In 2018, California created a statute to regulate how companies and organizations collect and use personal information about their customers. The California Consumer Privacy Act (CCPA) gives consumers more control over their data. CCPA allows consumers to see what personal data a company collects and how they intend to use it. But who must comply with the CCPA? And does the CCPA apply to employees?
The CCPA compliance checklist isn’t very complex because the act mainly applies to businesses that sell goods or services to residents of California.
What Is A Service Provider?
According to the CCPA, a service provider is any legal entity specializing in providing services. To qualify as a service provider under CCPA, it must also fulfill the following requirements:
Operate for profit
Receive personal data about consumers from a business
Process the personal data on behalf of the business
An excellent example of a service provider is an email marketing company or an analytics provider. Payment processing and customer relationship management companies are other examples of service providers.
What Does A Service Provider Do Under The CCPA?
Again, a service provider is a legal entity offering services on behalf of your business. Often, they use personal data about your consumers to do so. The CCPA distinguishes a service provider from other entities, such as a third party and a business.
The main benefit of working with a service provider instead of a third party is that sharing personal data about consumers with a service provider isn’t considered selling the information if you follow the correct procedure.
Unfortunately, this privacy act places numerous demands on businesses that sell personal information about consumers. For instance, it requires such companies to put a “Don’t Sell My Personal Information” button on their websites, preferably on the homepage, to allow customers to inform them if they don’t want their information sold. But if you choose to work with a third party, the CCPA might decide that you are selling personal information about your consumers, even if you share the data for reasons other than monetary gain.
These CCPA requirements do not apply to your business if you share personal information about your customers with a service provider because this activity doesn’t count as selling. But you are still required to inform your consumers of the type of personal data you collect and share with the service provider and for what purpose.
Does CCPA apply to employees? Some of your employees might also be your customers. In any case, the CCPA defines a consumer as anyone residing in California. Therefore, if your employee lives in California, they automatically qualify as consumers.
In short, a service provider under CCPA is any legally registered company that offers services on behalf of your business and uses the personal information you provided it with the intention of making a profit.