Human Resources (HR) departments across India are facing significant challenges as new data protection rules take shape.
The Digital Personal Data Protection (DPDP) Act, 2023, has introduced stringent requirements for data collection and processing, prompting HR professionals to overhaul their job application processes to ensure compliance.
DPDP Act and Its Implications on HR Departments
The DPDP Act mandates that data collection must be purposeful, limited to what is necessary, and aligned with either legitimate uses or specific, informed consent.
This means that HR departments must review and update job application forms and data collection processes to comply with the new regulations.
The Act also introduces the concept of “data fiduciaries,” entities responsible for handling personal data, and outlines their duties and obligations.
One of the key challenges HR departments face is determining whether consent is mandatory under all circumstances and whether the exemptions provided for employees’ data extend to personal data belonging to non-employees, such as independent contractors or gig workers.
Additionally, HR professionals must navigate the ambiguities in the Act, such as the lack of clear definitions for “employment purposes” and the full scope of legitimate uses.
Corporate lawyers and HR teams are working closely to anticipate challenges in managing critical employee data.
Law firms such as Cyril Amarchand Mangaldas, Kochhar & Co, and Alpha Partners are fielding diverse queries from companies’ HR and legal teams to overhaul their data protection policies.
The expectation is that implementing the DPDP Act may significantly alter hiring practices across India Inc.
Impact on Hiring Practices
The DPDP Act’s emphasis on purposeful data collection and informed consent is expected to slow down the hiring process as companies take extra precautions to ensure compliance.
HR departments will need to implement more rigorous verification processes, including background checks and reference checks, to ensure that the data collected is accurate and necessary for the hiring process.
Under the DPDP Act, employees have the right to request corrections or updates to their data, and employers must provide mechanisms to address these promptly.
This adds another layer of complexity for HR departments, which must ensure that they have systems in place to handle such requests efficiently.
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