Wearable technology continues to do a full court press on the marketplace and in the process, the step counters of the world and health apps tied to devices capable of tracking real-time biostatistics, are revolutionizing the way companies think about wellness. Wearables are the latest in workplace fads and they’ve got the numbers to back it up: sales are likely to hit $4 billion in 2017 and 125 million units are likely to be shipped by 2019. Wearable technology has transformed the workplace just as more and more employers are utilizing wellness programs to improve employee motivation and health. As the popularity of these technologies soars, so too will concerns around the associated privacy and data security risks. In this blog post, we discuss just a few of the legal implications for employers who run wellness programs embracing this new fad. Continue Reading March Fadness: Wearable Tech in the Workplace and Privacy
We are well into March Madness … and Happy St. Patrick’s Day!
You may have already had your bracket busted by now…..but you should have Mintz Levin’s Third Annual Employment Law Summit on your schedule and the panel on Cybersecurity and Employee Data Breaches may help you avoid a security incident/personal data buster.
Teamwork is a key to advancing in the Big Dance and HR and IT could make a powerful team in fighting cybersecurity risks in your company. Just because cybersecurity threats affect cyberspace does not take the human element out of the prevention/mitigation loop. And the Luck of the Irish has nothing to do with it……
Even though IT plays the role of the center in managing the game flow with respect to the company’s data security, the HR department should not sit on the bench. HR has the point guard skills necessary to mitigate important insider threats and properly train the rest of the team to play it safe.
Businesses are a treasure trove of information about people – customers, employees, business contacts. Loss or theft of any of these can cost a company both in cold cash and in reputation. We’ll take a look at the crazy-quilt of laws and discuss how HR managers and counsel can make the important connections between HR professionals and security professionals and keep your company in the game.
We hope you will join us in New York on April 6th as our panel ventures into cyberspace. Please remember to register here, as you won’t want to miss this important event.
It’s that taxing time of the year. Employees have received W-2 forms and the tax filing season has begun in earnest. And, as night follows day, last year’s W-2 spear-phishing scam has returned. The IRS and state tax authorities have issued a new alert to HR and payroll departments to beware of phony emails intended to capture personal information of employees. The emails generally appear to be from a senior executive (typically the CEO or CFO) to a company payroll office or HR employee and request a PDF or list of employee W-2 forms for the tax year. Those forms contain all the information any cybercriminal needs to file a fraudulent tax return for a tax refund. That scam cost the US taxpayer about $21 billon in 2016. Over 70 companies fell victim to the 2016 scam and hundreds of thousands of employee records, including Social Security numbers, were compromised.
To refresh your memory, here are some of the details that may be contained in the emails:
- Kindly send me the individual 2016 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review.
- Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary).
- I want you to send me the list of W-2 copy of employees wage and tax statement for 2016, I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me asap.
We’ve already seen some activity on this front being reported from around the country. These incidents not only create angst for employees, but they constitute data breaches reportable under state law because personal information has been exposed to an unauthorized (and unknown) individual and the risk of identity theft is high. Last year’s incidents also resulted in class action lawsuits by employees against some of the victimized companies.
Employees Are Front Line of Defense
These emails look absolutely legitimate. That is what makes them so effective. The header of the email may look exactly as one would expect, mirroring the company fonts, duplicating automated signature blocks, and containing the actual email address of the spoofed executive in the “From:” line. Often, the return email address won’t even be visible until after the reply is sent unless the user specifically expands the address field. If you look carefully, it is likely that the domain name is a few characters “off” from the company’s legitimate domain name, such as substituting the number one (1) for the letter “l” or replacing a “.org” with a “.com”. The more sophisticated attacks may utilize information obtained from LinkedIn® or social media designed to lull the target into a false sense of trust.
Awareness of these attacks and the problem is the key for employees.
Train employees — particularly HR and payroll employees — who handle sensitive information to be wary of direct requests for personal information from company executives. Send out samples of such emails and establish a campaign to raise employee consciousness. A bit of skepticism goes a long way in protecting against this type of attack. Confirmation of this type of request should be standard operating procedure, no matter who appears to have sent it. Your company’s IT department should also be monitoring for phishing trends and remaining on the alert for suspicious outgoing activity, including large files or attachments.
Ask. Since we have already seen reports of these attacks very early in this tax year, it is time to check in and insure that your company has not already fallen victim. It’s important to respond quickly to reduce total damage to the organization, and most importantly, to your employees. Affected individuals can protect themselves with certain forms filed with the IRS – but it’s only effective if they know soon enough.
