Not CUI Compliant
4 NIST 800-171 gaps detected. Not FedRAMP authorized. Consumer-grade HR/payroll. Very popular among startups entering GovCon without understanding compliance requirements.
Gusto
by Gusto
FedRAMP Status
Not FedRAMP Authorized
Impact Level
N/A
Category
HR & Payroll
Overview
Gusto is a popular HR and payroll platform among startups and small businesses. It is cloud-only with no government-specific offering and no FedRAMP authorization. Many small companies entering defense contracting use Gusto without understanding they need to assess whether payroll data intersects with CUI.
CUI Risk Assessment
Not FedRAMP authorized. Consumer-grade HR/payroll. Very popular among startups entering GovCon without understanding compliance requirements.
Deployment & Architecture
Deployment Model: Cloud SaaS (vendor-hosted)
Gusto has no FedRAMP authorization on record. DFARS 252.204-7012(b)(2)(ii)(D) requires an external cloud service provider to meet security requirements equivalent to the FedRAMP Moderate baseline — an authorization is the straightforward way to show that, but it is not the only one. Without one, the burden is on you to establish, document, and defend equivalency, and to meet the clause's incident-reporting and media-preservation obligations. Most contractors find an authorized alternative cheaper than carrying that burden.
Migration Checklist
- 1ISSO must immediately add Gusto to POA&M as a high-risk finding under NIST 800-171 controls 3.1.1, 3.8.1, 3.13.8, and 3.13.11.
- 2Contracts officer should review all active contracts to determine if employee data in Gusto constitutes CUI under DFARS 252.204-7012 requirements.
- 3ISSO must conduct risk assessment documenting specific CUI categories processed by Gusto including employee PII with security clearance levels.
- 4System administrator should implement immediate data export procedures to extract all CUI from Gusto while maintaining proper CUI markings.
- 5ISSO must update authorization boundary diagram removing Gusto from CUI processing environment and documenting compensating controls if temporary retention required.
- 6Procurement team should initiate vendor evaluation for FedRAMP-authorized HR solutions meeting CMMC Level 2 requirements within 30 days.
- 7Legal counsel must review Gusto service agreement to identify data residency violations and notification requirements for CUI exposure.
- 8ISSO should update SSP section 2.3 to reflect Gusto removal from authorization boundary and document replacement system security controls.
NIST 800-171 Violations
Using Gusto for CUI without FedRAMP authorization may violate these NIST 800-171 controls:
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Frequently Asked Questions
Can I keep using Gusto as a defense contractor?
If your payroll and HR data does not include CUI, Gusto may be acceptable with documented risk acceptance. However, Gusto lacks the government compliance features of ADP or Paychex and has no path to FedRAMP authorization.
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