Any operating in California or providing products/services to California residents must be aware of the California Privacy Rights Act (CPRA). This state-wide data privacy law is among one of the most comprehensive and stringent privacy regulations in the United States.
Under the CPRA, your business has a legal responsibility to protect the privacy of your Californian consumers’ and employees’ data. You must ensure that any consumer personal information is handled in accordance with state law. In broad terms, CPRA employee data is categorized as any sensitive information businesses collect, store, and process about their employees.
Knowing and distinguishing what types of information fall under the CPRA and proper legal compliance can become very complicated. With numerous requirements and potential penalties for non-compliance, having a keen awareness of this legislation is paramount for your business.
This article will delve into the intricacies of CPRA employee data, exploring the risks and challenges businesses face when handling this data and the specific CPRA requirements they must adhere to. We will also discuss the potential penalties and fines for non-compliance and provide a comprehensive CPRA compliance checklist to help you navigate this evolving regulatory landscape.
CPRA Overview
To get up to speed quickly – the California Privacy Rights Act (CPRA) came into full effect on January 1, 2023. It expands the California Consumer Privacy Act and represents a significant step forward in privacy protections for Californians. It has important implications for certain types of businesses operating in the state. In essence, CPRA data is any data used to identify a state resident.
The scope of applicability of the CPRA is broad. It applies to businesses that collect and process personal information of California residents and meet specific criteria, such as having annual gross revenue over $25 million or processing the personal data of 100,000 or more consumers or households. The CPRA also applies to companies that derive at least 50% of their annual revenue from selling personal information.
One of the notable ways in which the CPRA approaches employee data is that it includes provisions specifically addressing employee privacy rights. With these additional rights, under the CPRA, employees are granted the right to access, delete, and correct personal information collected and processed by their employers.
In other words, the CPRA “do not sell” option gives excellent control over what information consumers are comfortable sharing and, therefore, lawfully have the opportunity to withhold such information. The CPRA also requires employers to notify employees of the categories of personal data being collected and the purpose for which it is being used by citing a legitimate need to collect or handle consumer data.
Employee Data Under the CPRA
The term Employee Data is broad and includes multiple areas of sensitive information that can be used to identify a person. Employees have the right to request access to their personal information and the right to request that their information be deleted.
CPRA regulations categorize these types of data into several main areas.
The types of employee data that the CPRA covers include, but are not limited to:
Contact information: This includes personal details such as name, address, email address, and phone number.
Employment history: This includes information about an employee’s job title, duties, compensation, and performance evaluations.
Education and qualifications: This includes information about an employee’s educational background and any certifications or professional qualifications they may hold.
Health and medical information: This includes information about an employee’s physical or mental health, including medical records, disability status, and accommodation requests. Biometric information is also counted within this type of data. Note that there are some exemptions to this kind of data under Section 15 of the CPRA.
Financial information: This includes information related to an employee’s salary, bonuses, and benefits.
Background check information: Any information obtained through criminal background checks, credit checks, and other pre-employment screenings.
The CPRA enforcement requires businesses to provide employees with specific information about the types of personal data being collected and the purpose for which the information is being used. For this reason, knowing which kinds of information are covered under the CPRA is crucial.
Employee Data Privacy Risks and Challenges
While the CPRA regulations enhance employee data protection, they pose several potential privacy risks and challenges for businesses. Among these challenges are data breaches, access controls, and employee monitoring.
Here is a quick overview and description of each type of significant challenge to tackle:
Data breaches
One of the most significant privacy risks for employee data is the potential for data breaches. In the event of a data breach, employee data can be exposed to unauthorized individuals, leading to identity theft, financial fraud, and other types of harm.
To mitigate the chances of this occurring, the CPRA requires businesses to implement reasonable security measures to protect employee data, including access controls, encryption, and other technical safeguards. Businesses must also notify affected employees during a data breach and face significant fines if they fail to handle such occurrences properly.
Managing access controls for employee data
The CPRA provides employees the right to access their personal information and requires businesses to implement controls to prevent unauthorized access. This can be particularly challenging for businesses with large volumes of employee data, such as HR records or payroll information. Businesses must ensure that employees only access the information they need for their job functions and that this information is not disclosed or used for unauthorized purposes.
Employee monitoring & surveillance
Another area of concern for businesses under the CPRA is employee monitoring and surveillance. While businesses have a legitimate interest in monitoring employee activities, they must also respect employees’ privacy rights. The CPRA requires businesses to notify employees before monitoring their activities and to obtain consent. Additionally, businesses must ensure that monitoring activities are limited to what is necessary for legitimate business purposes and that monitoring is lawful and ethical.
