With international concerns growing about possible cyberattacks by Russia, China and other nefarious actors seeking to disrupt businesses, infrastructure and the order of everyday life, more attention is being paid to data and computer security. For businesses, that involves not only customer and financial data, but employee and payroll data as well.
As if to underscore vulnerabilities, none other than the American Payroll Association (APA) was hit by computer hackers on July 13, 2020. The APA has more than 20,000 members, represents the industry in Washington, DC, and provides education and training in all things payroll. When the theft of data on members and others was discovered, the APA tightened security and offered victims 12 months of free credit monitoring and $1 million in identify theft insurance.
For a Hudson Valley-based payroll services provider, PayServ Payroll Corporation, located in Bardonia in Rockland County, computer and data security is integral to its business that serves company and employee needs in more than 40 states.
When asked by the Business Journal for an overview of its approach to cybersecurity, the company responded, “PayServ and our software provider maintain a formal and comprehensive program designed to ensure the security of customer data, protect against security threats, and prevent unauthorized access to the data of our customers. A key indicator of that formal program is an ongoing review process by third-party auditors. PayServ performs ongoing Nacha and SOC audits along with internal, external and social penetration testing in addition to the ongoing and comprehensive testing done by our software provider.”
Nacha governs the ACH Network, the payment system that is used for direct deposits and direct payments to banks and credit unions. SOC stands for System and Organization Controls.
“We spend a tremendous amount of time on security,” Dan Rifkin, president of PayServ, told the Business Journal. “Internet and network security as a concept is something that’s relatively new in say the last 10 or 15 years. Once upon a time, we used to install locally based software on clients’ computers so that they could run the payroll and send it to us. Now, everything is driven off of the internet. Everything is web-based. Our entire business is cloud-based now and highly redundant, highly secure.”
Rifkin said that the company was originally started by his father and two partners back in the mid-1980s. He said that the company did computer-based bookkeeping work for clients at a time when the personal computer was just beginning to impact the small business environment.
“I joined the business in the early 90s. I did see an opportunity to provide payroll services,” Rifkin said. “I bought the company out from my father and his two partners in the mid-90s.”
Rifkin said that he eventually rebranded the company as PayServ, jettisoned all of the work other than payroll processing and started growing that business. Grow it has, from a dozen clients back then to more than 1,300 today.
Lynne Allan, CEO of PayServ, told the Business Journal, “We can service clients from one employee to about 1,500 employees. Our strength is supporting small to mid-sized local businesses. We deal with a lot of not-for-profits and support them and local municipalities. So what we’re really trying to do is support local businesses to give them all the services that they need, but having someone who’s local that they can turn to if they ever have an issue.”
Rifkin said that throughout the pandemic, PayServ was considered to be an essential business and continued operating.
“We were very, very involved with our clients and the clients applications for Paycheck Protection Program loans, the PPP program. We were very involved in getting documentation to our clients to help streamline applications for these loans. We gave a lot of advice. We did a lot of research and the rules were changing. At one point they seemed like they were changing almost every day. There was no blueprint for this. Nobody had ever done this before. We learned as we went with our clients and on behalf of our clients. It was a very, very stressful time. But, when your clients need help, you have to be there to help them no matter the circumstance. You have to be there to help them.”
Rifkin said that PayServ differentiates itself from others in the field through its approach to payroll and human resource compliance work by being focused on client service, education and support.
“What we do is really very complicated and we’re selling in to a segment of the employer population that is really not large enough to have dedicated in-house teams and in-house software platforms to support their payroll and human resource needs,” Rifkin said. “We really occupy a critical role in today’s employment environment. We stay on top of all of the changing laws, both locally here in the Hudson Valley as well as statewide and throughout the country and on the federal level as well.”
Rifkin pointed out that with employers hiring more and more remote employees, PayServ is capable of supporting payrolls throughout the US He said the majority of their clients come from word of mouth and referrals.
“People in general have never been as mobile as they are now in their lives. It’s not unusual for the payroll person at a client to end up leaving the company and moving to another part of the country and they get a comparable job with a company in another state,” Rifkin said. “They will advocate for us and pick up the phone and call us and say, ‘Well, you used to do our payroll when I was at client XYZ, but I’ve moved on now. Can you do payroll in Delaware, can you do payroll in Arizona?’ We’re not tied to a particular geographic area.”
Rifkin stated that there have been many changes since he first got started in the payroll service business, many linked to technology. He said that the PayServ platform is cloud-based, allowing access 24/7 for clients and their employees from anywhere.
“When I first started in the business, the idea of direct deposit was brand new. We were one of the first in the Hudson Valley to embrace it and start processing direct deposits on behalf of our clients,” Rifkin said. “Shortly after that, we got into electronic tax payment with the IRS and the states followed little by little over the years.”
Rifkin said that the company currently provides products that are ancillary but related to payroll, including a time and attendance and scheduling platform.
“We have human resource capabilities as well, both from a consulting standpoint as well as from a software standpoint. These are products that are relatively new to this business, kind of a hub and spoke approach. The hub is really a payroll. Retirement plan, benefit plan administration is something that we do as well,” Rifkin said.
Allan said that new areas being covered include expense management and tracking volunteering and giving.
“What differentiates us from a lot of our competitors is we’re not just dumping this all on a client,” Allan said. “We really take the time to go, ‘What do you need? You don’t need to have it all now but it’s there as you grow.’ We tailor everything to the specific client.”