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How to Safeguard Employee Data

By Rosanna Sattler and Nancy Puleo

Employers should be aware of the rapid growth of data privacy and security laws, which may affect their methods of conducting business and handling personal employee information. The new laws carry with them a private right of action in some cases, civil penalties as much as $500,000 and in some states, administrative investigations.

Privacy is a hot-button issue. Since January 2005, nearly 246 million records containing personal information have been compromised. See http://www.privacyrights.org/ar/ChronDataBreaches.htm. (Web site last viewed on Feb. 5, 2009). In 2008, the Federal Trade Commission (“FTC”) reported that for the eighth year in a row, identity theft topped the list of consumer fraud complaints. See http://www.ftc.gov/opa/2008/02/fraud.shtm (Web site last viewed on Feb. 5, 2009). According to the FTC, victims of identity theft spend 175 hours and approximately $800 to clear their names and restore their credit following theft of their identity, depending on how soon they discover the theft. See Id.

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