How to Secure Payroll Records?

How to secure payroll records? This article explains ways to safeguard payroll records, from former employees and unauthorized inquiries, from the risk of theft or external hacker compromise. You may also want to separate your payroll tasks, such as letting one employee handle time cards and another handle payroll and letting a third person issue pay stubs. For example, suppose you only have one person managing payroll and issuing pay stubs. In that case, you might want to create separate accounts for the different parts of the payroll process.

Keeping payroll information confidential

Payroll information can be sensitive and may contain social security numbers, addresses, and financial details. Mistakes can be disastrous. Payroll confidentiality policies should outline who has access to certain documents, including those pertaining to salary negotiations. In addition to listing who can see the documents, policies should specify who is authorized to audit the company’s payroll. This can help prevent minor misunderstandings and unauthorized access to payroll information. This article outlines some of the best practices to follow to protect the confidentiality of payroll information.

Payroll data security threats can come from an outside source, an insider, or even a mistake. However, regardless of the source, payroll data security is critical to the smooth functioning of a payroll department. The company’s payroll software program together with payroll information should abide by the data privacy act and other federal regulations. 

Keeping payroll records in a secure location

One of the first steps in ensuring payroll security is establishing strict employee guidelines. Typically, individual employees should have access to their records, while other employees should have limited access. The workplace should also keep a locked filing cabinet for payroll records. Employees should also be asked to sign a confidentiality agreement before accessing payroll records. Maintaining payroll records in a secure location will reduce the risk of theft or fraud.

In addition to storing payroll records offsite, organizations should consider how to dispose of them. Hard copies of payroll records should be maintained separately and securely. Records should only be accessible by authorized personnel. If paper documents are required, businesses can hire a document destruction company to do the job for them. Offsite storage facilities are also a good choice, as they can protect sensitive employee information. Further, suppose a business has a large payroll file volume. In that case, it is a good idea to store it electronically and back it up regularly.

Keeping payroll records from former employees

Businesses must keep payroll records for a period mandated by law to protect sensitive data. After that time has passed, these records may be destroyed. Maintaining these records is essential to protect confidential information from theft or misuse. Businesses also need to know state-specific requirements regarding records retention. For example, some states require businesses to store payroll records in a particular place for seven years. If your company does not meet these state laws, consider using a third-party service to keep these records.

It is also essential to back up payroll records in a system crash. Create a backup policy that outlines what information needs to be backed up and when. Make sure backup passwords are unique and contain letters, symbols, and numbers. They should not be similar across different platforms. Encrypt backup data. Employees should position their computer screens so unauthorized individuals cannot view them. Employees should log off before leaving their workstation to prevent unauthorized access to payroll systems. Additionally, check-out policies should include blocking computer access and terminating passwords for former employees.

Keeping payroll records from unauthorized inquiries

There are many reasons for keeping payroll records. First, the IRS can seize personal assets. The IRS can also press criminal charges if you fail to keep payroll records. Third, the FLSA guidelines do not specify the proper format for maintaining payroll records. So, you should judge your retention period based on applicable laws. But whatever you decide, you must maintain accurate records that you can’t lose to unauthorized inquiries. This article outlines the top reasons to keep payroll records.