By implementing appropriate security measures, managing access controls, and balancing the need for monitoring employees’ privacy rights, businesses can ensure compliance with CPRA regulations and protect the sensitive information of their employees. A CPRA compliance checklist can help businesses stay on track with their obligations and avoid fines and penalties for noncompliance. If you want to learn more about how to get your business complaint, click here to book a consultation:
Privacy by Design for Employee Data
Privacy by design is a concept that promotes the integration of privacy protections into the design and development of products, services, and systems from the outset. The CPRA places a strong emphasis on privacy by design, and businesses are required to implement measures to protect employee data privacy by default. This law includes using data minimization, purpose specification, and security controls to ensure that employee data is collected and processed in a manner that respects their privacy rights.
Here is an overview of the types of actions to undertake to mitigate risks for your business:
Data minimization is a crucial aspect of privacy by design. It involves limiting employee data collection, use, and retention to what is necessary for legitimate business purposes. Businesses should only collect data that is relevant and necessary to perform their functions and should avoid collecting data that is not required. By minimizing the amount of employee data collected and processed, businesses can reduce the risk of data breaches, unauthorized access, and the potential for privacy violations.
Purpose specification is another essential element of privacy by design. It involves specifying the purpose for CPRA personal information collection and processing and ensuring that this purpose is communicated clearly to employees. This process includes providing notice to employees regarding the types of data that will be collected, how it will be used, and who will have access to it. By providing clear and concise information about data processing activities, businesses can help employees make informed decisions about their privacy.
Privacy by design is a critical pillar of the CPRA policy. Businesses must implement measures to protect employee data against unauthorized access, disclosure, and use. Measures include access controls, encryption, and data backups. Ideally, employees would be trained on security best practices and understand their roles and responsibilities. A good understanding of how employees use your business’s tools, systems, and hardware is needed to safeguard against data breaches.
By adopting a privacy-focused approach to designing and developing products and services, businesses can build trust with their employees and demonstrate their commitment to data protection. Through data minimization, purpose specification, and security controls, businesses can ensure that employee data is collected and processed in a manner that respects their privacy rights.
CPRA Requirements for Handling Employee Data
Under the California Privacy Rights Act, businesses are required to comply with a set of regulations for handling employee data. These regulations place specific requirements on businesses that collect, process, or share employee data and are designed to protect the privacy and security of this sensitive information.
Here is a list of CPRA requirements that businesses must follow when handling employee data:
1) Purpose Limitation
Businesses must specify the purposes for which employee data is collected and processed. They must also limit the collection and processing of employee data to what is necessary for the identified purposes.
2) Data Minimization
Businesses must minimize the collection, use, and retention of employee data to what is necessary for specified purposes.
3) Access Controls
Businesses must implement appropriate technical and organizational measures to ensure employee data’s confidentiality, integrity, and availability. This includes restricting access to employee data to authorized personnel only.
4) Security Safeguards
Businesses must implement appropriate security safeguards to protect employee data against unauthorized access, disclosure, or use. This includes the use of encryption, access controls, and data backups.
5) Do Not Sell Option
Businesses must provide employees with the option to opt out of the sale of their personal information whenever employee data is sold or shared with third parties for monetary or other consideration.
6) Private Right of Action
Employees have the right to sue businesses for damages resulting from a data breach or other unauthorized disclosure of their personal information.
By adequately adhering to these CPRA requirements, businesses can ensure that they are handling employee data in a manner that respects employees’ privacy rights and complies with the law. Having a clear-cut strategy on how to design your business systems and internal operations around privacy is a must when it comes to compliance.
Potential Penalties and Fines for Non-compliance
The CPRA includes severe penalties for non-compliance with its requirements for handling employee data. Businesses that fail to comply with the CPRA may be subject to significant fines, legal action, and reputational damage. The CPRA’s private right of action also allows consumers to sue for any privacy breaches and ask for restitution of damages.
Here is a list of recent enforcement actions and fines related to CPRA employee data violations:
Consumer data breach at Home Depot
In 2014, Home Depot had a large-scale data breach related to its point-of-sale (POS) system. The breach occurred when unauthorized individuals accessed Home Depot’s network by exploiting stolen credentials from a third-party source. The lack of proper security measures in Home Depot led to more than 50 million credit card numbers and 53 million email addresses being stolen over five months. The repercussions of this breach led Home Depot to pay substantial amounts in settlements, with estimates amounting to at least $134.5 million, which was distributed to credit card companies, banks affected by the incident, and reimbursement for the victim’s stolen money.
