ALBANY, N.Y.—New York is the latest state to adopt a law that requires businesses that collect private information on its residents to implement reasonable cybersecurity safeguards to protect that information.
New York now joins California, Massachusetts and Colorado in setting these standards. New York’s law mandates the implementation of a data security program, including measures such as risk assessments, workforce training and incident response planning and testing, National Law Review reported.
Businesses should immediately begin the process to comply with the Act’s requirements effective March 21, 2020. Notably, New York’s law covers all employers, individuals or organizations, regardless of size or location, which collect private information on New York State residents.
What Law Requires
The “Stop Hacks and Improve Electronic Data Security Act” (SHIELD ACT) requires implementation of an information security program to protect “private information” defined as:
- Any individually identifiable information such as name, number or other identifier coupled with social security number, driver’s or non-driver identification card number or account number, credit or debit card number in combination with any security code, access code, password or other information that would permit access to the individual’s financial account, or biometric information (such as fingerprint, voice print, retina or iris image);
- individually identifiable information coupled with an account number, credit or debit card number if circumstances exist wherein such number could be used to access an individual’s financial account even without additional identifying information, or a security code, access code or password
- A username or email address in combination with a password or security question and answer that would permit access to an online account.
How to Comply
The law broadly requires that “any person or business” that owns or licenses computerized data which includes private information of a New York State resident “shall develop, implement and maintain reasonable safeguards to protect the security, confidentiality and integrity of the private information,” National Law Review explained.
In order to achieve compliance, an organization must implement a data security program that includes:
- Reasonable administrative safeguards that may include designation of one or more employees to coordinate the security program, identification of reasonably foreseeable external and insider risks, assessment of existing safeguards, workforce cybersecurity training, and selection of service providers capable of maintaining appropriate safeguards and requiring those safeguards by contract
- Reasonable technical safeguards that may include risk assessments of network, software design and information processing, transmission and storage, implementation of measures to detect, prevent and respond to system failures, and regular testing and monitoring of the effectiveness of key controls
- Reasonable physical safeguards that may include detection, prevention and response to intrusions, and protections against unauthorized access to or use of private information during or after collection, transportation and destruction or disposal of the information.
Small businesses of fewer than 50 employees, less than three million dollars in gross revenues in each of last three fiscal years, or less than five million dollars in year-end total assets may scale their data security program according to their size and complexity, the nature and scope of its business activities and the nature and sensitivity of the information collected, National Law Review said.