KRONOS Payroll Ransomware Attack Implicates Potential Data Breach Notification Obligations

By: Kathie McDonald-McClure

UKG, Inc., a company that provides payroll support services known as KRONOS for many U.S. companies, began notifying its customers on December 12, 2021, that the KRONOS Private Cloud (KPC) had been attacked by ransomware.  (See UKG Kronos Private Cloud Status Updates.) The KPC products include Workforce Central, TeleStaff, Healthcare Extensions and Banking Scheduling Solutions. UKG reports that the KPC solutions may be unavailable for “several weeks.”  Affected companies are diligently working to find alternative solutions to process their payrolls in the interim. UKG has created a KPC Incident Resource Hub to assist customers impacted by the KPC disruption in services.

The American Hospital Association (AHA) reported that the ransomware attack has impacted many hospitals and health systems that rely on KRONOS for timekeeping, scheduling and payroll.  John Riggi, AHA’s Senior Advisor for Cybersecurity and Risk, said, “A lack of the availability of those services could be quite disruptive for health care providers, many of whom are experiencing surges of COVID-19 and flu patients. … This attack once again highlights the need for robust third-party risk management programs that identify mission-critical dependencies and downtime preparedness. … [W]e urge all third-party providers that serve the health care community to examine their cyber readiness, response and resiliency capabilities.” 

In addition to the immediate payroll issues, if the ransomware attack compromises employee personal information, then it may trigger a data breach notification for these employers under state breach notification laws. 

Continue reading