The Mintz Levin Privacy team is here to help with employee training or preparing a plan to respond to an incident.
The FBI warned this summer that the “Business Email Compromise” (“BEC”) scam continues to grow, evolve, and target businesses of all sizes. As reported by the FBI in June, the scam had hit more than 22,000 victims for a combined dollar loss of greater than $3 billion – that’s billion with a B! And the latest evolution is even more threatening, potentially causing breaches of protected data.
What is the BEC scam? Why have so many been taken in? And how can you protect yourself?
The BEC scam is a smart, targeted scheme using emails that appear genuine, usually seeming to originate from within the victim’s company or from its suppliers/contractors. For example, the company’s CFO may receive an email that seems to come from the CEO, urgently directing funds to be wired to a specified account for a seemingly legitimate purpose. Or the email may appear to come from a supplier or contractor and seek payment on an invoice that appears legitimate. If the company wires funds as directed, the funds are transferred offshore and become unrecoverable.
The scam has been highly effective because BEC emails mimic legitimate requests. The perpetrators research their victim to learn its protocols, its counterparties’ names, its payment methods, etc. They often use social engineering techniques (e.g., phishing emails requesting info) to learn details about the targeted business. The successful perpetrators learn which individuals are necessary to perform wire transfers and what protocols are used. They may learn when the CEO is traveling, so that an email from the CEO directing payment would not be questioned. The perpetrator may have hacked and used a valid email account for this purpose, or may have established an account with a similar domain name. Their level of sophistication has enabled the theft of billions of dollars.
Earlier this year, the FBI started receiving reports that this highly successfully scheme has evolved into a means to obtain confidential information, leading to data breaches. For example, an email request to the human resources department may prompt the disclosure of W-2 forms or other confidential, personally identifiable information (“PII”). The FBI reports that victims have fallen for this new data-theft BEC scenario, even if they were able to successfully identify and avoid the traditional BEC scam.
We all have learned (hopefully) not to click links in suspicious looking emails. But trusted emails receive less scrutiny. What steps can you take to avoid being hit?
- If an email is directing payment by wire or seeks protected information, it merits special treatment.
- TRAIN employees and establish clear protocols for wire transfers and data privacy.
- Beware of sudden changes in business practices. Require secondary sign-off by company personnel when a change in payment method is requested.
- Always verify requested changes via other channels. Don’t click “reply”. Instead, call the sender to verify; and use a trusted phone number, not a phone number appearing in the email. Or forward the email to the sender after typing a trusted email address, and seek confirmation.
- Be suspicious of requests for urgent action or secrecy.
- Create intrusion detection system rules that flag e-mails with extensions that are similar to company e-mail.
- In addition, diligently maintain data and email security. Educate employees to be alert to social engineering situations, and to delete phishing emails. Establish two-factor authentication for email accounts.
If you have questions about how to train employees and avoid these phishing scams, contact a member of the Mintz Levin Privacy team.
The number one threat to a company’s information (personal or confidential) is still its own employees. Data security and privacy training are the first lines of defense against negligent employee behavior.
Join us tomorrow (6.22) at 1 PM ET for a webinar in which we will explore why traditional training programs are falling short and what you can do to boost your efforts and counter top concerns regarding malicious and negligent employee handling of personal and confidential data.
CLE credit available in NY and CA
Mintz Levin’s Immigration Law Blog is running a series titled “Innocents Abroad” addressing issues in an increasingly globalized economy where employers assign employees all over the globe.
These are big questions, reflecting some of the practical concerns in our international marketplace. The series focuses on the well-intentioned Global HR Director, Ned Help, who will raise hot topics and difficulties his company faces when sending their employees abroad. We will then explore the common pitfalls and offer practical solutions to the difficulties Ned Help faces. This month’s edition: Privacy Considerations – follow the rest of the series at Innocents Abroad.
From: Carrie Counselor
To: Ned Help
Date: May 24, 2016
RE: Privacy considerations for employees working abroad
I understand that one of your employees will be engaging a six-month temporary assignment around Europe to scope market opportunities, and you’d like to have a better understanding of what to be thinking about in terms of privacy. Great question! This is an area where many employers struggle because other jurisdictions protect privacy and personal data quite differently than we do here in the United States.
Generally speaking, federal and state laws applicable to employee information do not have “extraterritorial” effect beyond the information that remains in the United States, meaning that American employees working abroad (even temporarily) will not benefit from US legal protections with respect to personal information collected, stored or transmitted outside of the country.
