How to Comply with Data Sovereignty in Remote Work
Read how to ensure your remote team complies with data sovereignty laws and handles data securely across borders.
As remote work becomes more common across the globe, businesses have the opportunity to hire talent from various countries. However, managing remote teams in countries with strict data sovereignty laws can be difficult.
These laws ensure that data generated within a country is handled according to that country’s regulations. For companies, this means that employee and client data must stay within local laws, making compliance a priority when managing remote teams.
In this article, we’ll explore how to overcome these challenges and manage remote work effectively in countries with strict data sovereignty laws.
What Are Data Sovereignty Laws?
Data sovereignty laws dictate that data collected within a country must stay within that country’s borders and comply with its laws.
These laws are often put in place to protect national security, safeguard citizens’ privacy, and make sure that data is not misused by foreign governments or companies.
Depending on the country, these laws can vary widely, which means businesses must take the time to understand the specific regulations in each country where they have remote workers.
For example:
Failing to comply with these laws can result in hefty fines, legal disputes, and reputational damage.
For instance, under GDPR, non-compliant companies can face fines of up to €20 million or 4% of global annual turnover, whichever is higher.
Challenges of Remote Work in Countries with Strict Data Laws
1. Data Storage and Location
One of the biggest challenges companies face is ensuring that data is stored in the right place. When you have remote workers in countries with strict data laws, you need to make sure that their data stays within the borders of that country. If data is transferred out of the country, it might not meet local legal requirements.
For example in China, the Personal Information Protection Law (PIPL) requires that personal data collected within the country be stored locally. Companies operating in China must ensure that data remains within national borders unless they receive government approval for cross-border transfers. These strict regulations impact multinational businesses, requiring them to establish local data centers or partner with domestic cloud providers to comply with the law.
2. Employee Privacy and Monitoring
With remote work, companies often need to monitor employee performance. This can involve collecting personal data, such as email records or even location data. However, doing this in countries with strict privacy laws can be tricky. You need to make sure that any monitoring you do is in line with local privacy regulations, which can sometimes limit how much data you can collect.
For instance, in Canada, the Personal Information Protection and Electronic Documents Act (PIPEDA) requires employers to justify any collection of employee data and ensure it’s used only for legitimate purposes.
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3. Cross-Border Data Transfers
Companies with remote teams in different countries might need to transfer data between locations. But if you’re dealing with countries that have strict data laws, this can be problematic. Some countries require that data stays within their borders, making it difficult for businesses that need to move data around.
For example in South Korea, the Personal Information Protection Act (PIPA) requires businesses to obtain explicit consent from individuals before transferring their data overseas.
4. Cybersecurity Risks
Remote work often involves using personal devices, cloud services, and third-party tools, which can increase security risks. When data is stored in different countries, ensuring it is properly secured in line with local laws becomes even more important. If data is compromised or stolen, it can lead to legal issues and reputational damage.
For example in Japan, the Act on the Protection of Personal Information (APPI) requires businesses to take preventive measures against data breaches, including encryption and access controls.
How to Manage Remote Work Effectively
1. Create Clear Data Management Guidelines
The first step in managing remote work in countries with strict data laws is to create clear policies about how data will be handled. These policies should outline where data can be stored, how it will be processed, and the steps for transferring data securely. This ensures that your business remains compliant with local laws and avoids any potential issues.
2. Work with Local Legal Experts
Because data sovereignty laws can be complex and vary by country, it’s a good idea to work with local legal experts. These experts can help you understand the specific requirements in each country where you have remote workers. They can also guide you on data transfer mechanisms and other compliance issues to ensure your business stays within the law.
3. Use Local Data Centres
To comply with data sovereignty laws, consider using data centres that are located within the same country as your remote employees. This ensures that data is stored within the country’s borders and complies with local regulations. Many cloud providers offer data centres in multiple locations, so you can choose one that fits the legal requirements of each country.
4. Strengthen Cybersecurity Measures
Keeping data secure is important, especially when managing remote work in different countries. Ensure that remote employees use secure devices, VPNs, and encrypted communication tools to protect sensitive information. It’s also important to implement multi-factor authentication and conduct regular security training to help employees stay aware of best practices.
5. Regularly Monitor Compliance
Data sovereignty laws are constantly evolving, so it’s important to stay on top of changes. Regular audits of your data handling practices can help you ensure that your business remains compliant with local regulations. By keeping up with changes in the law, you can avoid any surprises and maintain smooth operations.
6. Adopt Privacy by Design
Privacy by design is an approach that builds privacy into systems and processes from the start. By considering privacy at every stage of data handling, you can ensure that your remote work systems comply with data sovereignty laws. This approach can help you build trust with your remote workers and clients, knowing that you’re handling their data responsibly.
7. Involve Remote Employees in Data Protection
Finally, it’s important to engage your remote employees in data protection efforts. Make sure they understand the local data laws and their responsibilities when handling data. Providing regular training on data protection and cybersecurity can help keep everyone on the same page and ensure that your business stays compliant.
How Beyond Borders HR Can Help You
At Beyond Borders HR, we specialise in supporting businesses with global HR challenges, including compliance with data sovereignty laws. Our team can guide you through the complexities of managing remote work across borders and help you ensure that your data handling practices meet the legal requirements in each country.
If you need assistance with these regulations, feel free to get in touch with us today!