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Data Brokers Beware: California Passes a First-of-its-kind Law.

08 Nov


Update Applicable to:

All data brokers and for employers who utilize data brokers.

What happened?

The California Delete Act (SB 362) passed the California legislature on September 15, 2023, and was signed by Governor Newsom on October 10, 2023. The act gives consumers the right to restrict how data brokers collect and use their personal information.

What do employers need to do?

Data brokers and employers should review the above bill for further information. The law will require data brokers to begin to register with the CPPA in January 2024, and comply with the single-request deletion system beginning August 2026.

What are the details?

As per the existing law, data brokers are obligated to register and pay an annual fee to the California Attorney General’s Office. However, this law will shift the regulatory authority over data brokers to the California Privacy Protection Agency (CPPA). This change will necessitate data brokers to register with the CPPA, with the exact fee to be determined, by January 31st every year, provided they meet the aforementioned criteria defining a “data broker.” The Delete Act grants authority to the CPPA (California Privacy Protection Agency) to establish a system by the year 2026. This system would enable residents to submit a single data deletion request, applicable to the nearly 500 registered data brokers conducting operations within the state. Additionally, the CPPA would have the responsibility of enforcing various provisions outlined in the Delete Act.

Starting from August 1, 2026, data brokers are required to utilize the deletion mechanism at least once every 45 days. Furthermore, upon receiving a request from a consumer or their authorized representative, data brokers must ensure the deletion of the consumer’s personal information within 45 days, while considering CCPA deletion exemptions.

In cases where a data broker cannot verify the request through the CCPA’s mechanism and, therefore, denies it, they must treat the request as an opt-out of the sale or sharing of the consumer’s personal information under the CCPA. Additionally, data brokers must instruct all associated service providers and contractors to follow similar procedures, either deleting the requesting consumer’s personal information or processing the request as an opt-out. It is important to note that the CCPA may impose a fee on data brokers for accessing the deletion mechanism.

Commencing on January 1, 2028, and subsequently every three years, data brokers are required to undergo an independent third-party audit to verify their adherence to the Act. These data brokers must retain records of these compliance audits for a minimum of six years and, if requested, furnish the audit findings to the CPPA within five business days.

Starting from January 1, 2029, data brokers are obligated to disclose their audit results as part of their registration with the CPPA.

For more information, please see the links below:

Senate Bill 362 (Delete Act)

Data Broker Registry

Current Law (Title 1.81.48. Data Broker Registration)

Law Firm Articles: Article 1, Article 2, Article 3, Article 4, Article 5, Article 6

Fisher Phillips – 5 Biggest Questions

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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