What makes this area of the law particularly crucial and daunting for employers is that non-US countries frequently offer greater protections to employees and establish far higher compliance obligations on the part of employers. Of particular concern for you should be the data protection landscape across the European Economic Area (referred to as the “EEA,” encompassing all European Union (EU) Member States as well as Iceland, Liechtenstein and Norway) because each country has passed its own set of national laws governing the collection, use, retention and transmission of personal data. Companies must consider these local laws before electronically monitoring an employee outside the United States or transferring an employee’s personal information back home. Let’s talk specifics: Continue Reading Innocents Abroad: Privacy Considerations for Employers
There’s no doubt businesses in the EU and US would breathe a sigh of relief if a new Safe Harbor agreement is put in place between before European data protection authorities start prosecuting companies for potentially illegal personal data transfers to the US. But if it doesn’t happen, the US is actually not any worse off than most of the rest of the world. No other country has a special agreement with the EU concerning personal data transfers, and only eleven countries have been deemed to be “adequate” by the European Commission: Andorra, Argentina, Canada (commercial organizations only), Faeroe Islands, Guernsey, Israel, Isle of Man, Jersey, New Zealand, Switzerland and Uruguay.
Only one of the countries on the “adequate” list, Switzerland, is a “top ten” EU trade partner, according to the latest trade statistics published by the Commission (based on 2014 figures). Only two of the countries are in the top twenty (Canada is in twelfth place). Japan, India, Brazil, Turkey, South Korea, all “top ten” EU trade partners, are not on the “adequate” list. Nor is China or Russia, both of which have significant trade with the EU (coming in second and third in the “total EU trade” rankings published by the Commission). So if the US isn’t on the “adequate” list, it is no worse off than most other major EU trade partners. Continue Reading (So) What if there’s no Safe Harbor 2.0?
The European Court of Human Rights recently ruled in Bărbulescu v. Romania (Application no. 61496/08) that a Romanian employer did not violate its employee’s fundamental right of privacy when the employer accessed personal messages in the employee’s Yahoo! Messenger account. Numerous newspapers and other media sources quickly declared employee privacy dead as a result of the ruling – and the Court was sufficiently alarmed by the mischaracterization of the case that it issued a press release refuting the media accounts. (The Guardian published a rather entertaining article about the inaccurate media coverage with photos of various front-page announcements by its competitor newspapers.)
In fact, the Bărbulescu case is so specific to the somewhat unusual facts that it does more to show how limited the circumstances in which an employer can access personal communications of its employees. For a more down-to-earth take on the case, take a look at Law360’s analysis here. The take-away for employers is that it is vital to consult local employment lawyers first before engaging in any monitoring of employee communications, to make sure that your company’s policies and actions meet local requirements as well as the case law of the European courts.
“Wetware” – coder slang for biological life forms (i.e., people) – is the weak link in most companies’ data security protections, according to a new data security report issued by the Association of Corporate Counsel (ACC). Companies surveyed attributed data breaches to a host of human foibles, including lost laptops or devices (9%), “phishing” emails that induce employees to click on malicious links or open infected documents (12%) or simple “employee error” (24%). A distressing 15% were classified as inside jobs.
The full report can be obtained from the ACC.
The ACC report highlights the paramount importance of employee training to a company’s data security program. The strongest and most assiduously updated firewalls and malware detection systems cannot stay ahead of every newly-crafted piece of malicious code. Training employees in best practices with respect to email and data handling provide an additional bulwark against threats that data security technology simply cannot root out. It’s no accident that the mantra of most data security professionals is “People, Process, Technology” – in that order.
Watch out for your weakest link!
As expected, the EU Parliament’s Committee on Civil Liberties, Justice and Home Affairs (also known as LIBE) voted today to adopt the new General Data Protection Regulation (see the summary we provided yesterday here). A LIBE press release announced the vote with the proclamation “New EU rules on data protection put the citizen back in the driving seat.” The vote was 48 for the GDPR, 4 against, and 4 abstentions. The GDPR will go to a vote of the full EU Parliament in March or April of 2016. It is expected to be passed based on LIBE’s endorsement.
Companies will have a grace period of two years to come into compliance, measured from the date that the GDPR is formally adopted and published in the Official Register. That means that the key compliance date will probably fall in March or April of 2018. Given the complexity of the 200 page Regulation and the likely need to audit and change business processes throughout organizations, we recommend starting the compliance review process immediately.
We will announce a series of webinars to drill down on specific topics under the GDPR early in the new year.