CA Amends California Consumer Privacy Act

At a Glance

California has enacted Assembly Bill 1281, amending the California Consumer Privacy Act (CCPA), effective January 1, 2021.

• CCPA’s temporary exemption for job applicants, current and former employees and independent contractors is extended until January 1, 2022;
• CCPA’s temporary exemption for business to business communications is extended until January 1, 2022; and
• AB 1281 only takes effect if the ballot initiative Proposition 24 is not approved by voters.

Introduction

On September 29, 2020, California Governor Gavin Newsom signed legislation to extend exemptions for employees and business to business communications for another year until January 1, 2022. These provisions are set to expire on January 1, 2021. The provisions of AB 1281 will only become effective if Proposition 24 is not passed by voters on November 3, 2020. Proposition 24, if enacted, would extend the expirations that are the subject of AB 1281 by two years, giving those subject to the CCPA additional time to comply.

Exemption for Job Applicants, Employees and Independent Contractors

Currently, personal information that employers collect from their employees is mostly exempt from the CCPA. However, the CCPA does provide job applicants, current and former employees, and independent contractors the following limited rights:

• California job applicants, current and former employees and independent contractors must receive a notice from employers at or before personal information is collected. The notice must include the categories of personal information the business collects and the purposes for collection.
• California residents have the right to institute a civil action and recover statutory damages for certain security incidents involving their personal information.

The exemption related to employee and job applicant data is set to expire on January 1, 2021. Under AB 1281, if the ballot initiative does not pass, then employers will have until January 1, 2022 before all provisions of the CCPA apply to workers.

Exemption for Business to Business Communications

Currently, the CCPA exempts personal information involved in business to business communications or transactions where the consumer is acting on behalf of a business, and the communications or transactions solely relate to providing or receiving a product or service to or from another business.

Businesses must still provide business to business consumers the right to opt out of the sale of their information and consumers retain their right to bring a civil action in the event of a security incident.

The business to business exemption is set to expire on January 1, 2021. Under AB 1281, if the ballot initiative does not pass, then the business to business exemption will remain in effect until January 1, 2022. 

Next Steps

Businesses subject to the CCPA now have more time to take advantage of the exemptions until at least January 1, 2022.

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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.