Previously, protecting data was the responsibility of the employer, but now the payroll software provider shares this responsibility. WARREN VAN WYK, co-founder and director, Payspace discusses General Data Protection Regulation (GDPR) on payroll.
The most significant update in data protection legislation will come into effect in May this year. The General Data Protection Regulation (GDPR) has a very specific mandate: to provide greater personal data protection. The legislation applies to all individuals within the European Union (EU), and covers all information that could identify them, both directly or indirectly.
As a South African based business, you may think GDPR doesn’t apply to you. But this is not necessarily the case. GDPR may be EU legislation, but it affects any company that has business interests in the EU, or that employs EU citizens. Given the multinational scope of business in today’s globalised market, companies don’t stay domestic-only for long. If your company is already international, or is in pursuit of growth, then it’s crucial that you comply with GDPR sooner rather than later. There are severe penalties for non-compliance that simply aren’t worth the risk.
How will this affect HR and payroll teams?
Payroll and HR departments process huge volumes of personal information. There is no doubt that GDPR will disrupt how things are currently done. HR and Payroll managers will have to take on new responsibilities to make sure that their processes comply with the legislation.
Additional responsibilities will include having to issue privacy notices to employees and job applicants that clearly outline how their personal information will be used and if it will be used outside the EU. Any transfer of data out of the EU can only be done with regulatory approval. If there is any security breach, payroll managers have 72 hours in which to alert the data protection authorities.
Fortunately, these new pressures can be shared. If your company outsources its HR and payroll processes for example, then the in-house team and the provider share the responsibility of ensuring GDPR compliance. Your data controller will oversee adherence to GDPR’s core principles, and the payroll provider will support this with technical and organisational measures, such as data encryption and secure storage.
GDPR is making businesses around the world reassess their data security measures and pay more attention to their current processes. This enhanced security consciousness is setting a new global standard. This means that, even if your business isn’t legally obliged to comply with GDPR, you should still make sure your company’s data protection is up to scratch. This will help you remain competitive and avoid any potential reputational damage.
To properly assess your company’s current data security measures, and prepare for GDPR, you need to review your entire payroll process. Take it apart step-by-step and determine how the system does or does not meet the legislative requirements – and what can be done to improve it. Of utmost importance is knowing who of your employees is in direct contact with sensitive information, and how do they collect, store, archive and destroy data.
A critical question to ask is: could you reduce the number of employees that have access to sensitive information? This will mitigate risk significantly. Industry best practice also calls for companies to only gather and use the data they need to perform their business. Give your dusty data archives a clear-out and put in place processes that focus on using and storing relevant information.
When it comes to GDPR, the best approach for South African businesses (whether they are directly affected by it or not), is to view it as a global call for enhanced data security. Getting your business GDPR compliant sooner rather than later will only serve you in the long run. Adjusting to a change in legislation can be challenging. So, make sure your payroll software is secure and that the provider you work with is GDPR compliant and you’ll be halfway compliant in no time.