Yahoo! email Data breach
During the years 2013 and 2014, Yahoo! succumbed to a series of cyberattacks, resulting in the compromise of numerous user account records and emails. This incident stands as one of the most significant data breaches ever recorded due to its sheer scale. Surprisingly, the breach remained undisclosed to the public and investors for a period of two years following the actual event. Consequently, Yahoo! faced a $35 million fine from the SEC (Securities and Exchange Commission) in 2019 due to the lack of user data security protocols.
Employee Data Breach at Zoom
In 2020, video conferencing company Zoom was fined $85 million for a data breach that exposed employees’ personal information, including names, addresses, and social security numbers. The CPRA violations included failures to implement appropriate access controls and security safeguards.
These enforcement actions demonstrate the severity of penalties businesses may face for mishandling employee data and failing to comply with CPRA regulations. Getting a CPRA fine can easily be avoided by being aware and implementing the correct measures.
CPRA Employee Data Compliance
Compliance with the CPRA is critical when handling employee data. Businesses must take the necessary steps to comply with the CPRA to avoid potential fines, legal action, and reputational damage.
Here is a list of best practices and steps that businesses can take to ensure compliance with the CPRA when dealing with employee data:
Identify the Types of Employee Data Collected – Businesses should first identify the types of employee data they collect, process, and store. Sensitive employee data, including personal information such as names, addresses, social security numbers, and financial information, should all be first identified as such.
Implement Data Minimization Practices – Businesses should implement data minimization practices when collecting employee data. Data minimization includes collecting only the necessary data required for the intended purpose and deleting unnecessary data when it is no longer needed.
Establish a Privacy Policy – Businesses should establish a privacy policy that outlines their practices for collecting, processing, and storing employee data. The policy should include information on the types of data collected, the purposes for which the data is collected, and the security measures to protect the data. A “Cookie” policy that is legally sound for online businesses and websites is required.
Implement Appropriate Security Measures – Businesses should implement appropriate security measures to protect employee data from unauthorized access, disclosure, and use. Unregulated employees using laptops with access to sensitive data commonly cause breaches. Develop a strategy to minimize exposure.
Provide Opt-Out and Do Not Sell Options – The CPRA requires businesses to provide employees with the right to opt out of selling their personal information. Businesses should allow employees to opt out and not sell their data. The key challenge here is ensuring that all employees are educated on this option and know how to proceed. This should not be a complicated step but easily accessible.
By implementing these best practices and steps, businesses can lay a groundwork for ensuring compliance with the CPRA when handling employee data.
FAQs
How do I find employee data?
Employee data can typically be found in various company records, such as HR databases, performance evaluations, payroll records, and other employment-related documents—all of the sensitive information within must be adequately safeguarded via security measures.
Is GDPR the same as CPRA?
GDPR stands for General Data Protection Regulation, a data privacy law that applies to companies operating in the European Union. CPRA stands for California Privacy Rights Act, a data privacy law that applies to companies operating in California.
What rights do Californian employees have under the CPRA?
California residents’ rights include the right to opt out of the sale of personal information and the right to request deletion of personal information. Additionally, employees can request and correct any currently collected data.
What is the importance of CPRA?
The CPRA is vital because it enhances the privacy rights of California residents, including employees, and imposes additional requirements on businesses for protecting personal information.
What is the importance of the right to privacy and protection of personal data?
The right to privacy and personal data protection is essential because it safeguards individuals’ fundamental rights and helps prevent data breaches, identity theft, and other privacy violations.
Closing
Compliance with the CPRA when handling employee data is crucial for businesses to avoid penalties and protect their employees’ privacy. The potential risks and challenges associated with employee data require businesses to protect sensitive information proactively. Adopting a privacy-by-design approach can address these concerns.
To ensure compliance with the CPRA, businesses should follow best practices such as creating a privacy policy, implementing access controls, and training employees on proper data handling practices. It is also vital to stay up-to-date on CPRA regulations and requirements and regularly review and update the internal data handling procedures.
At Captain Compliance, we understand the complexities and challenges of complying with data protection regulations like the CPRA. Our team of experts can guide and support businesses in achieving compliance with CPRA regulations and avoiding potential penalties. Contact us today to learn more about how we can help your business navigate the ever-changing landscape of data privacy regulations.