Recently, Virginia passed an amendment to its data breach notification law that adds state income tax information to the types of data that require notification to the Virginia Office of the Attorney General in the event of unauthorized access and acquisition of such data. Under the amended law, an employer or payroll service provider must notify the Virginia Office of the Attorney General after the discovery or notification of unauthorized access and acquisition of unencrypted and unredacted computerized data containing a Virginia resident’s taxpayer identification number in combination with the income tax withheld for that taxpayer.
The amendment contains a harm threshold, requiring notification when such unauthorized access and acquisition compromises the confidentiality of the data and causes, or reasonably will cause, identity theft or fraud. For employers, the amendment applies only to the employer’s Virginia employees, and not to information regarding the employer’s customers or non-employees. Notification to the Virginia Office of the Attorney General must be made “without unreasonable delay” and must include the name and federal employer identification number of the employer that may be affected by the incident. The amendment requires notification only to the Virginia Office of the Attorney General, and not affected individuals. The amendment takes effect on July 1, 2017.