Updated December 24, 2025
California Privacy Laws at Work: Essential Guide for Employees and Employers (2026)
California privacy laws have become increasingly complex and demanding for employers navigating workplace data management. Failure to comply with these stringent regulations can result in severe penalties, with fines reaching up to $7,500 per intentional violation.
Furthermore, the landscape continues to evolve as the California Privacy Rights Act (CPRA) expands upon the California Consumer Privacy Act (CCPA), creating additional obligations for employers. Many businesses remain unprepared for these comprehensive requirements, particularly regarding employee data protection and privacy rights.
Understanding your legal responsibilities is no longer optional—it's essential for operational continuity and maintaining trust with your workforce. This guide breaks down the key components of California's privacy framework, specifically addressing what employers need to know about compliance requirements, protected information categories, employee rights, and practical implementation steps.
Whether you're a small business or large corporation with California employees, this comprehensive resource will help you build a privacy-compliant workplace while avoiding costly violations and potential litigation.
Who Must Comply with California Privacy Laws
Determining which organizations must adhere to California privacy laws involves understanding several criteria that extend beyond simple geographic boundaries. Not every business that interacts with California residents falls under these regulations, but those that do face significant compliance requirements.
Which businesses are covered under CCPA and CPRA
The California Consumer Privacy Act (CCPA), as amended by the California Privacy Rights Act (CPRA), applies to for-profit entities that conduct business in California and meet at least one of these threshold requirements:
- Annual gross revenue exceeding $25 million in the preceding calendar year [1]
- Annually buying, selling, or sharing personal information of 100,000 or more California consumers or households [2]
- Deriving 50% or more of annual revenue from selling or sharing consumers' personal information [2]
Notably, the CPRA increased the consumer threshold from 50,000 to 100,000, providing some relief to smaller businesses [3].
The definition of "doing business in California" is intentionally broad. A company need not maintain physical offices within the state to fall under these regulations. Activities such as having remote workers located in California, marketing products to California residents, or recruiting job applicants from the state may qualify as doing business [3].
Moreover, these laws apply regardless of where a company is headquartered. Even businesses based outside California—or outside the United States entirely—must comply if they meet the criteria and handle Californians' data [4].
Types of workers included in the law
As of January 1, 2023, California privacy laws expanded to include worker data protection [2]. The protected individuals now include:
- Current employees
- Independent contractors
- Job applicants
- Former employees [2]
- Board members who are California residents [1]
- Remote employees residing in California, regardless of the employer's physical location [1]
This expansion eliminated previous exemptions for employee and business-to-business (B2B) data, meaning employers must now extend the same privacy protections to their workforce that they previously offered only to consumers [5].
Third-party service providers and subcontractors
California privacy laws create distinct classifications for entities that process personal information:
Service Providers: Organizations that process personal information on behalf of a business pursuant to a written contract [6]
Contractors: Entities to which a business makes available consumer personal information for a business purpose under a written contract [6]
Third Parties: Entities that are neither the original business nor qualifying service providers or contractors [6]
Each classification carries different responsibilities. When transferring personal information to these entities, businesses must implement specific contractual safeguards. These contracts must:
- Specify limited and defined purposes for data use
- Require compliance with CPRA obligations
- Grant the business rights to ensure proper data handling
- Establish notification procedures if compliance cannot be maintained
- Allow the business to stop and remediate unauthorized data use [6]
For contractors, additional requirements include certifying understanding of these restrictions and allowing the business to monitor compliance [7].
The distinction between these classifications matters significantly—transfers to service providers and contractors generally don't constitute "sales" of data that would trigger opt-out rights, whereas transfers to third parties might [7].
What Employee Data is Protected
Under California privacy laws, the scope of protected employee data is expansive and nuanced. Understanding what information falls under these regulations is essential for employers to establish proper compliance protocols and protect worker privacy rights.
Definition of personal and sensitive data
The California Privacy Rights Act (CPRA) defines personal information (PI) as information that "identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household" [8]. This broad definition encompasses virtually any data point that can be connected to an individual worker.
Additionally, the CPRA introduced a new category called "sensitive personal information" (SPI), which requires heightened protection and more stringent compliance measures [9]. This classification represents a subset of personal information subject to greater safeguards.
The distinction matters because employees now have the right to limit the use and disclosure of their sensitive personal information and opt out of the sale or sharing of their data [9].
