In May 2018, the General Data Protection Regulation (GDPR) went into effect, strengthening the rights of EU residents regarding data privacy and protection. Essentially, these rights comprise two things:
- Besides transparency, organizations must provide individuals with the ability to review, amend, or challenge the processing of their personal information.
- To protect individual data, organizations should implement security measures and manage the liability for any breach or misuse of this information.
This article will discuss how GDPR may applyies to small businesses and some of the essential tasks these businesses need to determine whether the data privacy of their clients is being protected and whether they are GDPR compliant.
GDPR and Small Businesses
Small Businesses with 250-500 Employees
A small company is generally considered as one with fewer than 500 employees in the United States. It is a requirement under GDPR for companies to keep a record of all data processing operations, if they meet certain thresholds. If subject to GDPR, the GDPR’s record-keeping requirements apply to every business with 250-500 employees.
Whether a Data Protection Officer (DPO) is needed is not determined by the business’ size but by the scale and sensitivity of its core processing operations. DPOs are knowledgeable about data protection legislation and processes. A person in this position is also responsible for notifying the authorities of any data breaches.
Small Businesses with Fewer Than 250 Employees
Generally speaking, Article 30 of the GDPR exempts small businesses with less than 250 workers from the need to maintain records of their processing operations, whether as a controller or processor. The size exemption does not apply, however, if the businesses are processing data in any of the following activities:
- The data processing operations may jeopardize an individual’s rights and freedoms.
- The information to be processed may involve an individual’s racial origin; political, religious, or philosophical opinions; union membership; genetic or biometric data; or the individual’s health or sexuality.
- The personal data involved are related to criminal offender, conviction, or arrest-related.
- The personal data is processed regularly.
As long as these minor requirements are met, small businesses should consider themselves equivalent to larger firms under GDPR for Article 30 compliance requirements.
Small businesses are generally understood to have fewer resources than large corporations. Thus, the Information Commissioner Office (ICO) will consider any smaller company’s challenges in complying with the new legislation.
GDPR Compliance of Small Businesses
In most instances, your personal data, client information, and company connections will all have this kind of information in some manner. Therefore, let us examine the GDPR’s fundamental principles and how you will be required to comply with them.
Prepare to add more check-the-boxes to your systems since enhanced consent demands getting permission for each use of a customer’s data. Suppose your business requests an email address and permission to deliver purchase information. In that case, it might need permission once more before utilizing that email for marketing reasons. Businesses should phrase all permission requests in a manner that is understandable to the company’s targeted customers.
Access and Control
Data owners should be given control over their information, including the right to delete, receive and reuse their data. It also includes the ability to move, copy, or transfer their data securely. As a business owner, you may need to provide a system for customers to control the use of their personal data, from data entry to data deletion.
Data Breach Reporting
Businesses may have to notify data owners if a security breach occurs. While this may conjure up visions of large-scale attacks, it also encompasses minor errors such as granting access to your data to a contractor or an employee losing a laptop. No matter how minor the breach is, the business might have to inform the data owner about it if it poses risks to the data owner.
After the data is provided, you’ll need security measures in place to preserve it. Merely said, you should see that data is appropriately protected. Thus, it would be best if you consider encrypting any database that holds your clients’ data rather than simply password protecting it.
You may need to provide proper surveillance to third-party applications and organizations that are involved in the data processing. When using online newsletter services, the use of mailing lists should be in GDPR compliance.
Additional GDPR Compliance
The following factors may help illustrate the most critical actions that US small businesses will need to do to be GDPR compliant:
Audit the Data
Proper auditing of data for GDPR compliance is not a simple undertaking. Thus, businesses must make wise decisions. They may be required to do Data Protection Impact Assessments (DPIAs) before initiating any data processing. It proactively protects data and assesses potential risks to data subjects associated with any new data processing. Most European data protection authorities provide guidelines on their websites on DPIAs and when they should be conducted.
Audit the Service Providers
Auditing your service provider’s compliance is a chore that many US businesses struggle with and may be the source of your business’s most significant risk. Businesses need to evaluate and execute data processing agreements with third-party service providers that handle personal data on your behalf. GDPR requires the data controller to enter contracts, and the data processor may only act on the controller’s orders. A service provider that does not comply with GDPR may be subject to non-compliance and put the controller at risk.
What Happens To Non-Compliant Small Businesses?
Article 83 of the GDPR alerts enterprises to infractions and imposes discretionary fines. It incentivizes enterprises to handle personal data legally and responsibly.
GDPR Compliance is Important for Small Businesses
GDPR compliance is crucial for both small and large businesses. Many businesses have hired a Data Protection Officer (DPO) to monitor GDPR compliance.
Inadequate comprehension is a poor excuse for GDPR non-compliance. Whether it is a sole proprietor or a global corporation, businesses should review how they handle personal data and verify that suitable processes and policies are in place. Systems for granting data access requests and systems for detecting and reporting data breaches may need to be in place. Businesses should also implement appropriate technical and organizational protections to oversee the safety and security of data.