What is the California Consumer Privacy Act (CCPA)?
In an age where an individual’s personal information is easily accessible by businesses and potentially malicious third parties, there’s never been more emphasis on the role organizations play in data privacy. When working with businesses, consumers want to know how their personal information is being used and expect it to be handled with care. To help address this need, the California Consumer Privacy Act (CCPA) was born.
Signed into law by California Governor Jerry Brown on June 28, 2018, the CCPA is a comprehensive data privacy law. The act, which goes into effect Jan. 1, 2020, is comparable to privacy laws in the European Union (General Data Protection Regulation) and Canada (The Digital Privacy Act).
The CCPA is designed to strengthen data security requirements for businesses and other organizations, and give consumers—California residents living in the state for anything other than a temporary or transitory purpose—more control over their personal information. The CCPA accomplishes this by creating a number of new consumer rights—rights organizations must protect in order to avoid major fines.
The Importance of the California Consumer Privacy Act (CCPA)
- The act has a wide scope and may extend well beyond California.
- Major enforcement actions and class-action lawsuits can stem from CCPA noncompliance.
- The CCPA could be used as a template for future privacy laws, including those issued by other states and the federal government.
- Organizations that fail to comply with the CCPA risk brand damage as well as reduced customer confidence and employee trust.
As such, the California Consumer Privacy Act (CCPA) places significant compliance obligations on any organization that employs California residents and grosses more than $25 million annually. What’s more, the CCPA has a broad definition of what it considers to be a consumer, meaning that it may apply to employees or California residents as they travel outside the state.
The details of the CCPA are complex and have major implications for businesses across the United States. Organizations in all states that collect personal information from consumers will need to determine whether they are subject to the law and, if so, understand what is expected of them. Among other things, the CCPA could lead to significant changes to an employer’s internal systems and processes as it relates to the collection, sale and disclosure of consumer information.
This guide is meant to help organizations understand their CCPA compliance burden and avoid potential fines or lawsuits. It includes an overview of the act, who it applies to and helpful steps employers should know to remain compliant. It should be noted that this guide is informative in nature and is not meant to substitute the advice of legal or insurance professionals.
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