Examples of protected employee information
Personal information protected under California privacy laws includes:
- Basic identifiers: name, address, email, phone number
- Government identifiers: Social Security number, driver's license, passport
- Employment records: resumes, performance evaluations, employment history
- Financial information: account numbers, benefits information
- Biometric data: fingerprints, voice recognition
- Location data: precise geolocation
- Electronic activities: browsing history, search history, network monitoring
- Audio/visual data: photographs, video surveillance, recordings
- Inferences drawn about characteristics and abilities [2]
Sensitive personal information encompasses additional categories including:
- Racial or ethnic origin
- Religious beliefs
- Union membership
- Sexual orientation
- Genetic and health data
- Biometric information processed for identification
- Precise geolocation
- Contents of communications (emails, texts) not intended for the employer
- Financial account information with access credentials [8][9][1]
Data collected during hiring vs. employment
The elimination of employee exemptions under California privacy laws means that both applicant and employee data now require comprehensive protection [10].
For job applicants, protected information typically includes:
- Application materials and resumes
- Background check results
- Interview notes and assessments
- Contact information
- Demographic information (when collected)
Once hired, the scope expands to encompass:
- Performance reviews and evaluations
- Compensation and benefits information
- Workplace monitoring data
- Health information (including medical leave documentation)
- Communications on company systems
Employers must provide privacy notices at or before the time personal information is collected—including when a California resident applies for a job [1]. This notice requirement means different disclosures may be needed during the application process compared to ongoing employment.
Indeed, California recently levied a $1.35 million fine against a national retailer partly for failing to provide compliant privacy notices to job applicants [10][11]. This enforcement action underscores that privacy compliance extends beyond consumer-facing operations to include both recruitment and human resources data.
For California employers, recognizing the extensive nature of protected employee data represents the first critical step toward meaningful compliance with these comprehensive privacy regulations.
Employee Rights Under CCPA and CPRA
Since January 2023, California's landmark privacy laws have granted workers unprecedented control over their personal data. These provisions represent the first comprehensive workplace data rights framework in the United States, fundamentally changing the employer-employee relationship regarding information privacy.
Right to know what data is collected
California employees now possess the essential right to transparency about their data. Employers must provide detailed privacy notices explaining:
- What categories of personal information they collect
- The specific business purposes for data collection
- Whether data is sold or shared with third parties
- How long data will be retained
- What rights workers have under the law [2]
Importantly, these notices must be provided at or before the point of data collection. Employers cannot collect data for purposes beyond those stated in the notice without providing additional notification to workers [3].
Right to access, correct, or delete data
Employees can request copies of their personal information, with employers required to respond within 45 days [12]. This right extends to all data collected during the previous 12 months, including information shared with or sold to third parties [3].
Workers also have the right to correct inaccurate personal information, with employers obligated to use commercially reasonable efforts to ensure data accuracy [13].
Additionally, employees can request deletion of their personal information, though several exceptions exist for data that employers are legally required to maintain or reasonably need for business operations [14]. When employers deny deletion requests, they must provide detailed explanations to the employee [3].
Right to opt out of data sale or sharing
The CPRA grants employees control over how their information flows to external entities. Workers can direct employers not to sell or share their personal data with third parties like data brokers [3].
Crucially, the definitions of "selling" and "sharing" are quite broad, encompassing any transfer of personal information for monetary or other valuable consideration, as well as data sharing for cross-context behavioral advertising purposes [14].
Right to limit use of sensitive data
Employees possess the right to limit how employers use their sensitive personal information (SPI). This category includes Social Security numbers, union membership, genetic data, racial/ethnic origin, health records, biometric information, and private communications [2].
Unless used solely for authorized business purposes, employers must provide a "Limit the Use of My Sensitive Personal Information" option [15]. Once an employee exercises this right, the employer must wait at least 12 months before requesting permission to use that information for additional purposes [15].
Protection from retaliation
Perhaps most critically, California law explicitly prohibits employers from retaliating against workers who exercise their privacy rights [2]. This anti-discrimination provision prevents adverse employment actions, different compensation, or denial of services in response to employees asserting their data rights [9].
These new protections are enforced by the California Privacy Protection Agency (CPPA), which began enforcement on July 1, 2023 [3].
Consequently, employers must now navigate a complex balance between their legitimate business needs and their workforce's newfound privacy rights. Rather than treating employee data as a corporate asset to be leveraged however desired, businesses must henceforth approach worker information with the same care and consideration previously reserved only for consumer data.
Employer Responsibilities for Compliance
Compliance with California privacy laws demands specific employer actions to protect worker data rights. Complying with these requirements involves several procedural obligations that went into effect on January 1, 2023, when the CPRA expanded protections to employee data.
Providing privacy notices to employees
Employers must furnish comprehensive privacy notices to their workforce that detail:
- Categories of personal information collected
- Business purposes for data collection
- Whether information is sold or shared with third parties
- Retention periods or criteria for determining retention time
- Employee rights under California privacy laws
These notices must be provided at or before the point of data collection. For job applicants, this means making privacy notices available during the application process. For current employees, notices can appear in employee handbooks or company intranets. Essentially, the notices serve as the foundation of a company's privacy compliance program.
