Skip to content

Understanding GDPR Penalties in the UK: A Guide for Employers

Table of Contents

In Short

  • The UK GDPR and DPA 2018 apply to employers, regulating how personal data is handled.
  • Non-compliance can result in fines up to £17.5 million or 4% of global turnover.
  • Steps like data audits, staff training, and robust policies help mitigate legal risks.

Tips for Employers

Implement clear data protection policies, train employees on compliance, and prepare for data breaches with a response plan. Conduct audits to identify and secure personal data. Seek legal advice to tailor GDPR compliance efforts to your business and reduce risks of fines or reputational damage.

As an employer, your business likely handles a large amount of employee personal data, making compliance with UK data protection laws (especially the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 (DPA 2018) a vital and mandatory requirement. Non-compliance consequences are severe, including the potential for heavy fines, legal action, and reputational damage. This article explores some of the key penalties and enforcement actions your business should understand under the UK GDPR and the steps you can take to minimise risk as an employer. 

Why is Compliance Important for Employers?

The UK GDPR and DPA 2018 aim to ensure businesses handle personal data responsibly. As an employer, you likely use various employee information during your business operations—from contact details and payroll data to sensitive special category health records or ethnicity data. 

Data protection laws require you to collect, store and use this data securely, and they hold your business accountable for any failures to respect employee privacy rights. Employers will generally act as data controllers, meaning they have many compliance obligations. 

What Rights Do Employees Have?

The UK GDPR and DPA 2018 grant employees significant rights. For example, employees can make Data Subject Access Requests, and your business must typically respond within one month, providing the requested information and explaining how you process their data. 

Employees who believe you mishandled their data can lodge complaints with the Information Commissioner’s Office (ICO) or seek compensation for financial loss or emotional distress. Failing to respect these rights can lead to severe legal and economic consequences, which can significantly drain your resources and create stress.

Continue reading this article below the form
Need legal advice?
Call 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.

What Powers Does the ICO Have?

The ICO enforces data protection laws and holds extensive powers to ensure businesses comply. It can take various steps to enforce compliance (including issuing assessment notices, warnings, reprimands, enforcement notices, and penalty notices).  

The ICO may issue information notices requiring your business to provide specific details about your data processing activities. If necessary, the ICO may serve assessment notices that allow them to inspect your premises, review documents, or observe your data processing activities.

If the ICO finds that your business has breached data protection laws, it can issue enforcement notices that require you to take corrective action or stop certain data processing. For breaches of fundamental data protection principles or data subjects’ rights, the ICO can issue fines of up to £17.5 million or 4% of your global annual turnover, whichever is higher. 

Could Your Business Face Criminal Liability?

Data protection laws can also expose your business to criminal liability, highlighting their seriousness. For instance, knowingly or recklessly providing false information in response to an ICO notice or unlawfully accessing or retaining personal data is a criminal offence. If it is found that senior managers were complicit in these offences, they can be held personally liable. 

Can Your Business Take Steps to Avoid Penalties?

Data protection compliance is not a one-size-fits-all approach. 

Each respective employer must take a nuanced view based on the type of employee data they handle, the purposes for which they use it, and any additional data they may process, such as customer information, to determine their obligations.

Different types of data processing by an employer can lead to various compliance obligations under the UK GDPR and related laws. If you are still determining your specific requirements, seeking tailored legal advice from a data protection solicitor is a sensible step.

However, employer businesses will typically take these common steps as part of their UK GDPR compliance efforts: 

Conduct a Data Audit

You can work with your HR, IT, and legal teams to prepare an inventory of your business processes’ personal data. You should carefully note the source, purpose, and retention period of this data and determine your compliance requirements accordingly.

Use Data Lawfully and In Accordance With UK GDPR Principles

You should ensure every data processing activity your business carries out has a valid basis under the UK GDPR.

Implement a Data Protection Policy and Staff Privacy Notice

You should inform your employees about their rights and how you will use their personal data. You should also issue a thorough data protection policy. This ensures staff know the rules they must follow when processing personal data.

Know How To Address Data Subjects Rights 

Your staff and other data subjects have several rights under data protection law. You should implement robust procedures to respond to such requests promptly to avoid complaints and data protection law breaches. 

Work to Avoid Yet Prepare for Any Data Breaches

You should implement security measures to help avoid data breaches and develop a robust breach response plan. If a breach occurs, your business must report it to the ICO within 72 hours if it meets the reporting threshold. Your company should also train your staff to handle data incidents efficiently.

Provide Regular Training

Train your employees on data protection principles to avoid common mistakes. This will help prevent human errors, which could lead to breaches of data protection laws. 

By following such steps, your business will be better positioned to demonstrate compliance with the UK GDPR and avoid enforcement actions. However, you should seek advice from a data protection lawyer to understand the full extent of your legal obligations and how best to protect your business from risk. 

Front page of publication
GDPR Essentials Factsheet

This factsheet sets out how your business can become GDPR compliant.

Download Now

Key Takeaways

Employers process large volumes of personal data. They are, therefore, particularly vulnerable to non-compliance, given the vast number of rules to follow. The ICO holds extensive powers to enforce data protection laws. This ranges from issuing assessment notices, warnings, and penalties to imposing significant fines. Your business must understand that non-compliance can result in severe financial penalties or criminal charges. Fines can reach up to £17.5 million or 4% of your global turnover. This shows the importance of robust data protection practices.

In addition, data protection breaches can damage trust and your business’s reputation, leading to employee grievances. Taking proactive measures (such as conducting data audits, implementing strong policies, and training staff) can help safeguard your business from breaching the UK GDPR and facing enforcement action. However, given the complexity of the UK GDPR, seeking legal guidance from a data protection lawyer to understand your specific obligations is highly advisable.

If your employer business needs advice on how to comply with the UK GDPR, our experienced data, privacy, and IT lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions

Why does the UK GDPR apply to employers?

The UK GDPR applies to any organisation that processes personal data, including employee information. Employers typically collect vast amounts of data from staff.

Why is compliance vital for your business?

Compliance helps your business protect employee privacy rights and protects it from the risk of fines, legal action, and reputational damage. The ICO’s extensive enforcement powers highlight the importance of taking data protection seriously.

Register for our free webinars

Deal Structures 101: Understanding Equity, ASAs and Convertible Notes

Online
As a startup founder, understand your capital raising options. Register for our free webinar today.
Register Now

Common Legal Pitfalls for SaaS and Online Businesses

Online
Protect your online or SaaS business from common legal pitfalls. Register for our free webinar.
Register Now

GDPR Compliance Essentials for SMEs

Online
Ensure our business is compliant with GDPR and build trust with customers. Register for our free webinar.
Register Now
See more webinars >
Sej Lamba

Sej Lamba

Read all articles by Sej

About LegalVision

LegalVision is an innovative commercial law firm that provides businesses with affordable, unlimited and ongoing legal assistance through our membership. We operate in Australia, the United Kingdom and New Zealand.

Learn more

We’re an award-winning law firm

  • Award

    2024 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2024 Law Firm of the Year Finalist - Modern Law Private Client Awards

  • Award

    2023 Economic Innovator of the Year Finalist - The Spectator

  • Award

    2023 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2023 Future of Legal Services Innovation - Legal Innovation Awards