The cyberattack against human resource company Ultimate Kronos Group has triggered a wave of wage-and-hour lawsuits against employers, highlighting the scope of potential liability associated with relying on third-party software for payroll functions.
Workers have filed nearly 20 proposed collective actions alleging violations of the Fair Labor Standards Act since the Kronos hack was disclosed in December, including lawsuits against PepsiCo Inc., Olin Corp., and Marriott International Inc.
U.S. government officials have warned of potential Russian cyberattacks against private companies, adding to the hacking hazards that firms face.
Lawsuits alleging privacy violations, breach of contract, and negligence are common following data breaches. Plus, the wage claims filed in the wake of the Kronos ransomware attack show that software disruptions can carry their own risk.
“While employers can outsource the payroll function, they cannot outsource liability for violations of the FLSA or state or local laws,” said Jonathan Segal, an attorney at Duane Morris LLP who represents companies. “Unfortunately, ransomware and other forms of cyberattacks are becoming more frequent. The question is: How does an employer mitigate the risk that such attacks may cause?”
Tactics to protect against legal...
Indian-origin urologist Jitesh Patel will have to pay $14 million to settle allegations against him that he defrauded healthcare programs by performing unnecessary procedures on his patients. An e...