Everything about Personal Data Protection Bill 2023 (Ultimate Guide)

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Personal Data Protection Bill 2023
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The term data protection refers to the protection of user data safely and securely. It is a protocol that defines the numerous policies on how to restrict the user’s personal data usage and save it from data breaches.


The Personal Data Protection Bill of 2022 defines the compliance regulations for companies taking responsibility for using users’ personal data.


Personal data protection is built based on technologies like Data Loss Prevention (DLP) which ensures end-to-end encryption, built-in data protection, firewalls, and more. It is essential in business operations such as research and development, finance business, etc.


The Union Cabinet cleared the Digital Personal Data Protection Bill (DPDP) in July 2023, to ensure the security and privacy of Indian citizens. As per the Bill, organizations will have to pay a maximum of ₹250 Crores to the Government authorities for violating norms present in the Bill.


In this blog, we are sharing the details of the Personal Data Protection (PDP) Bill and how HRMS data management will change based on the personal data management policies defined in the Bill.


What is Personal Data Protection (PDP)?

Personal Data Protection (PDP) refers to a set of tools and policies for practicing, regulating, and measuring the privacy and security of an individual’s personal information. It includes the collection, use, storage, and sharing of personal data by organizations and governments while ensuring that individuals have control over their personal data.


The main function of PDP is safeguarding individuals’ privacy and taking steps against misuse or unauthorized access to their personal information.


Personal data can include various types of information, such as names, addresses, phone numbers, email addresses, financial details, medical records, and other identifiers that can be used to identify an individual.


➔ PDP Rules and Policies

The Personal Data Protection Bill was first introduced in 2019 by the Parliament in December. The main objective of the public draft was to analyze the user’s personnel data and protect it securely from theft.


The Personal Rule and Policy actions are bifurcated into 16 chapters thoroughly, for a comprehensive outlook.


➔ The Personal Data Protection (PDP) Bill, 2023

The parliament cleared the 16-chapter PDP Bill in July 2023. While the previous draft remains the same, the Bill outlines the practices of collecting personal data, storing them securely without any breaches, choosing the parties with whom data is being shared, and more.


If any violation is taken place, the penalty will be borne by the individuals or companies using the personal data. These organizations will have to pay a maximum of ₹250 crores with the upward revision of ₹500 crores to larger entities. In the case of individuals, they must pay a minimum ₹10,000 as a penalty in case of breaches.


Key points of the Personal Data Protection Bill

Let us discuss the key parameters of the PDP Bill:


➔ Applicability

The PDP Bill is applied to Government and private entities involved in the processing and securing the personal data in India. The Bill has provisions for protecting the personal data of Indian citizens processed outside of India as well.


➔ Data Protection Authority

The PDP Bill ensures the protection of user data under the Data Protection Authority of India (DPA). The DPA will be an independent regulatory body responsible for the enforcement and implementation of the provisions of the bill.


➔ Rights of Individuals

With the Bill, individual users will gain the authority to access their personal data, correct inaccuracies, perform data portability, and more.


➔ Sensitive Personal Data

The PDP Bill classified the user’s personal data into various categories, such as financial data, health data, biometric data, etc. Any data protection violation reflects a minimum ₹500 Crore penalty for organizations and ₹10000 for individuals.


➔ Data Localization

The PDP Bill also has provisions related to data localization, which requires personal data to be stored and processed only within India. Under the Bill, the organization should encrypt personal data within a region.


➔ Cross-Border Data Transfer

The Bill also allows for cross-border transfer of personal employee data. In this scenario, the employees and employers must fulfill numerous conditions, including the requirement for a copy of personal data to be stored in India.


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How PDP will change HRMS Data Management?

By deploying HRMS software, organizations can store their employees’ personal data safely and securely. A robust HRMS software encrypts sensitive and confidential employee information so that any random entity cannot access them.


Usually, organizations hire cybersecurity experts and consultants who can provide further insights and guidance on strengthening data security in their companies.


However, with an HRMS at your disposal, the provisions of the Personal Data Protection Bill will be automatically followed since it will be updated by the software vendor for maintaining compliance. It will also automate the entire data security process.


Let us discuss how deploying a robust HRMS will help automate personal data management as required by the PDP Bill:


➔ Access Controls

HRMS software provides robust access controls for the private and public sectors by implementing user authentication mechanisms such as strong passwords, multi-factor authentication, role-based access controls (RBAC), etc.


As defined by the provisions of the PDP Bill, an employee can process their personal data and analyze whether there are errors in the data or missing information.


➔ Data Encryption

HRMS software plays a crucial role in employing encryption. HRMS software also ensures the personal data protection protocol (DPD) by securely transmitting data over networks and encrypting sensitive data stored in databases to prevent unauthorized access.


➔ Data Backup and Recovery

Regular data backups are essential to ensure data availability and provide protection against data loss or system failures. HRMS software has mechanisms for performing automated and secure backups of employee data and establishing procedures for timely data recovery in emergencies.


Hence, it helps comply with the data backup provisions of the PDP Bill automatically.


➔ Audit Trails and Logs

Maintaining comprehensive audit trails and logs helps monitor and track user activities within the HRMS software. Additionally, HRMS detects any unauthorized access or suspicious behaviour and provides an accountability mechanism for data handling.


With the PDP policy requiring organizations to maintain audit trails and logs, personal data transactions can be accounted for with the help of HRMS.


➔ Compliance with Data Protection Laws

HRMS software will help in staying compliant with the Personal Data Protection Bill to ensure data protection and security of the employee data. Since HRMS deals with the employee management process, the data related to onboarding, offboarding, attendance, payroll, etc. should be stored securely.


The HRMS will ensure that the data is stored as well as accessed securely since it will be compliant with the provisions of the PDP Bill.


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How does Pocket HRMS ensure compliance with PDP?

It is evident that the HRMS software is directly responsible for ensuring compliance with the Personal Data Protection Bill in handling employee data.


HRMS software developers like Pocket HRMS have already implemented employee data protection policies in their systems and are striving towards providing enhanced data protection to secure employees’ personal data and company databases.


Pocket HRMS employs Microsoft Azure cloud infrastructure, which provides advanced military-grade 256-bit encryption for saving company and employee data securely. This system prevents the database from unauthorized access and data breaches.


By complying with the PDP Bill rules and regulations, Pocket HRMS can store Sensitive Personal Identifying Information (SPII) data securely with a multi-layered encryption system.


➔ Features of Pocket HRMS Data Protection:

• A centralized data maintenance service that encrypts, decrypts, and maintains employee personal data.
• Enterprise-grade 256-bit encryption with Microsoft Azure cloud infrastructure.
• User access control to ensure effective data abstraction.
• Well-scrutinized database for convenient application maintenance and compliant MIS reporting.
• Bulk data processing for simplified data imports and report generation.


Payroll Software


End Note

Personal data protection is an essential aspect of safeguarding every individual’s privacy. Hence, every organization should have the right HRMS software which is compliant with personal data protection policies and practices.


Data protection laws and regulations, like the Personal Data Protection Authority Bill of 2022, are established to enforce and regulate personal data protection at the country level. These laws set out obligations for individuals, organizations, and governments regarding collecting, using, storing, and sharing of personal data.


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