Data Collectors Safe Harbor

Data CollectorsA SAFE HARBOR FOR “DATA COLLECTORS” IF A DATA BREACH OCCURS

On the heels of ineffective data breach notification laws, Senate bill 227, a more proactive approach, offers a safe harbor to businesses that collect personal information if a data breach occurs. Some important definitions apply:

Are you a “data collector?”

A “data collector” is defined in Nevada Revised Statute 603A as “any governmental agency, institution of higher education, corporation, financial institution or retail operator or any other type of business entity or association that, for any purpose, whether by automated collection or otherwise, handles, collects, disseminates or otherwise deals with nonpublic personal information.”

If you collect data, what constitutes “personal information?”

Personal Information is defined as a natural person’s first name or first initial and last name in combination with a (i) social security number (ii) driver’s license number or identification card number, or (iii) account number, credit card number or debit card number, in combination with any required security code, access code or password that would permit access to the person’s financial account.

So, if I am a data collector, what do I need to do to get the safe harbor?

Effective January 1, 2010, you will need to encrypt personal information that is either transmitted electronically or contained in a data storage device that has moved beyond the data collector’s control (e.g. on a laptop computer). There are specific requirements contained in the statute! If you do encrypt the data, you, as a business owner, will avoid liability if that encrypted data is lost or improperly accessed! In addition, it is possible that courts will take the encryption requirement into account in determining what constitutes negligent conduct associated with data breaches. Companies that follow the statutes may even be eligible for reductions on their insurance. All of these are good reasons to check out SB 227 in the 2009 session information on the Nevada Legislature website at www.leg.state.nv.us or at http://www.leg.state.nv.us/75th2009/Bills/SB/SB227_EN.pdf

What Is The Nevada Domestic Partnership Act And What Do I Need To Do As A Business Owner?

Nevada Domestic PartnershipEffective October 1, 2009 (It’s coming up fast!), the State of Nevada will recognize a new civil contract between unmarried individuals who meet the requirements of the Nevada Domestic Partnership Act and who properly file registration documents with the Nevada Secretary of State. Domestic partners may be the same sex or opposite sex. The new law grants registered domestic partners the same rights, protections, benefits, responsibilities, obligations and duties as those granted to married couples under the law whether imposed by statute, regulation, rule, government policy, common law, or any other source of law. These rights and responsibilities extended to registered domestic partners include those provided under testamentary/probate law, employment and discrimination law, and all family law statutes including community property, spousal and child support, and adoption. Although distinct from marriage under Nevada’s Constitution, domestic partners should, in most cases, be treated as the legal equivalent of spouses with the exception listed below.

OK, Fine! So what are you supposed to do???

To comply with the Nevada Domestic Partnership Act, you should review your policies and procedures to determine if revisions need to be made to account for registered domestic partners. Generally, any reference an employee’s spouse in your employee handbook or policies should be revised to refer to “spouse and/or domestic partner.” In doing these revisions, however, you should be aware that certain benefits for spouses mandated by federal law, such as COBRA continuation health coverage and Family and Medical Leave Act leave, may not be available to domestic partners.

Also, think about your company’s forms. If you have a new hire packet that includes information about a spouse, change that to say “Spouse/Domestic Partner.”

YOU HAVE A CHOICE REGARDING HEALTH CARE BENEFITS!

The major exception to the rights extended to registered domestic partners is required employer health care benefits. Public and private employers in Nevada are not required to provide health care benefits under their applicable plan to registered domestic partners, but they may choose to do so. If you wish to extend insurance benefits to domestic partners, we suggest that you call your insurance provider to discuss whether you can and/or will offer benefits to domestic partners of your employees. Under this new law, employers who offer benefits to their employees and spouses will need to carefully evaluate each benefit and determine if they are required, or if they elect, to include domestic partners. Please keep in mind that under federal law, neither same-sex spouses nor domestic partners are generally recognized as spouses for whom favorable tax benefits apply. This would usually mean that certain tax-favored benefits (like pretax cafeteria plan or flexible spending account benefits) cannot be provided to employees who add domestic partners to group health plan coverage.

The conditions that must be met to register a domestic partnership can be found in Senate Bill 283 in the 2009 session information on the Nevada Legislature’s website: www.leg.state.nv.us. For more information on how to register a domestic partnership with the Nevada Secretary of State, go to: www.nvsos.gov/licensing/securities/domesticpartnership.asp.