Increasingly demanded by consumers, data privacy laws can create onerous burdens on even the most well-meaning businesses. California presents plenty of evidence to back up this statement, as more than half of organizations that do business in California still aren’t compliant with the California Consumer Privacy Act (CCPA), which went into effect earlier this year.
As companies struggle with their existing compliance requirements, many fear that a new privacy ballot initiative – the California Privacy Rights Act (CPRA) – could complicate matters further. While it’s true that if passed this November, the CPRA would fundamentally change the way businesses in California handle both customer and employee data, companies shouldn’t panic. In fact, this law presents an opportunity for organizations to change their relationship with employee data to their benefit.
CPRA, the Californian GDPR?
Set to appear on the November 2020 ballot, the CPRA, also known as CCPA 2.0 or Prop 24 (its name on the ballot), builds on what is already the most comprehensive data protection law in the US. In essence, the CPRA will bring data protection in California nearer to the current European legal standard, the General Data Protection Regulation (GDPR).
In the process of “getting closer to GDPR,” the CCPA would gain substantial new components. Besides enhancing consumer rights, the CPRA also creates new provisions for employee data as it relates to their employers, as well as data that businesses collect from B2B business partners.
Although controversial, the CPRA is likely to pass. August polling shows that more than 80% of voters support the measure. However, many businesses do not. This is because, at first glance, the CPRA appears to create all kinds of legal complexities in how employers can and cannot collect information from workers.
Fearful of having to meet the same demanding requirements as their European counterparts, many organizations’ natural reaction towards the prospect of CPRA becoming law is fear. However, this is unfounded. In reality, if the CPRA passes, it might not be as scary as some businesses think.
CPRA and employment data
The CPRA is actually a lot more lenient than the GDPR in regard to how it polices the relationship between employers and employees’ data. Unlike for its EU equivalent, there are already lots of exceptions written into the proposed Californian law acknowledging that worker-employer relations are not like consumer-vendor relations.
Moreover, the CPRA extends the CCPA exemption for employers, set to end on January 1, 2021. This means that if the CPRA passes into law, employers would be released from both their existing and potential new employee data protection obligations for two more years, until January 1, 2023. This exemption would apply to most provisions under the CPRA, including the personal information collected from individuals acting as job applicants, staff members, employees, contractors, officers, directors, and owners.
However, employers would still need to provide notice of data collection and maintain safeguards for personal information. It’s highly likely that during this two-year window, additional reforms would be passed that might further ease employer-employee data privacy requirements.
Nonetheless, employers should act now
While the CPRA won’t change much overnight, impacted organizations shouldn’t wait to take action, but should take this time to consider what employee data they collect, why they do so, and how they store this information.
This is especially pertinent now that businesses are collecting more data than ever on their employees. With companies like the workplace monitoring company Prodoscore reporting that interest from prospective customers rose by 600% since the pandemic began, we are seeing rapid growth in companies looking to monitor how, where, and when their employees work.
This trend emphasizes the fact that the information flow between companies and their employees is mostly one-sided (i.e., from the worker to the employer). Currently, businesses have no legal requirement to be transparent about this information exchange. That will change for California-based companies if the CPRA comes into effect and they will have no choice but to disclose the type of data they’re collecting about their staff.
The only sustainable solution for impacted businesses is to be transparent about their data collection with employees and work towards creating a “culture of privacy” within their organization.
Creating a culture of privacy
Rather than viewing employee data privacy as some perfunctory obligation where the bare minimum is done for the sake of appeasing regulators, companies need to start thinking about worker privacy as a benefit. Presented as part of a benefits package, comprehensive privacy protection is a perk that companies can offer prospective and existing employees.
Privacy benefits can include access to privacy protection services that give employees privacy benefits beyond the workplace. Packaged alongside privacy awareness training and education, these can create privacy plus benefits that can be offered to employees alongside standard perks like health or retirement plans. Doing so will build a culture of privacy which can help companies ensure they’re in regulatory compliance, while also making it easier to attract qualified talent and retain workers.
It’s also worth bearing in mind that creating a culture of privacy doesn’t necessarily mean that companies have to stop monitoring employee activity. In fact, employees are less worried about being watched than they are by the possibility of their employers misusing their data. Their fears are well-founded. Although over 60% of businesses today use workforce data, only 3 in 10 business leaders are confident that this data is treated responsibly.
For this reason, companies that want to keep employee trust and avoid bad PR need to prioritize transparency. This could mean drawing up a “bill of rights” that lets employees know what data is being collected and how it will be used.
Research into employee satisfaction backs up the value of transparency. Studies show that while only 30% of workers are comfortable with their employer monitoring their email, the number of employees open to the use of workforce data goes up to 50% when the employer explains the reasons for doing so. This number further jumps to 92% if employees believe that data collection will improve their performance or well-being or come with other personal benefits, like fairer pay.
On the other hand, most employees would leave an organization if its leaders did not use workplace data responsibly. Moreover, 55% of candidates would not even apply for a job with such an organization in the first place.
With many exceptions for workplace data management already built-in and more likely to come down the line, most employers should be able to easily navigate the stipulations CPRA entails.
That being said, if it becomes law this November, employers shouldn’t misuse the two-year window they have to prepare for new compliance requirements. Rather than seeing this time as breathing space before a regulatory crackdown, organizations should instead use it to be proactive in their approach to how they manage their employees’ data. As well as just ensuring they comply with the law, businesses should look at how they can turn employee privacy into an asset.
As data privacy stays at the forefront of employees’ minds, businesses that can show they have a genuine privacy culture will be able to gain an edge when it comes to attracting and retaining talent and, ultimately, coming out on top.