Employer Data Breaches
Employees’ personal data can be compromised in a number of ways, and employers are often required by state and federal law to implement reasonable data security measures to protect personal information. When a data breach occurs and compromises employees’ personally identifiable information, employers can be held liable for failing to protect this information or failing to notify the affected parties in a timely manner.
- January 26, 2026
- Employer Liability for Data Breaches
- What Kind of Employee Data Is at Risk?
- Common Causes of Data Breaches in Employer Environments
- Delayed Detection and Breach Notification
- Impact of Employer Data Breaches on Employees
- Compensation for Victims of Data Breach
- High Profile Employer‑Related Breaches
- Frequently Asked Questions (FAQ)
- Class Action U Can Help
- Key Takeaways
- When employers like businesses and government agencies have their data breached, employees often pay the price, as their personal information becomes exposed to bad actors.
- Employers in the U.S. are legally obligated to protect their employees’ personal data and notify them when a data breach occurs.
- If your information was compromised in a data breach at your workplace, you have legal rights and may be eligible for compensation. Contact Class Action U to be connected with a data breach attorney.
Data breaches can affect any company, government agency, or other organization that collects and stores employee or customer data. Because employer records often contain sensitive information, they can be especially attractive targets for hackers and other bad actors. If employee records are accessed, the attacker may be able to obtain additional personal details or even use that information to gain entry into other employer systems.
When a breach exposes employees’ personally identifiable information, an employer may face legal liability if it failed to implement reasonable safeguards to protect that data.
Employer Liability for Data Breaches
When an employee’s personal information is exposed in a data breach, state breach-notification laws and other applicable privacy laws may provide protections. If a company fails to take reasonable steps to safeguard employee data or does not provide required notice in a timely manner, it may face legal consequences. Because data breach and privacy laws vary by state, requirements can differ based on what information is covered and how quickly notice must be given.
What Kind of Employee Data Is at Risk?
Several types of employee data are at a particularly high risk of being compromised in a data breach. Payroll and human resources information can be used to access the financial records and Social Security numbers of employees, while background check and screening records hold private information on employees’ criminal and work history.
Payroll, HR, and Benefits Data:
Payroll, HR, and benefits data, including Social Security numbers, bank account details, salary history, and benefits enrollment information, may be compromised during a company data breach.
Background Check and Vendor Screening Records:
Data gathered during hiring or screening processes, including criminal history, work history, Social Security numbers, and other sensitive information, can be rich targets for cybercriminals.
Common Causes of Data Breaches in Employer Environments
Some of the most common causes of data breaches involving employee personal information include third-party vendor breaches, outsourced HR functions, insider threats, access mismanagement, inadequate data security practices, and more.
Vendor or Supply Chain Risk and Outsourcing of HR Functions
Even if internal controls are secure, data breaches can occur through third-party vendors. Employers often rely on vendors to provide payroll, benefits, and background check services, among other services, thereby expanding the attack surface for cyberattacks. In October 2018, the Pentagon announced that its travel records system, which contained the personal data of 30,000 employees and contractors, had been compromised by a third-party vendor.
Insider Threats and Access Mismanagement
Another common source of data breaches is phishing scams, which involve sending an email to an employee with access to sensitive data to trick them into disclosing it or downloading malicious software. Additionally, former employees and other privileged users who still have access to company systems through weak termination procedures or other security issues can pose a threat.
Legacy Systems, Inadequate Segmentation, and Lack of Encryption
Many HR systems were not built for the modern threat environment, so cybercriminals and hackers with advanced technology can easily breach older security systems.
Delayed Detection and Breach Notification
All 50 states and Washington D.C. have data breach laws that require businesses to notify affected individuals of security system breaches resulting in the exposure of personal information. While the definition of “personal information” varies from state to state, it covers at minimum names, Social Security numbers, driver’s license numbers, and financial account numbers. These are common data elements in payroll records.
Unfortunately, employers may discover data breaches long after they have occurred. According to a 2018 study by the Ponemon Institute, once a data breach has occurred, the average time to identify it is 197 days, and the average time to contain it is 69 days.
Impact of Employer Data Breaches on Employees
When employer data is breached and employees’ personal information is compromised, they may face numerous threats to their finances and identity. Some of the potential consequences of an employer data breach include:
- Identity theft
- Employment fraud (e.g., fake unemployment claims)
- Salary and benefit information misuse
- Targeted phishing using internal data
Compensation for Victims of Data Breach
Victims of data breaches that exposed their personal information may be able to recover compensation from the company or agency that was breached. This compensation is often recovered in class-action lawsuit settlements, as many data breaches affect hundreds or thousands of people. If your data was breached, it’s crucial to speak with a lawyer as soon as possible. You may be eligible to recover compensation for:
- Emotional distress
- Out-of-pocket costs for protecting your data
- Identity theft costs
- Time and effort monitoring your data, accounts, and information
High Profile Employer‑Related Breaches
Ahold Delhaize USA Services
Ahold Delhaize USA Services, LLC, the parent company of major U.S. grocery brands like Stop & Shop, disclosed a cybersecurity incident in November 2024 that affected 2.2 million current and former employees across its U.S. companies. The company discovered unauthorized access to its internal U.S. business systems by a ransomware group, and that employees’ names, contact information, ID numbers, financial account information, employment records, and other sensitive data were exposed.
DISA Global Solutions Breach
DISA Global Solutions, a Houston-based provider of employee background checks and workplace safety services, experienced a cybersecurity incident that exposed the personal information and employee screening records of over 3.3 million individuals. The breach occurred in February 2024, but was not discovered until over two months later. The breach resulted from hackers targeting DISA’s infrastructure, and employees’ names, personal identifiers, Social Security numbers, and more were exposed.
MOVEit Data Breach
In November 2024, Amazon reported that a data breach had exposed the email addresses, phone numbers, and building locations of many of its employees. The leaked information dated back to May 2023 and pertained to a major security vulnerability in the MOVEit file transfer system discovered that year. Amazon was one of many major businesses and government entities affected.
U.S. Office of Personnel Management Breach
The Office of Personnel Management data breach was a 2015 breach targeting Standard Form 86 US government security clearance records retained by the US OPM. The attack was carried out by a threat in China, and 22.1 million records were affected, including those of government employees. Two attacks occurred, with one in May 2014. The first attack was discovered in March 2014, but the second wasn’t discovered until April 2015.
Frequently Asked Questions (FAQ)
Does My Employer Have to Tell Me if My Data Was Breached?
State laws generally require notice without unreasonable delay, and some states impose specific deadlines (such as 30 to 60 days).
If I’m a Former Employee, Am I Still Protected?
Yes, former employees’ data is still protected by state and federal laws.
Can I File a Data Breach Lawsuit or Class Action if My Employer’s Data Breach Affected Me?
Employees can sue an employer for a data breach depending on the circumstances of the breach and the laws of the state they’re in.
Will I Face Retaliation if I File a Case?
Retaliation may be unlawful in some circumstances, and employees may have legal protections depending on the situation and applicable law.
Class Action U Can Help
If your information was exposed in a data breach, Class Action U can help. Our goal is to simplify the process for individuals to join ongoing class action lawsuits, connecting them with our law firm partners who are ready to handle their cases. Contact us today to be connected with a lawyer experienced in class action lawsuits.