Secure Payroll – What to consider for payroll

Payroll management is a critical part of any business, ensuring that employees are compensated accurately and on time. In today’s digital landscape, where data breaches and cyber threats are becoming increasingly common, securing payroll information has become imperative for businesses of all sizes.

Ensuring the security of payroll data not only protects sensitive employee information but also safeguards the company’s reputation and compliance with Australian payroll legislation.

The Importance of Keeping Payroll Secure

Safeguarding payroll data is not only a matter of good business practice but also a legal requirement. Australian payroll processes are governed by legislation that mandates the protection of employee information.

The Privacy Act 1988 establishes principles for handling personal information, which includes employee data. The act requires businesses to take reasonable steps to protect sensitive information from unauthorised access, use, or disclosure.

Additionally, the Fair Work Act 2009 mandates accurate record-keeping of employee wages and entitlements. Ensuring the security of payroll data is crucial for compliance with this act, so that it is not edited, falsified or made eligible.

What Makes Payroll Secure?

Secure payroll systems are characterised by their use of powerful security measures at various levels. These measures encompass both technical and procedural aspects that collectively contribute to safeguarding payroll data.

Choosing the right payroll software is paramount to ensuring security. Reputable payroll software providers adhere to tight security practices. Features to look for include:

• Encryption: Payroll software should employ encryption protocols (such as SSL/TLS) to secure data transmission between users and servers, preventing unauthorised access.
• User Access: Role-based access control ensures that only authorised individuals can access sensitive payroll data. This reduces the risk of internal breaches.
• Regular Updates: Software updates often include security patches that address newly discovered breach or security vulnerabilities. Keeping your software up-to-date is essential to stay protected

Data Hosting​

Selecting the appropriate hosting option for payroll data is another crucial consideration.

• Cloud Hosting: Cloud-based payroll solutions offer security benefits such as data redundancy, automated backups, and tough security protocols implemented by cloud service providers.
• On-Premises Hosting: Some businesses choose to host their payroll data on-site. While this provides more direct control, it requires diligent security measures and dedicated personnel to protect against physical security breaches.

Security Measures to consider implementing

Two-factor authentication: This is an additional layer of security by requiring users to provide two forms of verification before gaining access to a software. This could include a password and a unique code sent to the user’s mobile device, via SMS or email, or using an authentication app.

• Regular Audits: Conduct regular security audits and stress testing to identify vulnerabilities and areas for improvement. This allows the business to address any identified issues promptly.
• Employee Training: Educate employees about security best practices, including strong, unique passwords and utilising password management software. Training employees how to identify phishing attempts is also imperative.
• Data Encryption: Encrypt sensitive payroll data both in transit and at rest. This ensures that even if data is intercepted, it remains unreadable without the decryption keys that have been set.

Data Hosting​

Selecting the appropriate hosting option for payroll data is another crucial consideration.

• Cloud Hosting: Cloud-based payroll solutions offer security benefits such as data redundancy, automated backups, and tough security protocols implemented by cloud service providers.
• On-Premises Hosting: Some businesses choose to host their payroll data on-site. While this provides more direct control, it requires diligent security measures and dedicated personnel to protect against physical security breaches.

Security Measures to consider implementing

Two-factor authentication: This is an additional layer of security by requiring users to provide two forms of verification before gaining access to a software. This could include a password and a unique code sent to the user’s mobile device, via SMS or email, or using an authentication app.

• Regular Audits: Conduct regular security audits and stress testing to identify vulnerabilities and areas for improvement. This allows the business to address any identified issues promptly.
• Employee Training: Educate employees about security best practices, including strong, unique passwords and utilising password management software. Training employees how to identify phishing attempts is also imperative.
• Data Encryption: Encrypt sensitive payroll data both in transit and at rest. This ensures that even if data is intercepted, it remains unreadable without the decryption keys that have been set.

What to ask your payroll software provider?

Whether you’re considering a new payroll software, outsourcing your payroll, or looking at your current software, ensuring the security of sensitive payroll data should be a top priority. Asking the right questions about security can help you make an informed decision and choose a software solution that aligns with your security needs.

What Security Measures Are in Place?

Inquire about the specific security measures the software or service implements. Look for features like data encryption, regular security updates, and who has access to your data.

Is Data Encrypted?​

Ask whether the software or service uses encryption to protect data both during transmission (e.g., when employees access their payroll information) and while it’s stored.

How Is User Authentication Handled?​

Learn about the methods of user authentication the software uses, such as two-factor authentication (2FA), which adds an extra layer of security.

Where Is Data Hosted?

If the software is cloud-based, inquire about the data hosting infrastructure. Reputable providers use secure data centres and follow industry best practices for data protection.

What Access Controls Are in Place?​

Understand how the software allows you to manage user access. Role-based access control ensures that only authorised personnel can access specific data.

Do You Have a Privacy Policy?

Request information about the software provider’s privacy policy. A well-defined policy outlines how they handle and protect your data.

Is the Software or Service Compliance-Certified?​

Inquire if the software complies with relevant industry standards and regulations, such as ISO or local data protection laws. For Australian businesses, compliance with the Privacy Act 1988 is critical.

How Is Employee Data Handled After Termination?

Understand the process for handling employee data once they leave the company. Record keeping compliance and secure deletion processes are important here.

What Training and Support Are Provided?​

Adequate user training can prevent security breaches resulting from user error. Ask about the training and support resources the provider offers.

About Employment Innovations

Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.

Disclaimer

The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.