Partial CUI Compliance
1 NIST 800-171 gaps detected. Not FedRAMP authorized. SOC 1 certified. Common among small contractors.
Paychex
by Paychex
FedRAMP Status
Not FedRAMP Authorized
Impact Level
N/A
Category
HR & Payroll
Overview
Paychex is a popular payroll and HR platform used by many small defense contractors. It integrates with Deltek Costpoint and other GovCon ERPs. SOC 1 certified but not FedRAMP authorized.
CUI Risk Assessment
Not FedRAMP authorized. SOC 1 certified. Common among small contractors.
Deployment & Architecture
Deployment Model: Cloud SaaS (vendor-hosted)
Paychex 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 Paychex non-compliance to the POA&M citing NIST 800-171 control 3.13.8 violation with target remediation date.
- 2Contracts officer should review all active government contracts to identify CUI data categories processed through Paychex payroll system.
- 3ISSO must update the authorization boundary diagram to explicitly exclude Paychex from the CUI processing environment.
- 4IT administrator should implement immediate data flow restrictions preventing CUI transmission to Paychex during migration period.
- 5CISO must evaluate FedRAMP authorized payroll alternatives including ADP Workforce Now FedRAMP and document selection criteria in SSP.
- 6Data custodian should catalog all employee records containing CUI elements (clearance levels, contract assignments, proprietary rates) for secure migration.
- 7System administrator must establish encrypted data export procedures compliant with DFARS 252.204-7012 requirements for CUI handling.
- 8ISSO should coordinate with legal team to review Paychex contract termination procedures and data destruction requirements.
- 9Training coordinator must develop user transition plans for payroll staff including new system workflows and CUI handling procedures.
- 10Compliance officer should schedule DCMA notification of remediation timeline and provide monthly progress updates until migration completion.
NIST 800-171 Violations
Using Paychex for CUI without FedRAMP authorization may violate these NIST 800-171 controls:
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Frequently Asked Questions
Is Paychex adequate for a defense contractor?
Paychex handles payroll adequately for most contractors. If HR/payroll data does not include CUI, document a risk acceptance. Ensure payroll data is segregated from CUI systems.
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