Data privacy laws have a significant impact on every organization’s HR department. Other than data processing, they affect the recruitment and evaluation of employees. If you’re an HR manager, you must protect sensitive personnel data by implementing legally compliant processes and systems. In addition to American data protection legislation, other laws such as Europe’s GDPR also affect your operations.
Relevant Data Privacy Laws
Data Privacy Day is observed every year on January 28th to raise awareness among individuals, businesses, and other entities on data protection best practices. This event allows you to scrutinize your internal data collection and management processes to prevent loss, misuse, and exploitation.
Unlike the EU’s General Data Protection Regulation (GDPR), the US doesn’t have a single, all-encompassing act in place. Instead, it has various federal laws as well as state-enacted consumer-friendly directives. They include:
- US Privacy Act (1974)
Although computer use wasn’t widespread then, Congress was still concerned about the potential misuse of government-held data. This law gives citizens the right to access and copy any data from government agencies. It also restricts that data on a need-to-know basis.
- Health Insurance Portability and Accountability Act (HIPAA)
This regulation came into effect in 1996 with the intention of controlling the health insurance sector. Its data protection section is contained in The Security Rule, while The Privacy Rule covers data confidentiality. Protected health information (PHI) is a crucial aspect of HIPAA. It specifies the type and amount of patient data that health providers can collect and share.
The Children’s Online Privacy Protection Act (1998) regulates the data you collect from minors. It prohibits asking for personally identifiable information (PII) from children under 13 years old, including those residing outside the US.
- Gramm-Leach-Bliley Act (GLBA)
This law is alternatively called the Financial Services Modernization Act (1999). As the name implies, it contains rules to regulate banks and other financial institutions. It also has sections that touch on data security and privacy.
Apart from these federal regulations, various states also have or are implementing data privacy laws. The most notable is the California Consumer Privacy Act (CCPA). Others with similar enactments are New York, North Dakota, Maryland, Hawaii, and Massachusetts. Contact your employment lawyer for an explanation of their impact on your operations.
Essentials of GDPR Compliance
All modern companies have an online presence that makes it easier to serve overseas clients. If your company has employees, clients, customers, or other associates in the European Union, you must comply with GDPR requirements. This law enforces accountability and transparency for entities that collect data. It outlines varying record-keeping conditions depending on whether you’re a data controller or processor.
- GDPR requires employees to be aware of:
- Details about the data controller.
- Reason for collecting and processing their details.
- Changes to data, contract, or company handbook.
- Third party involvement such as payroll providers who’ll have data access.
- The data protection rights that GDPR accords them, including the ability to revoke their consent.
How Do You Define Personal Data?
GDPR defines personal data as any information that contains identifiers such as name, ID number, and location. It also includes genetic, economic, mental, social, physical, cultural, physiological, and social information. This definition applies to data that is accessible or held by a public entity.
It includes CVs, application documents, references, personal attachments, payroll details, and medical data. Other considerations are employment contracts, benefits, and performance reviews.
How to Protect Employee Data
The HR department is responsible for safeguarding its employees’ data. US-based companies should comply with the standards outlined by the Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act. It’s also advisable to continuously update employees on their data protection and privacy rights under US laws and GDPR.
Take the following precautions if your company retains employee data:
- Seek explicit consent for sensitive data such as employee benefits and medical information to prevent discrimination and safeguard health.
- Desist from gathering more information than you need during recruitment.
- Have a concise social media policy if you use such platforms to make employment decisions.
- Ensure your employees are aware of any CCTV or online monitoring and seek consent before remotely accessing their computers.
Additional best practices for protecting employee data are:
- Design, develop, and ensure all departments implement data security controls.
- Create access control for sensitive data and periodically evaluate those with authorization.
- Train employees on record-keeping guidelines and develop or fine-tune your incident response plan to avoid or contain data breaches.
- Other than investing in high-grade data encryption, cultivate a security-first culture.
GDPR requires your storage of personal data to be as short as possible, depending on your needs.
What Are The Legal Repercussions of Data Breaches?
Consequences depend on the nature of the loss, unauthorized access, or data manipulation due to a security breach. They include prosecution, a ban or temporary suspension of data processing, lower revenues, and loss of trust by clients. Ensure you have a clear policy regarding departing employees to avoid unintended data leaks. This precaution includes retrieving all company-issued devices and restricting their access to internal systems.