By using Gusto, you give Gusto permission to use and process the data you upload, including employee payroll and HR data, to run and improve their services.
This analysis describes what Gusto's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This license covers highly sensitive data including employee Social Security numbers, bank account details, compensation, and personal information, and the scope of permitted use for service improvement warrants careful review.
Interpretive note: The phrase 'improve the Services' is ambiguous as to whether it permits use of identifiable employee data for product development or only aggregated, de-identified data; this distinction is material under CCPA and GDPR.
The updated terms make explicit that requesting a background check through Gusto creates a legally binding agreement not just with Gusto but also incorporating terms from Gusto's payroll service and Checkr's service agreement. This means customers are committing to multiple overlapping sets of terms when they initiate a background check request. The change does not appear to alter the substantive rights or obligations, but rather clarifies their scope and binding nature in writing.
View change record →Developers integrating with Gusto's platform are now bound by mandatory arbitration and class action waiver provisions, meaning they cannot join or file class actions against Gusto and must resolve disputes through individual, binding arbitration. The updated terms also grant Gusto the right to modify, update, or discontinue developer tools at its sole discretion without notice or liability, which could disrupt integrations and require developers to absorb costs of upgrading to new versions. Developers should review Section 19 of the updated terms carefully before creating or maintaining integrations with Gusto's platform, and consider whether the arbitration and modification provisions align with their business and legal risk tolerance.
View change record →Removal of this provision eliminates explicit employer grant of data license rights to Gusto, potentially clarifying data ownership but also removing clarity on Gusto's data usage permissions.
View full change record →Employer-customers authorize Gusto to store and process sensitive employee data, including financial and identification data, to provide payroll services. The phrase 'improve the Services' is worth noting, as it may authorize use of aggregated or de-identified data for product development purposes beyond the immediate payroll transaction. Gusto's Privacy Policy should be reviewed for additional detail on data retention and use.
How other platforms handle this
Each payment processor uses and processes your complete payment information in accordance with its applicable privacy policy (Stripe and PayPal).
we may share data between our affiliates for the safety and security of our users and may take necessary actions if we believe you have violated these Terms, including banning you from our Services and/or our affiliates' services...
Protect us, our business, our users, and others, for example to enforce our terms of service, prevent spam or other unwanted communications, and investigate or protect against fraud
"By using the Services, you grant Gusto a non-exclusive, worldwide, royalty-free license to use, copy, store, transmit, and display the data and content you submit through the Services solely to the extent necessary to provide, operate, and improve the Services.Excerpt from Gusto's Terms of Service
REGULATORY LANDSCAPE: The data license provision engages several regulatory frameworks.
Enforcement risk, jurisdiction flags, contract triggers, and due diligence action items.
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This license covers highly sensitive data including employee Social Security numbers, bank account details, compensation, and personal information, and the scope of permitted use for service improvement warrants careful review.
Employer-customers authorize Gusto to store and process sensitive employee data, including financial and identification data, to provide payroll services. The phrase 'improve the Services' is worth noting, as it may authorize use of aggregated or de-identified data for product development purposes beyond the immediate payroll transaction. Gusto's Privacy Policy should be reviewed for additional detail on data retention and use.
ConductAtlas has identified this type of provision across 288 platforms. See the full comparison.
No. ConductAtlas is an independent monitoring service. We are not affiliated with, endorsed by, or sponsored by Gusto.