HRMS software is an end-to-end encrypted system that encrypts sensitive and confidential employee information and ensures employees’ data is stored safely and securely in a company data repository. However, the government has just released a personal data protection bill to strengthen data security and eliminate the fear of data breaches. This bill assures that employee data collection, processing, and analysis can be safe and that personal data protection online or offline can be initiated securely.
Employers who disobey the PDP bill must pay high data breaches or displacement penalties. Here, we will discuss the PDP bill and its impact on HRMS data management.
What is the PDP bill in India?
It sought to establish a comprehensive legal framework to protect individuals’ data privacy while addressing the needs of businesses and the government. Although the PDP Bill was later replaced by the Digital Personal Data Protection (DPDP) Act of 2023, its key elements laid the foundation for India’s approach to data protection.
Impact of PDP Act on HRMS Data Management
Digital Personal Data Protection Bill ensures data protection in various ways by introducing people with clear rules and guidelines for handling personal information in the digital realm.
Let us discuss how deploying a robust HRMS will help automate personal data management with the help of the PDP Bill.
1. Data Processing Rules
The PDP bill sets forth rules and regulations for adequately processing employee data. It defines the lawful grounds for data processing, such as obtaining explicit consent from individuals, fulfilling contractual obligations, or complying with legal requirements.
By establishing these rules, the bill ensures that HR processes analyze and maintain personal data fairly and lawfully.
2. Individual Rights
The PDP bill grants individuals certain rights over their data. After getting special permission from management, employees can correct data inaccuracies or delete unwanted data.
By empowering individuals with these rights, the bill gives them greater control over their personal information.
3. Data Security Measures
The PDP bill changes the security process for employee data. Organizations need a bill to improve their security measures and protect personal data from unauthorized access, disclosure, alteration, or destruction.
It may set specific standards for data security and require organizations to report any data breaches promptly.
4. Data Localization
HRs are often required to store and process certain kinds of employee data on company premises. The personal data protection bill helps HR handle data without fear of data breaches.
The law ensures that data is subject to local laws or company policy and protections, reducing the risk of data exposure to foreign jurisdictions with potentially weaker data protection laws.
5. Regulatory Authority
The bill may establish a regulatory authority responsible for overseeing and enforcing employee data protection laws.
This law can investigate complaints, conduct audits, issue fines or penalties for non-compliance, and provide proper guidance to organizations on data protection best practices.
6. Cross-Border Data Transfers
Companies are often required to transfer personal data outside the country. The bill ensures that organizations follow adequate safeguards to protect company data during this transfer.
It may involve standard contractual clauses or other legally recognized mechanisms for cross-border data transfers.
7. Accountability and Compliance
The bill ensures the accuracy and accountability of data processing activities. Organizations may be required to maintain records of their processing activities and demonstrate compliance with the relevant data protection laws.
Overall, a well-designed Data Protection Bill can provide a comprehensive framework for safeguarding employee personal data, protecting individual privacy rights, and fostering a culture of responsible data handling in the digital age.
By adhering to the provisions of the Bill, organizations can build trust with their customers and stakeholders while ensuring that personal data remains secure and confidential.
Key Highlights of the DPDP Act
The Personal Data Protection Bill, introduced as a pivotal step in 2017, evolved significantly over the years. In 2023, it reached a broad scale, becoming an act that focused on digital personal data, included provisions for non-personal data, and required extensive localization. The transformation from a bill to an act underscored the far-reaching impact of the PDP Bill, which ensures transparency in the digital realm. The following key features, now enshrined in the Act, are the key functionalities.
- The bill governs the high-end protection of employee personal data within India. It covers data collected online or offline, then analyses them accurately and stores them securely for future practices.
- During personal data processing, there should be an individual’s consent; however, for specific legitimate uses like voluntary data sharing and processing, some legal functions like issuing permits and licences or providing benefits and services.
- One of the written consent forms for the PDP Act is for data fiduciaries. It ensures the accuracy of the data and safeguards it for future use. One of the primary concerns is whether any data breach or misplaced is not happening there.
- The Act specifies some principle rights for individuals, including access to information, the right to request data-related correction, and the right to seek government redress.
- To scrutinize the PDP act successfully, the government established the Data Protection Board of India, which will adjudicate cases of non-compliance with its provisions.
What is the DPDP Act for HR professionals?
