Is your Work Opportunity Tax Credit provider protecting your data?
Now more than ever, it is crucial to ensure that your Work Opportunity Tax Credit (WOTC) vendors use your data only for the purpose of processing WOTC. Many vendors offer other services such as credit bureaus, payroll services, and more. You must take specific steps to protect your data and ensure that it isn’t being used inappropriately.
The WOTC program involves sensitive information, so it’s essential to establish clear guidelines and safeguards. Here’s how you can help ensure your WOTC vendors use your information appropriately.
1. Select a reputable vendor
Choose WOTC vendors that have a proven track record of handling sensitive data securely and have a good reputation in the industry. Look for vendors with appropriate certifications and compliance with data protection regulations. Vendors who only do WOTC and other employment-based tax incentives can be the better choice since you know that they aren’t using your information for other purposes without your knowledge.
2. Sign confidentiality agreements
Before sharing any sensitive data, require your WOTC vendors to sign confidentiality or non-disclosure agreements. These agreements legally bind the vendors to keep your data confidential and only use it for the specific purpose you’ve outlined.
3. Limit data sharing
Share only the minimum amount of data necessary for processing the WOTC program. Avoid providing additional unnecessary information that is not directly related to the program.
4. Practice data encryption and take security measures
Ensure that your WOTC vendors use robust data encryption techniques when transmitting and storing your information. Inquire about the security measures they have in place to protect data from unauthorized access.
5. Audit and review regularly
Conduct periodic audits and reviews of your WOTC vendors to ensure they are complying with the agreed-upon terms and protecting your data as required. Review their data protection policies and practices.
6. Establish clear data retention policies
Establish clear data retention policies with your vendors. Specify how long they can retain your data and require them to delete or securely dispose of the data after the required retention period.
7. Monitor data access
Restrict access to sensitive data to authorized personnel only. Implement monitoring and access controls to prevent unauthorized access.
8. Build a data breach response plan
Ensure your WOTC vendors have a well-defined data breach response plan in place. This plan should outline how they will handle and notify you in the event of a data breach.
9. Review privacy policies
Carefully review the privacy policies of your WOTC vendors to understand how they handle data and ensure they align with your data protection requirements.
10. Stay informed about regulations
Stay informed about data protection regulations and compliance requirements relevant to your industry and location. Ensure that your WOTC vendors are also compliant with these regulations.
11. Practice open communication
Maintain open communication with your WOTC vendors. Discuss your data protection expectations and address any concerns you may have.
12. Work with us
Arvo is SOC-2 certified, which proves we go the extra mile to handle our clients’ data responsibly.
We invite conversations with current or prospective clients about our cybersecurity practices, because we understand the importance of trust in our client relationships.
If you have any questions about how we keep your data secure, our team of tax and security experts is always available with answers.