Employee data protection involves ensuring the confidentiality of employees’ personal information from unauthorized access, use, disclosure, alteration, or destruction. This data can include information such as names, addresses, social security numbers, health information, and financial data.
Employers have a legal obligation to protect employee data in most countries. In the European Union, the General Data Protection Regulation (GDPR) sets out strict requirements for employee data protection. In the United States, there is no federal law that specifically governs employee data protection, but there are several state laws that do.
This article will discuss major factors to consider about employee data protection policy in your organization and review global data privacy laws on HR data privacy compliance across various countries and continents.
Impact of privacy laws on HR data management
Various data privacy laws, like GDPR and PIPL, have been implemented around the world to enhance HR data protection. In this section, we will explore the impact of these privacy laws on HR data management.
- Increased transparency
The guidelines and restrictions laid out by privacy laws have compelled employers to be more transparent with collecting, processing, and storing employee data. For instance, the European GDPR compels employers to be more transparent with employee data. The same can be seen in the Chinese PIPL and some other privacy laws worldwide.
- Stringent requirements
Unlike in the past, the requirements for collecting, processing, storing, and transferring data are now stringent. Employers must now seek employees’ consent to collect, process, store, or transfer employee data.
- Data minimization
Employers are now required by data privacy laws to only collect the minimum amount of data necessary to fulfill their needs. This prevents employers from arbitrarily demanding data from their employees.
- Data portability
Thanks to privacy laws, employees now have the right to access and obtain a copy of their personal data from their employer in a commonly used format. They can also transfer this data to another organization, which gives them more control over their information.
- Right, to erase the data
In the past, employers had unrestricted access to keep former employees’ data for an indefinite period. However, with the introduction of privacy laws, an employee now holds the right to request their employer to delete their personal information upon leaving the organization, and the employer is obligated to fulfill this request.
Global data privacy laws on data protection for HR
This section will review some global data privacy laws on HR data protection requirements. They can also be described as data residency requirements by country.
EU General Data Protection Regulation (GDPR)
The GDPR is a regional data privacy policy for all EU countries and organizations that have operations in the EU. Its privacy laws apply to how organizations collect, process, store, and transfer customer and employee data. Here are a few things to note as a business leader regarding how the GDPR applies to HR data protection:
- Obtaining consent: Employers must obtain consent from employees before collecting or processing their personal data unless there is another legal basis for processing the data.
- Transparency: Employers must be transparent about how they collect, use, and store employee data. This includes providing employees with clear and concise information about their data rights.
- Data minimization: Employers should only collect and process the minimum amount of employee data necessary for the intended purpose.
- Data storage limitation: Employers should only store employee data for as long as it is necessary for the intended purpose.
- Data security: Employers must take appropriate technical and organizational measures to protect employee data from unauthorized access, use, disclosure, alteration, or destruction.
- Employee rights: Employees have several rights under the GDPR, including the right to access their data, the right to have their data corrected or deleted, and the right to object to the processing of their data.
Employers that do not comply with the requirements of the GDPR will face penalties such as fines.
U.S. data privacy laws for employee data
U.S. HR data compliance refers to the legal obligations that employers have to protect the privacy and security of employee data. Several federal and state laws govern HR data compliance, including:
- The Fair Credit Reporting Act (FCRA).
- The Health Insurance Portability and Accountability Act (HIPAA).
- The Gramm-Leach-Bliley Act (GLBA).
- California Consumer Privacy Act (CCPA).
- Virginia Consumer Data Protection Act (VCDPA).
- Colorado Privacy Act (CPA).
- Connecticut Data Privacy Act (CTDPA).
- Utah Privacy Act (UTP).
- Maine Data Privacy Law (MDPA).
- Illinois Biometric Information Privacy Act (BIPA).
- Delaware Data Privacy Act (DEDPA).
- Indiana Consumer Privacy Act (ICPA).
- Iowa Consumer Privacy Act (ICPA).
These laws vary in their scope and requirements, but they all give employees certain rights over their personal data, such as the right to access, delete, and correct their data.
It is important to note that these laws only apply to businesses that meet certain thresholds, such as having a certain number of employees or collecting a certain amount of personal data.
Employers should carefully consider the applicable state laws when collecting, using, and storing employee data. By understanding these laws, employers can help protect their employees’ privacy and avoid the risks associated with non-compliance.
