Localized Data Privacy Laws Impact Multinational HRIT Systems Worldwide

Today’s business landscape is marked by an increasing number of companies expanding their operations worldwide, transforming both the world of work and international commerce. HR and IT leaders now face the daunting task of navigating an intricate web of local laws and regulations across all the countries in which they operate.

In particular, data privacy regulations are of key concern for multinational companies. With the growing prominence of digitization in the workplace, handling employee data has become vital for business operations. However, in parallel, data privacy laws have now become stricter than ever before.

Organizations must ensure they remain compliant with the data privacy laws of each country in which their employees reside while also collecting the employee data that they require. Data localization, in particular, can quickly become a challenging area for IT and HR leaders. This requires that personal data collected within a country be stored and processed within its borders. These laws aim to protect citizens’ personal data and foster data sovereignty, but businesses looking to remain competitive must balance their employee data needs with these data localization laws.

This article explores the nuances of data localization laws, their ramifications for multinational companies, and how HR and IT leaders can partner with Epicenter to ensure compliance across jurisdictions.

Relevant Data Localization Laws for Your Multinational Company

Personal data is integral to the functions of modern HR and IT systems and typically includes:

• Identifying information (e.g., name, address, phone number, email)
• Date of birth
• Photos
• Sensitive information (e.g., racial and ethnic origin, religious beliefs, political views, criminal records, sexual orientation)

Balancing the use of personal data with data privacy regulations is crucial for protecting employee privacy rights and maintaining compliance across countries. Countries where particularly strict data localization laws apply include:

1. Russia: In 2015, the Russian Federation finalized a law mandating that organizations retain the personal information of Russian citizens within the nation’s borders. This law encompasses all businesses handling Russian citizens’ personal data, irrespective of the company’s physical location or country of origin.
2. China: China has introduced a series of data localization statutes, notably the Cybersecurity Law, which prescribes the storage of personal data pertaining to Chinese citizens exclusively within Chinese territory. This requirement extends to all organizations operating in China.
3. India: India implemented a law in 2018 stipulating that organizations must store the personal data of Indian citizens exclusively within the country. This regulation applies to all entities processing personal information, including HR-related data, of Indian nationals.
4. Vietnam: Vietnam implemented a law in 2018 that requires companies to store the personal information of Vietnamese citizens within the nation’s borders.

A multinational company with employees located in these specific countries would need to ensure that employee personal data is stored and processed within each country’s borders. This can be a complex and costly process, requiring significant investment in local data centers and IT infrastructure.

For instance, Oracle is a leading global system of record that captures data on a company’s worldwide workforce. This means it requires data storage. However, multinational companies cannot use Oracle as a primary system for their employees’ personal data if they employ workers in a country with strict data localization laws.

In Russia, for example, the dominant ERP solution is called 1C. This houses data in Russia and so would be used as the primary system for a multinational company’s Russia operations, even if the company’s global primary system is Oracle. In Russia, Oracle would, therefore, need to be the secondary system to the data stored with 1C. For other kinds of data that the multinational company collects, however, Oracle may be the primary system in Russia – as long as the data isn’t personal. Organizing this across multiple countries can be an operational and financial challenge.

In addition to the logistical challenges, complying with data localization laws can also have significant financial and legal implications. Failing to comply with data localization laws can result in fines, penalties, and reputational damage. For example, in 2019, Google was fined $57 million by French regulators for violating the EU’s General Data Protection Regulation (GDPR).

How Epicenter Helps With Data Localization

To address the challenges posed by data localization laws, multinational companies must adopt a proactive approach to compliance. This involves investing in local IT infrastructure, collaborating with local legal experts to understand local data privacy laws, and implementing data security best practices to protect employee personal data. Furthermore, they must ensure that their data management practices align with local data protection laws and regulations.

This is where Epicenter comes in. As a team of experienced Oracle implementation specialists, we focus on integrating Oracle systems with various local solutions to tackle data localization challenges. Our expertise in Oracle integration guarantees seamless data storage and processing, while HR and IT leaders can feel confident that they remain in compliance with diverse data localization laws across jurisdictions.

At Epicenter, we understand the critical role of data security and data localization law compliance. Our experts work with your organization to implement industry-leading data security best practices within your Oracle-based HRIT systems and local data storage solutions. We provide guidance and expertise as well as ongoing support and monitoring to ensure your organization’s Oracle-based HRIT systems remain compliant with data localization laws as they evolve. Our experts continuously monitor regulatory changes and quickly inform your organization of any updates that may impact your data management practices, helping you to adapt and maintain compliance.

By partnering with Epicenter, multinational organizations can confidently navigate the challenges of data localization laws and maintain compliance across countries through our expert Oracle integration. If your organization is seeking support in achieving compliance with data localization laws through Oracle integration, contact Epicenter today.