In the era of digital transformation, the management of personal data has emerged as a vital component of human resources (HR) management.
Organizations now gather and analyze extensive amounts of sensitive employee information, encompassing personal particulars and performance assessments. Consequently, the role of data controllers in HR has assumed a prominent position. They shoulder the responsibility of safeguarding this data while adhering to data protection regulations.
In California, Latin America and Europe, privacy (data protection) is considered a fundamental right. This right consists of the ability to keep certain information about us, exclusive to us, and to control who and what has access to it. As Louis Brandeis said, it is right “to be let alone.”
According to the General Data Protection Regulation (GDPR), two key players in maintaining this privacy are the data controller and the data processor. While they both play vital roles in the management of personal data, there are significant differences between them.
Let us explore the roles of a data controller vs. processor and understand their key differences.
What is a data controller?
A data controller is an entity that determines the purposes, conditions, and means of processing personal data. Employers are thus responsible for collecting, managing, and safeguarding employee data, including data regarding recruitment, onboarding, performance assessments, and payroll. Consequently, HR departments play a crucial role in ensuring the lawful and ethical processing of employees’ personal data.
Responsibilities of a data controller
It is important to remember that the controller is the “owner” of the information that has been collected from the “data subject” (the individual linked to the data).
Data controllers must address responsibilities such as:
- Compliance: Ensuring compliance with data protection regulations.
- Transparency: Informing employees about the types of data collected, the purposes of processing, and the duration for which the data will be retained.
- Security measures: Safeguarding employee data from unauthorized access, breaches, and cyber threats.
- Data minimization: HR data controllers should avoid over-collecting information and regularly review the data they hold to ensure its relevance.
- Data collection, purpose limitation, and lawful processing: Controllers are required to respect and uphold the rights of data subjects. This entails offering clear and transparent information regarding the processing activities, including informing users about their rights to access, rectify, and erase their personal data:
- Data breach notification and incident response: In the unfortunate event of a data breach, controllers are required to promptly notify the relevant authorities and affected individuals, where necessary.
- Data subject access rights (DSARs): HR data controllers need to facilitate employees’ rights, such as the right to access their personal data, the right to rectify inaccuracies, and the right to erasure.
What is a data processor?
The data processor is the company, individual, organization or business that processes personal data on behalf of the controller. In the context of HR, a data processor can be an external service provider or an internal department that manages employee data processing activities. These activities can range from payroll processing and benefits administration to recruitment and performance evaluations. Also in this category, we must include sub processors, who assist processors in conducting specific management activities and play a supporting role in the data processing chain.
In summary, the data controller is responsible to the individual, whereas the data processor is responsible to the controller.
The data controller is responsible to the individual, whereas the data processor is responsible to the controller.
Responsibilities of data processors
Processors may not have the same level of control as controllers, but they still have a fair share of obligations. They need to process personal data only as instructed by the controller, implement security measures, and assist the controller in fulfilling their legal obligations.
When it comes to data processing, it is important for all parties involved to have their legal agreements and contracts in place. These documents lay out the responsibilities, obligations, and rights of both parties to ensure everything is done by the book.
HR data processors are required to comply with data protection regulations and must address responsibilities like:
- Confidentiality: HR data processors manage sensitive employee information, and maintaining confidentiality is of utmost importance.
- Sub processing: If a data processor engages a subcontractor to assist with processing tasks, it is crucial to ensure that the subcontractor adheres to the same data protection standards.
- Record keeping: Processors must maintain comprehensive records of their data processing activities, including the types of data processed, the purposes of processing, and any data transfers that occur.
- Data subject access rights (DSARs): HR data processors often serve as mechanism by which controllers can fulfill requests from employees and applicants who are exercising their data subject rights, such as the right to erase their personal data.
Another obligation arises when processors should actively support controllers in meeting their privacy obligations. This includes providing necessary assistance in responding to data subject requests, conducting privacy impact assessments, and implementing appropriate security measures.
To put this into context, let us describe the role of UKG as a data processor through the Privacy Manager feature: When UKG customers receive a request from a former employee or job candidate to have their data erased, they can easily submit the request through our Privacy Manager tool. This efficient system promptly processes and fulfills the request, ensuring the privacy compliance of our valued customers.
What is the accountability principle?
