The world’s largest companies will spend about $8 billion to follow the General Data Protection Rule. You may not need to spend billions if you operate in Europe, but you do need to become compliant.
You may have European employees or pay European vendors. If so, you need to be sure your payroll data handling is compliant with the new rules. If you’re wondering how the GDPR affects you, our guide will help you understand your obligations. We’ve also included some tips to help you get started.
What is the GDPR?
The General Data Protection Rule, or GDPR, is a new European Union law designed to protect people’s data. In light of data breaches, the GDPR reinforces the need for companies to secure their data.
The new rule, which went into effect on May 25, 2018, also calls on businesses to be more transparent. People need to know what information you’re collecting. They also need to know how you’ll use that information.
Finally, people also need to have the ability to opt out. One of the biggest effects of the GDPR has been on marketing and sales. If you mail out a marketing newsletter, you must now make it very clear how people can unsubscribe from the list.
Human Resources and the GDPR
While many people have talked about GDPR compliance in sales, it affects HR even more. This is because most businesses collect plenty of information about their employees. Some of this information is very personal and very sensitive. If you offer health benefits, you may need to ask employees for sensitive information. If your employees want family benefits, you may have to ask them about marital status. Your payroll data can also be sensitive. It contains information about wages and salaries. It might also include personal information, such as banking details or home addresses. Obviously, this information needs to be well protected.
New Employee Rights
Another thing GDPR payroll compliance demands is an acknowledgment of new employee rights. Data-subjects, the people who give you data, now have:
- The right to be forgotten
- The right to restrict processing
- The right to data portability
This means your employees can ask you to erase data about them when it is no longer needed. They can also ask you to transfer data to another controller in certain situations. They can even curtail your payroll data processing.
You must also get consent to collect data about data-subjects. This means your employees must consent to give over their data.
Making Payroll Data GDPR Compliant
The next question you have is how you can achieve payroll GDPR compliance. There are several steps you can take. The good news is that most of them are easy to put in place.
In fact, you might already be using some of them. When you hire a new employee, you may get their consent to put their information in your payroll system. If you don’t, you can add this consent to your employment contracts.
You should already be giving your employees their pay stubs in a secure way. This could be a self-service portal they access, or it might be an encrypted download. Look at the methods you’re using and make sure they’re GDPR compliant.
Stepping up Compliance and Security
You may already be GDPR compliant for some parts of your payroll processing. You may need to upgrade security or introduce a new method for other steps. In some cases, you’ll need new processes and measures for payroll data protection. For example, you might need to hire a data protection officer.
You’ll also need to design GDPR-compliant privacy notices for your employees. Another change is making sure employees can access their information. Transparency is key under the GDPR.
Finally, you may want to adopt new rules and standards to help govern your data policies. Consider standards about the information security management systems you use. Adopting a new standard could make it easier to achieve GDPR compliance.
Create a GDPR Action Plan
As you evaluate payroll and GDPR compliance, you’ll probably find you need to do more than add a clause to contracts. These steps can help you create an action plan to achieve compliance. First, assess the data you already have. Consider what you collect from your employees. Be sure to complete the data register, which is a record of data the GDPR requires you to keep.
Remember that under the GDPR, you can only collect certain kinds of personal data. Your data collection must serve a purpose. You can’t collect information for no reason. You might want to consider a GDPR audit. This allows you to review your processes and make suggestions for revision.
Next, you’ll want to look at your data retention policy. How long do you keep data? Remember the right to erasure.
You’ll also need to deal with policies around the other rights for your employees. How will you give them control of their information? How will you handle situations where they need to curtail the information you have?
Finally, make sure any partners you work with to process payroll are also GDPR compliant. If they’re not, you’ll need to push for compliance or look for a new partner. Improving your compliance may take time and money. It’s still better than facing the fines, which are equivalent to a percentage of your company’s annual income.
Make Payroll Compliance Easier
The GDPR pressures businesses to ensure their payroll data collection meets high standards. You must respect the rights of your European employees, and you must be transparent. Finally, you must be ready to take extra security measures.
All this adds up, making the task of payroll even more intensive than it already was. If you’re looking for ways to make payroll both compliant and easier to administer than ever, get in touch with us for some great paystub templates. Our expert team is here to help.