Addressing GDPR And HR Compliance: How Can A Global Professional Employer Organization Solution Help?

In April of 2017, the European Parliament approved the General Data Protection Regulation (GDPR) which will officially be in compliance by all the members of EU starting 25th of May, 2018. The GDPR will affect any artificial person doing business while being a citizen of the EU. (European Union).

Non-compliance of GDPR can result in a loss of €10 -20 million or 3-4% of your company’s annual revenue. (European Union).

What is General Data Protection Regulation (GDPR)?

Initially drafted and put up in the European Parliament in 2016, the GDPR will be binding on all the EU citizens in May 2018. According to the EU, the main purpose of this legislation is to protect the regulation of private data in the global economic market.

A company’s clients may give away their data to the company for many reasons; personal address for the delivery of goods or phone numbers and emails for effective communication. Internal market has paved the way for a cross-border one and there is a substantial increase in local personal data being flown globally. (Council of the European Union, 2016)

The severity of this can be judged by the recent Facebook data breach that caused a ripple effect, injuring associated company Google as well. With GDPR, the EU attempts to protect the dangerous regulation of private data at such a global scale.

U.S Businesses Are More Susceptible to Risks of Non-Compliance

According to research, USA businesses are particularly vulnerable to changes in privacy laws for the following reasons: (Ovum)

  1. The USA market has a bad global track record for respective privacy rights, right after China.
  2. 50% of the USA businesses, whether correctly or incorrectly, expect to be penalized under the GDPR
  3. 7 out of 10 US-based companies operating in EU or/and the UK expect their expenses to increase exponentially after the new data regulations
  4. Approximately 70% are shifting business strategies according to the binding data privacy regulations

What are the Risks of Non-Compliance of GDPR and Global HR for U.S Companies?

In addition to the local SOX and exchange regulations, non-U.S employment, HIPPA, record keeping and data privacy laws, USA multinational entities now have an international obligation regarding breaches of private data as well.

Where Global HR compliance had previously been a source of nuisance restricted to in-country labor rules and regulation, it has extended its reach to US-based companies operating in the EU owing to GDPR.

Consequentially, companies will need to be aware of what remote workers’ data they can collect, careful with the ways they collect data (like credit cards, addresses, emails), and entirely alter the way in which they communicate with global talent.

With methods like freelancing and contracting, privacy of both the company and the employees can both be put at risk; exposing the companies to heavy penalties either way.

Monetary Consequences of HR and GDPR Non-Compliance

According to research, non-compliance of GDPR can result in a loss of €10 -20 million or 3-4% of your company’s annual revenue. (European Union).

Perhaps the most grave of all things to consider is the imposition of serious fines that may go up to 20 million Euros. The state’s supervisory authority implements the determination criteria which may be based on the nature of the violation, the intention, the data type and failure to report to or send notifications – many of which can take place at the hands of the company unknowingly. (European Union)

Conclusively, after late May, US multinational entities must create mechanisms that allow transparency in their database as well as create an effective mode of data correction, revision, deletion and transference of the said data.

The Solution

There is no escaping data regulation after GDPR and organizations need to seriously introspect and formulate strategies to avoid being caught in financial and legal grievances.

One of the many ways a company can take effective measures to minimize the risks associated with GDPR when hiring global workforces in EU is by relying on Global Professional Employer Organization Services. As a legal employer, PEO companies like us are authorized to collect your remote employees’ personal information within the restrictions of GDPR compliance.

Our company has the necessary expertise to assist your company in an analysis of the implications of GDPR linked with global employment. We can address global HR compliance and consequentially recommend the preventative and corrective measures of the risks involved.

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