While there are a number of rewards that come with owning your own business, pursuing your entrepreneurial ambitions requires a high level of diligence. As privacy is becoming more and more of a flashpoint issue in the United States, small business owners need knowledge of how state and federal laws dictate the handling of sensitive consumer and employee data. Here’s a rundown of different ways privacy regulations can impact your business.
The cost of data security
If your company retains or transmits any sensitive consumer data, your company needs to have a data handling policy in place. The reason being, the Federal Trade Commission and the Federal Communications Commission will hold your business responsible in the event of a data breach that leaves sensitive customer information exposed. In fact, Wired reported that one leading telecommunications provider had to pay out $25 million as the result of an SEC investigation following a data breach earlier this year. Entrepreneurs who don’t want to be saddled with eight figure fines and penalties should abide by the FTC’s data security guidelines.
The ins and outs of background checks
In the process of making your hiring decisions, do you run background checks on your applicants? If you do, you should be aware of the fact that the FTC and the Equal Employment Opportunity Commission require that you receive written permission from all your job candidates before running a credit or criminal background check. As an employer, you should also know that you are prohibited from seeking any information about your potential hire’s age or their racial, sexual, religious, genetic or national backgrounds. Using any of the above listed information in a hiring decision constitutes a violation of the applicant’s privacy and U.S. law, so proceed with caution.
This article was written by Mario McKellop of Examiner.com for CBS Small Business Pulse.