www.adp.com/zenefits

The Facts about ADP & Zenefits:
Response to the claims made
by Zenefits
Zenefits Claims

THE FACTS:

Thousands of small businesses use HR software from Zenefits to
effortlessly manage their companies, saving them time and money,
and enabling them to hire and grow without an expensive back office.

We have never integrated with Zenefits in any sense and have never authorized their method of extracting data
from our RUN payroll system. They gained access to our systems by convincing clients to give them administrative
access to our platform. Despite having many legitimate ways to integrate with ADP properly, Zenefits chose an
unsecure and indirect approach.

Now, ADP – the world’s largest payroll provider – has cut thousands
of their small business customers off from using Zenefits to automate
their time-consuming payroll administration work. ADP did so without
permission from these small businesses, and also without notifying
Zenefits, who has partnered with ADP amicably since we were
founded.

On June 4, we disabled Zenefits access to ADP’s RUN small business solution due to unusual and alarming
demand for data from Zenefits far out of proportion to the number of clients who have allowed them access to
our system. Despite Zenefits serving less than 0.25% of the clients on our system, they had been responsible for
up to 25.0% of the total user traffic (in other words, a hundred-fold times ordinary user traffic).

Why would ADP undertake this sudden, unilateral move that
makes it harder for their own clients to manage their employees?

The Zenefits approach was not only putting excessive and unnecessary demand on ADP’s servers, but it was
pulling sensitive information, including unmasked Social Security numbers and employee banking information,
in a manner that did not comply with ADP’s standards for data security. We would have been happy to discuss
a solution with Zenefits, but they never reached out to us or responded to our requests to resolve the issue.
Instead, they chose to impugn our motives and integrity in a public forum.

Because ADP believes that it, one day, can build software to
compete with Zenefits, and in the meantime, they want to do
anything they can to slow us down.

Although it has been providing services since 1949, ADP remains an innovative company that is able to compete
fairly in the marketplace with any competitor, including well-funded startups. Indeed, ADP has a rich history of
partnering with third party service providers, some of whom could be considered competitors. We have robust
processes in place to ensure our partners adhere to our high standards to ensure data security and service
delivery. Zenefits chose not to engage ADP to discuss integrating, but instead engaged in conduct to copy data
from ADP’s system without ADP’s knowledge or consent, which put data security and service delivery at risk.

ADP is using its size and power to block small businesses
from using Zenefits today so that they can get a leg up on the
competition tomorrow. In fact, an ADP client can set up anyone
in the world to administer their payroll – except those with a
Zenefits email account.

We do not block our customers from using third-party vendors. To the contrary, there are many third parties
that cooperate with us in a way that allows our systems to work effectively for our mutual clients in concert
with those of third parties and provide maximum security of our clients’ data. Zenefits never contacted ADP
to work out such cooperation.

It’s outrageous – and frankly, unethical – that this massive company
is perfectly fine making life harder for small businesses just because
ADP fears a new, disruptive competitor. ADP would rather hurt its
own customers, than compete fair and square with Zenefits.

ADP has been serving the small business community for decades, since 1949. Today we proudly serve more
than 410,000 small businesses across the country. Our goal is, and always has been, to provide solutions that
make their business operations simpler, easier and secure. We meet that goal by providing industry-leading
services and competing fairly and squarely with any competitor in the marketplace. Zenefits is competing with
ADP by making false statements on social media. We’ll let the marketplace decide who is acting in an
“outrageous” and “unethical” manner.

We believe that small businesses deserve better. They – and not
just the Fortune 500 – should be able to have the latest technology
to make running their companies easier. Small businesses should
not be used as pawns in a giant corporation’s chess game

We believe that small businesses should have not only the latest technology, but technology that is effective
and secure. Unrestricted demands for sensitive data like those made by the Zenefits system, such as
Social Security Numbers, is neither effective nor secure. The support we provide for small business owners is
too critical to their cash flow, privacy and security for anyone to take chances. You need only look at recent news,
such as the hacking of the personal data of millions of U.S. government employees, to understand the risk.
Our first priority is protecting our clients and their data.

Zenefits will fight this anti-competitive behavior with all we’ve got.
But we need your help. If you agree that big companies should
compete like everyone else and small businesses should be able to
use the latest technology, then please sign our petition! Tell ADP’s
CEO, Carlos Rodriguez, to stand with his small business customers –
and let them use Zenefits!

This action to preserve the security of our clients’ data and their ability to operate within the RUN system was
not specific to Zenefits. We would block the access of ANY organization or individual who created a similar
situation. We’re willing to work with our clients who use Zenefits, and with Zenefits directly, to find a solution
that fulfills our clients’ needs and protects their data.

www.adp.com/zenefits
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