new set of rules that govern how businesses handle personal data both for customers and staff.

Under the regulations, you have a legal obligation to hold information in a safe and secure manner.  Any systems that hold payroll data need to be secure and only accessible by people who need it for their job – primarily payroll staff.  It is also important that the data is only held for as long as it is needed and that you have consent from the employee to have the information.

Risks of hackers stealing information

If payroll information isn’t protected in the best way, then there is a very real risk that hackers can steal information.  We hear almost daily stories of companies who are in trouble due to customer information being exposed by cybercriminals and facing fines and huge costs.  This same problem can also happen with staff data.

Added to the costs is the loss of trust if your employee suffers a fraud or financial loss due to your company not protecting data.  This is the kind of situation that can lead to staff leaving the company and a general bad employer reputation.

How to ensure data is safe

It is clear that it is very important that all data is kept safe – customer and staff information.  But as far as payroll information, there is often the need for different departments to access this as part of their jobs.  So how do you ensure data is safe?

Centralise information

A good starting point is to ensure that all payroll information is in one place – and this doesn’t need to be within the company.  Using a payroll specialist is one of the best ways to ensure all payroll data is centralised and also protected to the highest standard as well as keeping it away from other business information.

If you do keep it within the business, ensure there is a single central database with different permissions in place.  Ensure that any physical equipment used to access it such as a laptop or computer is also kept in a secure place.

Limit who accesses the data

By setting up a system where there are limits as to what data anyone can see, you can reduce the risks of someone gaining access to information they shouldn’t have.  You can organise permissions in the system that gives different roles access to different levels of information.

This ensures only people who need to access the data can get to it and this can be organised depending on their role.  For example, head of payroll may access everything while someone doing basic admin work may only access names and employee numbers.

Have monitoring processes in place

Setting up a secure system is one thing, but it is needs to be monitored and checked to ensure that it remains secure.  There should also be processes in place to ensure accuracy of information – such as the person inputting data not being the same person who reviews it.

Ensure anyone who is responsible for monitoring sensitive data is fully trained in GDPR and best practices so they can objectively look at the system and processes used.  Then if they suggest changes, this can be made to ensure the system remains robust.

Regularly review data handling processes

As well as monitoring the process of storing data, it is also worth having a regular review process for the whole data handling system, both for customer information and for employee data.

Look at who has access to data, where it is stored and what processes are in place to delete the data when it is no longer needed.  Also make sure you have processes in place to handle a request for data held from a customer or member of staff so that it is quick and efficient to do this.

Outsourcing payroll to protect data

Outsourcing payroll is one of the most efficient ways to protect data and to save time and work within the business.  By having a payroll specialist handle the whole process, there’s no need for the company to hold sensitive data internally where it needs multiple layers of protection.  Instead it can be held by the payroll company who will have the top level of security in place to protect all of their customers.

You can also avoid the need for constant reviews and checks on the processes in place when the data isn’t held within the business – or at least reduce them if less data is held.  This can save time and free up employees to carry out other tasks.

Overlook at your peril

Data protection for payroll information is something that businesses overlook at their peril.  While there are substantial fines due to GDPR, the biggest issue is the loss of trust from employees if they find their employer didn’t take steps to protect their data.  Therefore, whether internally or externally, it is key that every business has processes in place to protect this data as completely as possible.

For more information about Trace Payroll’s payroll service and how to protect your payroll data, get in touch by calling us on 0845 873 5619 or you can use our online contact form.

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To find out more about fully managed payroll outsourcing with a personal touch, contact Trace Payroll Services today.

Call Trace Payroll Services on 0845 873 5619