Empowering Businesses: Strengthening Data Privacy And Cybersecurity In Payroll Platforms And Web Apps

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It doesn’t take too much of an analysis (or even much thought) to figure out why you wouldn’t want other people to get access to your payroll information.

You don’t want external parties to see the private data of your employees, how much they’re paid, let alone their account numbers, etc. 

Sure, using payroll platforms and web apps is the easiest way to handle payroll, and while these tools need access to all of this information, you can’t afford to go any further. 

So, the best way to set your business for the future is to find a way to empower your business by increasing privacy and cybersecurity during these processes.

Here’s what you need to know about it. 

Why is payroll data so sensitive?

Even just intuitively, the term payroll data sounds like something sensitive and shouldn’t fall into the wrong hands. However, what are the main reasons behind this? Well, there are a few things worth considering on this topic. 

cybersecurity business

The best thing about these methods to protect your payroll information is that you can use them to protect sensitive data. With cybersecurity threats getting increasingly serious, you must become more invested

Financial information: Things like tax and bank account details should never fall into the wrong hands. Just imagine how much more effective phishing attempts would be when they start coming from (what appears to be) your bank. 

Then, there are salary figures that could be exploited by your competitors and even sow dissent within your own organization.

Personally identifiable information: Payroll data is about more than just salary figures and tax identification. It’s also personal information like the full name of your employees, SSNs, addresses, and dates of birth. 

All of this can be used for account takeover, identity theft, or even synthetic fraud, which could seriously endanger the enterprise and the employees in question.

Trust: Your employees are trusting you with their private financial data. Sure, it’s expected from an employer to have all of this information available, but it’s also expected of them to keep it safe. Failure to do so will make you lose face in the eyes of your staff.

Legal and compliance requirements: Your employees are not the only ones who expect you to keep this data safe–so does the government. The difference is that if you fail to do so, you will face fines and penalties.

 As you can see, all the data mentioned above is sensitive by its very nature.

Alternative ways to compensate your employees

Before continuing, we must stress that not all exchanges between companies and employees happen via fiat currency.

This makes matters even more complex. Here are a few such examples, as well as tools that are used for these “unique” types of compensation.

Equity rewards and equity management software

Some companies reward their employees in equity. For this, you’ll need an equity management software

employee

A great thing about these platforms is that you can integrate them with the rest of your HR and payroll tools, creating a closed financial system that will be much easier to protect. 

Generally speaking, equity rewards are a great way to give your employees a sense of ownership.

In a way, it makes them work harder than performance-based pay since it makes them care about the entire company's performance, not just their performance. 

Another thing it does is encourage longer working relationships. When they own a part of the firm, they are a part of it.

You must keep in mind that rewarding your employees with equity isn’t necessarily the simplest thing from legal and accounting standpoints. 

Namely, when rewarding your employees, you must ensure the process passes necessary regulatory compliance (like ASC 718 in the US). 

Crypto payments and crypto payroll platforms

It shouldn’t come as a surprise that many companies in 2023 decide to pay their employees in crypto. Now, keep in mind that the legality of this varies by jurisdiction. 

There’s also a fact that cryptocurrencies are treated as property or income in some areas, which is why they are taxable.

Also, in most jurisdictions, your employees need to explicitly agree to this form of payment. 

This process is best handled through a specialized crypto payroll platform, which should simplify things and ensure that you take all of this compliance in mind.

As for the reasons why one would want to be paid in crypto, the list is quite lengthy. For instance, we live in an age where remote employees are hired globally, and cross-border payments are far easier to make in crypto. 

The settlement is quicker, the transaction fees are lower, and by enabling this option, the companies are becoming more accommodating to their employees. 

The cybersecurity threats are growing bigger

First of all, the number of people in the digital world is getting bigger and bigger.

A few decades ago, the only people who were online were, by default, more tech-savvy than the rest of the planet. Today, this is no longer the case.

Second, since online businesses are getting bigger and bigger, they’re becoming a more lucrative prize for hackers. 

Also, that the number of businesses that do business exclusively online grows with each passing day. For instance, the number of e-commerce and dropshipping businesses is at an all-time high. 

The same thing goes for the alternative media and the blogosphere. You would be surprised to learn how much money some blogs make and to sustain this performance, they need a decently-sized staff and a big payroll. 

What are the most common payroll cybersecurity vulnerabilities?

When talking about payroll security vulnerabilities, it’s incredibly important to understand where the threats are coming from. Namely, some of the biggest cybersecurity vulnerabilities are:

security cyber

Weak password: Regardless of which platform you’re using, you need to register an account, which means you need a password. The username is interchangeable with your email on most of these platforms, which is easy to find.

If you have a weak password, it’s incredibly easy to access an account.

Outdated software: This is generally a huge cybersecurity threat, not exclusive to payroll platforms. You see, hackers develop methods that exploit the gaps in the current system. 

With each new patch, some of these gaps are fixed, and they need to find new ones. The problem is that if you fail to update the system, this door remains wide open.

Lack of access control: Not all problems are coming from the outside. Just think about it: are you telling every single one of your employees (even those in entry-level posts) everything? Probably not. 

You need to limit access to sensitive information so that other people’s incompetence, negligence, or maliciousness doesn’t endanger your entire organization.

Lack of proper training: Cybersecurity is a field that few people understand intuitively. Without proper training, your staff will not be able to meet these challenges.

Understanding these hazards will help you devise a strategy to fix the problem. Speaking of strategies…

What are the best data privacy practices and cybersecurity strategies for payroll platforms?

Based on some of the problems we’ve listed previously, it shouldn’t be too hard for you to figure out what areas these strategies will address. For instance:

Intrusion detection and prevention: Even the best password can be lost or blurted out, which is why it’s so important that you have the tools that can detect and prevent an intrusion. Early detection is sometimes as good as prevention.

data breach

Penetration testing: Theory will only get you so far. Sometimes, you want to see how well your system can hold up in practice. So, you hire a white-hat hacker and ask them to help you see if you have any gaps in your cybersecurity.

Training and awareness: People are always weak links, no matter how reliable the platform is. Therefore, you need to invest some time and practice into training your employees. You also want to raise awareness of some of these problems so that they can keep an eye out.

Safer file-sharing practices: Another thing to consider is the sharing practices. Namely, teaching your employees about the importance of only sharing files through secure channels with decent encryption. 

Endpoint security: Since it all takes place online, it’s sometimes easy to forget that a device can be a weak point. 

To avoid this from becoming a huge problem, take all the measures to secure computers and mobile devices. This also involves coming up with a decent BYOD policy.

Ultimately, having a contingency plan and acknowledging that the threat exists is not pessimistic - it’s realistic.

Protecting your payroll information is essential to the survival of your business

The best thing about these methods to protect your payroll information is that you can use them to protect sensitive data. With cybersecurity threats getting increasingly serious, you must become more invested.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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