China data privacy laws for employee data
China has two data privacy laws that are also an employee data protection policy for HR management. These laws are as follows:
- Personal Information Protection Law (PIPL). This is a comprehensive data privacy law for all organizations that process the personal information of all Chinese residents. It sets out guidelines for companies to follow as they collect, process, store, or transfer the personal data of Chinese residents. This law can also pass for an HR data protection policy, as it applies to how employers manage employee data.
- The Cybersecurity Law: This law regulates the security of information systems in China. It applies to all organizations that operate information systems in China, including organizations that collect or process employee data. The Cybersecurity Law requires organizations to take appropriate technical and organizational measures to protect the security of their information systems, including employee data.
In addition to these laws, several industry-specific regulations, such as the Financial Information Security Management Measures (FISM) and the Medical Insurance Personal Information Protection Measures, may apply to employee data.
Singapore data privacy laws for employee data
Singapore has several laws that apply to employee data privacy, and they are as follows:
- The Personal Data Protection Act (PDPA): The PDPA is a comprehensive law that applies to all organizations that collect, process, or use personal data in Singapore. It sets out several requirements for organizations, including obtaining consent from individuals before collecting or processing their personal information, taking appropriate technical and organizational measures to protect personal information, and providing individuals with certain rights, such as the right to access and delete their personal information.
- The Employment Act (EA): The EA is a law that regulates the employment relationship between employers and employees in Singapore. The EA does not specifically address data privacy, but it does require employers to keep employee information confidential.
These laws also spell out penalties for organizations that flaunt them.
India data privacy laws for employee data
India does not have a specific data privacy law for employee data. However, several general data privacy laws apply to employee data, such as the Information Technology Act of 2000 (IT Act) and the Personal Data Protection Bill of 2022 (PDP Bill).
The IT Act requires organizations to take reasonable steps to protect personal information from unauthorized access, use, disclosure, alteration, or destruction. The IT Act also prohibits organizations from collecting or processing personal information without the individual’s consent unless there is an exception.
The IT Act mandates that organizations implement appropriate measures to safeguard personal information from unauthorized access, use, disclosure, modification, or deletion. Furthermore, the IT Act expressly forbids organizations from acquiring or handling personal information unless explicit consent is obtained from the relevant individual, except in cases where specific exceptions apply.
Furthermore, according to the provisions of the PDP Bill, organizations are obligated to secure consent from individuals before the collection or processing of their personal data unless specific exceptions apply. Additionally, the PDP Bill mandates that organizations must implement appropriate measures to safeguard personal data from unauthorized access, utilization, disclosure, modification, or deletion.
UAE data privacy laws for employee data
The Federal Decree No. 45 of 2021 of the United Arab Emirates (UAE) on the Protection of Personal Data (PPDL) also covers employee data privacy in the UAE. This law applies to all organizations operating in the UAE, irrespective of their location; so far, they collect, process, or utilize personal data. It can also pass for an HR and data protection policy.
Below are the requirements of the PDPL:
- Employers must obtain consent from individuals before collecting or processing their personal data, except in specific cases.
- Employers must be transparent in how they handle employee data, including providing information about data rights.
- Employers should only gather and use the necessary employee data for the intended purpose.
- Employee data should only be retained for as long as necessary.
- Employers must implement security measures to protect employee data.
- Employee Rights: Individuals have rights under the PPDL, such as access, correction, deletion, and the ability to object to data processing.
Non-compliance can result in fines of up to AED5 million (approximately US$1.3 million). Employers in the UAE need to adhere to these regulations to ensure data privacy and avoid potential penalties.
Mitigating data residency risks with InCountry
InCountry has developed a Data Residency-as-a-Service platform that effectively addresses these challenges. InCountry platform integrates with Workday, SAP SuccessFactors, Oracle Taleo, and HCM Cloud in collaboration with Talent Systems, enabling businesses to distribute and localize their employees’ and candidates’ regulated data in countries with stringent data regulations.
Here are some benefits your business can expect with InCountry that mitigate data residency risks:
- Data Sovereignty: InCountry ensures that data collected is stored and processed within the same country. This enables organizations to adhere to data privacy regulations like the General Data Protection Regulation (GDPR).
- Data Security: InCountry employs various security measures, including encryption, access controls, and regular data backups, to safeguard data against unauthorized access, usage, disclosure, modification, or loss.
- Data Compliance: InCountry collaborates with organizations to ensure their compliance with data privacy laws. This entails offering guidance on data collection, processing, and storage practices.
- Data Flexibility: InCountry enables organizations to store and manage data in the country of origin, reducing latency and enhancing overall performance.
Get in touch and let’s discuss your needs and show how much value we can contribute to your company.