#10. Impact of Legal and Compliance Issues
Today’s legislative and regulatory requirements surrounding data privacy,
security, etc., are a bureaucratic nightmare that Kafka would have been
proud of.
Highly publicized instances of poor corporate governance, combined with
growing consumer concerns about security and privacy, have led us to an era
of interventionist and regulatory government involvement in many facets of
our business. Regulations or laws that we have to worry about include:
Affecting financial systems: Money laundering and support of
terrorism (FINTRAC), Sarbanes-Oxley and its upcoming
Canadian equivalent and others on a sector by sector basis
National security: Anti-Terrorism Act, Public Safety Act,
PATRIOT Act (for those of you that deal with or have a corporate
relationship with US based entities)
Privacy: PIPEDA (Federal private sector), Privacy Act (Federal
public sector), public sector in all provinces, private sector in
three, and health information privacy in four provinces
Privacy laws are in the process of fundamentally changing the way in which
the HR department interacts with employees. This may include but is not
limited to:
the creation of employee privacy policies
changing and more stringent rules on HR data
'least privilege' access rules to HR data - restrictions on access
to HR data
restrictions on employee references
restrictions on background checks
changing and more stringent records management practices
implementation of data retention and data destruction policies
employee access to their own data
If you have tried to get specific answers to these or similar questions such as
‘how much security is enough’ or ‘what is the best practice for protecting HR
data?’ from your auditors, then you probably have the same scar tissue on
your forehead as I do. On a case by case basis, the intent of each of the
regulations is grounded in a desire to make sure that we do the right thing.
What's the solution?
Embrace the opportunity. If you take these issues on one by one and
respond, you will be stuck in response mode until the receivers knock on
your door. The silver lining to this regulatory cloud is that by taking positive
control of your assets, data as well as financial, you end up in better control 20
of your business or your department. If you do it yourself, you can partner
with your compliance department and your IT group and explicitly define
your objectives and requirements. If you outsource, you can do the same
thing through the service level agreement that you have with your
outsourcer.
So what does all this mean to the HR professional? It means a lot of
responsibility around risk management. It means we need to be looking for
different skill-sets in HR to understand the new realities of privacy and
security of employee data. And it means developing closer relationships with
IT and Finance to understand the new rules.