14.01.2024 line employer of record

What is a DPA (data processing agreement)?

What is a DPA?

DPA meaning data processing agreements. If your company gathers personal information from users and depends on a third party for data processing, it is essential to establish a data processing agreement (DPA) to prevent penalties resulting from non-compliance with various privacy regulations worldwide.

In simple terms, (DPA) a data processing agreement is a contractual arrangement between a data collector and the third-party services they engage to handle data.

In the following sections, we will delve into the definition and structure of a data processing agreement, as well as highlight the reasons your business may require one, particularly in light of recent updates and the introduction of new data privacy legislation.

What is a DPA (data processing agreement)?

A data processing agreement, alternatively referred to as a data processing addendum or DPA, is a legal contract that outlines the rights and responsibilities of the parties engaged in data processing.

Typically, these parties consist of your business and any third-party services you employ.

In this arrangement, your business serves as the data collector, while any external company assisting in the collection or processing of data functions as the data processor.

The primary purpose of a data processing agreement is to provide assurance to users that your business is taking responsibility for the data collection process. This is achieved by ensuring that the third-party processors with whom you collaborate adhere to the appropriate laws when handling, processing, and storing user information.

What needs to be in a data processing agreement

GDPR Article 28, Section 3, provides a comprehensive outline of the eight essential components to be addressed in a Data Processing Agreement (DPA). In brief, these are the key elements that should be incorporated:

  • Instruction Compliance

The processor commits to processing personal data solely based on the written instructions provided by the controller.

  • Confidentiality Commitment

All individuals with access to the data are obligated to uphold confidentiality.

  • Security Measures

 Implementation of appropriate technical and organizational measures to ensure the security of the processed data.

  • Subcontracting Protocol

The processor is prohibited from subcontracting to another processor unless explicitly instructed in writing by the controller. In such cases, a separate DPA must be established with the subcontractor, as per Sections 2 and 4 of Article 28.

  • Support for Controller’s GDPR Obligations

The processor agrees to assist the controller in fulfilling their obligations under the GDPR, particularly regarding the rights of data subjects.

  • Assistance in GDPR Compliance

The processor will aid the controller in maintaining GDPR compliance, specifically in accordance with Article 32 (security of processing) and Article 36 (consulting with the data protection authority before engaging in high-risk processing).

  • Data Handling After Service Termination

The processor undertakes to either delete all personal data upon the conclusion of services or return the data to the controller.

  • Audit Provision

The processor must permit the controller to conduct audits and provide all necessary information to demonstrate compliance.

Do I need a Data Processing Agreement?

(DPA) A data processing agreement is crucial to sidestep potential penalties resulting from non-compliance with various data privacy laws, as outlined earlier.

For instance, the General Data Protection Regulation (GDPR) is applicable to any website or app that gathers personal information and caters to visitors from the European Union (EU). Article 83 of the GDPR specifies that businesses failing to adhere to its provisions may face fines of up to $20 million or 4% of their global revenue—whichever is greater.

To mitigate these risks, it is imperative to adhere to GDPR compliance guidelines, and this often includes the establishment of a data processing agreement.

Similarly, amendments to the California Consumer Privacy Act (CCPA) mandate a contractual arrangement when a business discloses personal user data to contractors, service providers, and third parties.

In the upcoming sections, we will define these terms and elucidate their connection to Data Processing Agreements (DPAs).

What happens if you don’t sign a DPA?

If you neglect to enter into an agreement with your data processor, and they mishandle the data, you could be held responsible for a data breach. This is because you failed to implement sufficient measures to guarantee data protection.

Beyond the financial repercussions, your company may endure damage to its reputation, and there is a risk of losing the trust of your customers. Consequently, customers may become hesitant to share their personal information with your company in the future.

Are there fines if you’re not compliant with the GDPR?

Fines for non-compliance with the General Data Protection Regulation (GDPR) are notably severe, potentially reaching up to €20 million euros or 4% of the global revenue of businesses.

Moreover, in cases where a business is determined to have violated the GDPR, data subjects have the right to seek compensation for damages incurred.

Bizky Employer of Records

If you employ workers through Bizky, you can be confident in the compliance of data processing methods with DPA regulations. Thanks to Bizky, you can hire employees globally without worrying about specific country regulations.

Hire employees from Poland with Bizky.

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