The Digital Personal Data Protection Act of 2023 has significant implications for HR professionals as they manage the sensitive personal data of employees, candidates, and other stakeholders. Below are the key aspects of the Act for HR professionals:
➔ Lawful Data Collection
One of the primary responsibilities of HR professionals is to collect, analyze, and securely store employees’ personal and professional data. The DPDP Act ensures that the data are used only for lawful employment. Moreover, the Act provides that it is necessary for recruitment, payroll, benefits, and other HR activities.
➔ Informed Consent
Employees and candidates must provide explicit and informed consent for their data to be processed. Informed consent means that the individual understands what data is being collected, how it will be used, and to whom it will be disclosed. This is a fundamental principle of the PDP Act, except in cases where processing is necessary for legal obligations or employment contracts.
➔ Data Minimization
Often, employees provide irrelevant data in the data repository. The Personal Data Protection law assures some rules that allow HR to collect only the personal data necessary for specific purposes, avoiding excessive or irrelevant information.
➔ Employee Rights
There are numerous sections in HRMS software. Some are editable, and the rest are only readable. The readable section is fixed only for the HR professional and admin team. The PDP act provides end-to-end assurance that employees have the right to access, correct, and request deletion of their data. HR must provide mechanisms to address these requests efficiently.
➔ Data Security
HR often faces different challenges regarding data security. The PDP bill provides confidence to HR professionals in consenting to data breaches or unauthorized access. Personal data must be protected using appropriate security measures like encryption, access controls, and regular audits.
➔ Employee Retention
The PDP Act ensures that employees’ data is protected and secure throughout their employment and even after they leave the company. Once employees receive such data-related assurance, they feel safe and relaxed, which ultimately affects their long-term retention.
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➔ Cross-Border Data Transfers
Personal data is always very sensitive, and there is always some risk when transferred between two or more companies. It is often shared with entities outside India, such as global payroll or HR system. An HRM system and PDP consent provide high-end assurance that it complies with the central government rules on cross-border data transfers.
➔ Accountability
Organizations processing large volumes of data may need to appoint a Data Protection Officer (DPO). HR teams must coordinate with the DPO to ensure compliance with the Act.
➔ Vendor Compliance
Third-party service providers handling employee data, such as background verification or payroll vendors, must comply with the DPDP Act. HR teams must monitor and ensure their compliance.
➔ Policy Updates and Training
Under the DPDP Act, HR professionals are encouraged to review and update internal policies and employment contracts to ensure compliance. Conducting regular employee training on data protection rights and practices also becomes a proactive step, making HR professionals feel prepared and in control.
How does Pocket HRMS ensure compliance with PDP?
It is evident that the HRMS software is directly responsible for ensuring compliance with the Personal Data Protection Bill in handling employee data.
HRMS software developers like Pocket HRMS have already implemented employee data protection policies in their systems and are striving towards providing enhanced data protection to secure employees’ personal data and company databases.
Pocket HRMS employs Microsoft Azure cloud infrastructure, which provides advanced military-grade 256-bit encryption for saving company and employee data securely. This system prevents the database from unauthorized access and data breaches.
Complying with the PDP Bill rules and regulations, Pocket HRMS can store Sensitive Personal Identifying Information (SPII) securely with a multi-layered encryption system.
Features of Pocket HRMS Data Protection
- A centralized data maintenance service that encrypts, decrypts, and maintains employee personal data.
- Enterprise-grade 256-bit encryption with Microsoft Azure cloud infrastructure.
- User access control to ensure effective data abstraction.
- Well-scrutinized database for convenient application maintenance and compliant MIS reporting.
- Bulk data processing for simplified data imports and report generation.
End Note
The Digital Personal Data Protection Act, 2023, marks a transformative shift in HR operations, emphasizing accountability, transparency, and robust data security measures. For HR professionals, compliance is not merely a legal obligation but a strategic imperative to safeguard employee rights, foster organizational trust, and uphold ethical data practices. By aligning with the Act’s principles, HR teams play a pivotal role in ensuring data protection and strengthening the organization’s commitment to privacy in an increasingly digital landscape.
FAQs on Personal Data Protection
1. What is the complete form of PDP in law?
PDP is the personal data protection law that governs the privacy and secrecy of employees’ personal data in company data repositories.
2. What is the full form of PDP act?
The full form of PDP act is personal data protection act.
3. What is the DPDP Act for HR professionals?
The DPDP Act, 2023 mandates HR professionals to ensure lawful data handling, obtain informed consent, protect employee rights, secure data, ensure vendor compliance, and adopt transparent retention and deletion practices.
