Data security - are we whiter than white?

Many of us joined the MP's audible gasps of astonishment when Alistair Darling announced the child benefit data blunder to the House of Commons, but can all payroll departments take the moral high ground when it comes to data security?

It’s a timely reminder that there are simple steps that we should take to protect the integrity of the personal data of our employees that we are entrusted with. Whilst our companies maybe registered with the Information Commissioner as data controllers, the payroll/HR departments are far and away the greatest processors of that data.

Some data security measures are so obvious that we don’t give them a moment’s thought. For example, what physical security is there in the payroll department? Can anyone from the organisation wander in and see confidential data on desks and screens whilst they discuss their personal salary query, or do you have a reception desk or surgery arrangements to deal with such queries? Many payroll offices are locked at the end of the working day only for the cleaners, potentially even not employed by the company, to be given unsupervised access – what might they see that’s been left in in-trays or in unlocked filing cabinets?

What routines do we use when unsolicited callers are put through to the department. The Information Commissioner’s website gives some horrific examples of the techniques used by professional ‘blaggers’ to get personal data from employers that they can then sell on. Such individuals will do their homework and find out for example which tax office you deal with making it very plausible to ring up purporting to be from HMRC and asking for employee data. It might seem tedious but all authorised callers should be given a password that is changed regularly that has to be quoted before data is released. Without that, all callers should routinely be called back to establish their true identity. And on the subject of system passwords don’t share them around the office or forget to delete access when staff leave.

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Government gets tough on illegal working

The long awaited penalty regime enshrined in the 2006 Immigration, Asylum and Nationality Act will come into force on 29 February 2008.

The Border and Immigration Agency (BIA) are proposing a maximum civil penalty of £10,000 for organisations who are lax in checking prospective employees’ right to work in this country.

In addition there will be a new criminal ‘knowing’ offence, carrying a maximum two-year prison sentence for employers who deliberately employ illegal workers.

The document list introduced in May 2004 and known as the section 8 defence will be updated to reflect the most current and secure right to work documents. However, retrospective checks using the new document lists will not be required for those employed before the new rules take effect.

The regulations (The Immigration (Restrictions on Employment) Order 2007 SI. No 3290) emphasise the importance of checks being carried out before commencement of employment. There are different lists of acceptable documents that an employer must check. Additionally new recruits with time-limited leave to remain in this country will require follow up checks every twelve months.

The BIA’s Employer Checking Service can be used to ascertain the current status of those with outstanding applications in certain ‘leave to remain’ categories – this can be accessed at

www.ind.homeoffice.gov.uk/lawandpolicy/

preventingillegalworking/employersupport/ecs/

Two new draft codes of practice have been published to assist employers with the new rules. The first assists employers with avoiding racial discrimination while complying with the Act and is at www.ind.homeoffice.gov.uk/6353/

18383/18469/antidiscriminationcode_nov07.pdf. The second provides guidance on the new civil penalty and the required document checks: www.ind.homeoffice.gov.uk/6353/18383/

18469/civilpenaltiescode_nov07.pdf.

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NICs bill published

The National Insurance Bill that will introduce the new Upper Accrual Point (UAP) and the alignment of the Upper Earnings Limit (UEL) with the higher rate tax threshold from April 2009 has been introduced into the House of Commons.

 

In order to align the UEL and 40% threshold, the formula that currently dictates that the UEL is seven and a half times the Earnings Threshold must be abolished. For 2008/09 the UEL has been increased by £100 per week to £770. This is £75 per week above the rise dictated by the retail prices index, but this still falls within the current formula. State second pension (S2P) is accrued based on earnings in three different bands. To move towards flat rate entitlement rather than earnings based accrual, S2P entitlement will cease at the new UAP, which be will be frozen so that the earnings related accrual will be gradually eroded. It is expected that flat rate accrual will be achieved by 2030.

 

The UAP will be set at £770 (the 2008/09 UEL) and earnings above this point will no longer attract the NICs rebate for those in contracted-out pension schemes. Full rate NICs for both employer and employee will be due from the UAP to the UEL. Consequent changes are also necessary to the process for the aggregation of earnings for NICs purposes .

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Effective date for new tax rates

As the removal of the 10% tax band and the reduction in the basic rate to 20% were announced in this year's budget they will come into effect for the start of the tax year on 6 April 2008.

The 40% threshold will of course not be announced until the 2008 budget, so the current threshold of £34,600 will remain until the new figure is brought in. Assuming the budget takes place in March, it is normally bought in at week 7.

New paper tax tables will be available in December and with the removal of the 10% band will be renamed ‘Tables B- D’. These new tables should be used from 6 April 2008 until any new tables are issued post Budget 2008.

 

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