Setting up data request systems
Organizations must establish at least two designated methods for employees to submit data requests [16]. One method must be a toll-free phone number, plus additional options like email forms, printed forms, or web portals [2]. These systems should be accessible and user-friendly, allowing workers to exercise their rights to access, correct, or delete their personal information. Currently, many employers create separate portals specifically for employee data requests to distinguish them from consumer requests.
Verifying employee identity for requests
Following receipt of a data request, employers must implement "commercially reasonable methods" to authenticate the requester's identity [17]. Identity verification processes must be appropriate to the sensitivity of the information requested. Accordingly, employers cannot verify identity by requesting additional sensitive information, such as Social Security numbers. For employees with password-protected accounts, businesses may use existing authentication procedures [2].
Responding to requests within legal timeframes
Employers face strict timelines for processing data requests:
- 10 business days to acknowledge receipt and explain verification procedures [18]
- 45 calendar days to provide a substantive response [18]
- Option to extend response time once by an additional 45 days (90 days total) with written notice explaining the reason for extension [18]
Ultimately, businesses should prepare for these obligations by training HR teams, documenting compliance procedures, and conducting regular audits to ensure systems function effectively. Failure to establish these processes not only risks regulatory penalties but also undermines the new relationship of trust and transparency that California privacy laws aim to foster between employers and their workforce.
Steps to Build a Privacy-Compliant Workplace
Building a solid foundation for privacy compliance requires systematic steps and ongoing vigilance. With California privacy laws continuously evolving, organizations must establish comprehensive protocols to safeguard employee data.
Conducting a data inventory
The cornerstone of compliance is thorough data mapping. Begin by documenting all personal information your business collects, processes, shares, and stores [19]. Create a comprehensive inventory that includes both employee and B2B data—an element previously exempted from compliance requirements [6]. Identify business processes involving high-risk processing or sensitive information, especially those used for profiling or automated decision-making [6]. A well-executed inventory helps pinpoint potential vulnerabilities and streamlines fulfillment of access requests.
Implementing internal privacy policies
Develop written procedures that accurately reflect your current data practices. These should detail how employee information is collected, used, retained, and secured. Establish clear retention schedules and implement "reasonable security procedures" as required by law [7]. Equally important, create documented workflows for responding to employee data requests within the mandated 45-day timeframe. Good "data hygiene" reduces compliance burdens and minimizes risk [20].
Training HR and IT teams
California regulations expressly require training employees responsible for privacy compliance [21]. This instruction must cover employee rights under the law, procedures for exercising those rights, and proper response protocols [21]. Teams should understand verification requirements and security measures to protect sensitive data. Schedule refresher training annually and after any data breach incident [22].
Auditing third-party vendors
Examine contracts with service providers who handle employee information. Beginning in 2023, businesses must conduct annual reviews of third parties with whom they share data. Perform quarterly scans of tracking technologies and maintain an inventory of them. Execute formal Data Processing Agreements that clearly define vendors' privacy obligations.
Preparing for data breach response
Develop a structured response plan addressing the 30-day notification requirement taking effect in 2026 [24]. Document steps for breach containment, investigation, and notification procedures. Include required notification elements like timing information, exposed data types, and mitigation services offered to affected individuals [7].
Conclusion
California privacy laws represent a significant shift in how employers must handle workforce data. The elimination of employee exemptions under CPRA has fundamentally altered the employer-employee relationship regarding personal information. Consequently, businesses face stricter requirements to protect, disclose, and properly manage employee data than ever before.
Understanding your obligations begins with determining whether your organization falls within the scope of these regulations. Companies meeting the revenue threshold of $25 million, handling data from 100,000+ California consumers, or deriving substantial revenue from selling personal information must comply regardless of their physical location.
Employee rights now mirror consumer protections, thus granting workers unprecedented control over their personal information. These rights include knowing what data employers collect, accessing and correcting that information, opting out of data sales, and limiting use of sensitive information. Additionally, the law explicitly prohibits retaliation against those who exercise these privacy rights.
Compliance demands proactive measures rather than reactive approaches. Data inventories, robust internal policies, regular staff training, and third-party vendor audits form the backbone of an effective privacy program. The 45-day response window for data requests necessitates efficient systems and processes before requests arrive.
The stakes remain high for non-compliance. Potential penalties reaching $7,500 per intentional violation underscore the importance of addressing these requirements seriously. Though implementing these changes might seem daunting initially, a systematic approach can make compliance manageable while building trust with your California workforce.
Privacy compliance should no longer function as merely a checkbox exercise but rather a fundamental business practice. Companies that embrace these requirements often discover unexpected benefits beyond legal compliance, including improved data management, enhanced employee trust, and strengthened organizational reputation. California's privacy framework likely represents not the end but merely the beginning of nationwide workplace privacy reform.
