Preparing Your Business to Comply With New York State’s SHIELD Act

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As we begin a new year, organizations should continue to be prepared to address challenges arising from the ongoing proliferation of cybersecurity threats that wreak havoc on businesses and customers. In response to an increase in cybersecurity incidents, a number of state and federal laws have been passed, including New York State’s recently enacted “The Stop Hacks and Improve Electronic Data Security Act,” commonly referred to as the “SHIELD Act”.

The SHIELD Act’s provisions are not effective until March 21st of this year. This means, organizations still have time to review their existing practices and cybersecurity policies to minimize exposure to data breaches and to ensure compliance with applicable laws, including the SHIELD Act.

This communication is intended to summarize the material provisions of the SHIELD Act (and other relevant cybersecurity laws that may impact you) and to assist you in determining whether you need to comply with the new law. We have also proposed certain best practices that can be implemented to minimize the likelihood of a cybersecurity incident and to ensure compliance with relevant cybersecurity laws.

What is the SHIELD Act?

The SHIELD Act imposes requirements that are aimed to reduce the likelihood of data breaches by requiring certain individuals, businesses and organizations to adopt preventative cybersecurity programs.

Any individual, business or organization (including non-profit organizations) that owns or licenses computerized data which receive, collect, or maintain “private information” of New York residents must comply with the law. In practice, this means every employer in New York must comply with the SHIELD Act, as in all likelihood the employer will possess, at a minimum, “private information” relating to its employees.
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