Data controllers in HR play a critical role in managing and protecting employee data. They are responsible for maintaining meticulous records of their data processing activities, ensuring compliance with legal requirements, and establishing a robust consent management system. The accountability principle is a structured part of the “7 essential principles from GDPR,” —an inspiration source to most of the comprehensive privacy regulations around the globe.
A case study involves a company that successfully embraced data controller accountability by 1) prioritizing data protection, 2) implementing comprehensive policies, and 3) educating employees at all levels. With these principles, the company created a culture of accountability.
The importance of a privacy governance framework
However, a culture of accountability only works when there is seamless collaboration between data controllers and data processors.
To enhance collaboration among all parties involved, it is critical to establish a robust privacy governance framework. This framework should define all roles and responsibilities, establish effective communication channels, and assure regular review and improvement of privacy practices.
Many HR functions involve third-party vendors, such as payroll processors or recruitment agencies, so it is important that these vendors also comply with data protection standards. This requires a collaborative approach like sharing information and documentation to ensure everyone is following the same privacy playbook.
Data privacy: The era of comprehensive regulations
The GDPR was the seed. Now everyone is harvesting from the same garden. Privacy regulations worldwide are following the same updates with the purpose of giving more power to the individual (data subject).
These updates affect how data controllers and data processors must comply with data processing requirements. Examples include:
- In Colombia, the update to the Credit Reporting Act binds corporate rules for controllers to transfer personal data between data controllers.
- In Finland, the amendment to the Protection of Privacy in Working Life Act requires controllers to adopt whistleblowing channels linked to the collection of data from employees and applicants.
- In Thailand, an update to the data privacy act demands controllers to adopt security measures while processing personal identifiable information (PII) and governing rules that affect processors.
Adopting stronger positions on data privacy regulations for controllers and processors is the next move worldwide.
To learn more about the new framework that the U.S. and European Commission recently adopted that allows controllers and processors to self-certify, read this post on the Data Privacy Framework.
Best practices to ensure privacy compliance
Keeping up with the regulations can be a lot, so having these best practices in place will help set you up for success.
Here are the best practices that each organization should adopt immediately to ensure privacy compliance:
For data controllers:
- Implement clear data collection and consent mechanisms, if relying on consent as the legitimate basis for retaining data.
- Develop robust data protection policies and procedures.
- Conduct regular data protection impact assessments (DPIAs).
- Appoint a Data Protection Officer (DPO) to oversee compliance efforts.
- Maintain transparent communication with data subjects regarding their rights and how their data is being processed.
- Notify the Data Protection Authority immediately in case of a data breach.
- Communicate promptly with data subjects to inform about a data breach and how to withdraw their affected PII.
For both data controllers and data processors:
- Stay updated with changes in data protection regulations and guidelines.
- Continuously educate and train employees on data protection best practices.
- Adopt emerging technologies and tools to enhance data security and privacy.
- Engage in industry forums, conferences, and networks to learn from peers.
- Regularly review and update data protection policies and procedures to align with changing industry standards and practices.
HR data controllers are a critical component to data protection
Data controllers in HR play a decisive role in the management and protection of employee data in today’s digital era. Their responsibilities encompass ensuring compliance with data protection regulations, securing sensitive information, and fostering transparency with employees.
However, they face challenges such as navigating complex regulations (like data retention laws) and facilitating cross-border data transfers.
To overcome these hurdles, implementing best practices like robust data governance, comprehensive employee training, and privacy by design can assist HR data controllers.
Compliance with data protection regulations is crucial for maintaining employee trust and ensuring legal adherence.
Despite the challenges posed by vendor management and evolving regulations, data processors can effectively overcome these obstacles by implementing best practices, robust security measures, and continuous training.
By fulfilling their responsibilities, HR data processors play a vital role in ensuring the smooth and secure functioning of HR operations, while also prioritizing the privacy and rights of employees.
To foster effective collaboration, it is essential to establish a privacy governance framework that clearly outlines roles, responsibilities, and communication channels among all parties involved.
Regular communication and information sharing can ensure that everyone is aligned with privacy goals and obligations. Ongoing training and awareness programs can also help enhance understanding and compliance. Additionally, conducting thorough vendor assessments, implementing clear contractual provisions, and regularly monitoring sub processors can contribute to a strong and secure privacy management ecosystem.
