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Google fined €50 million for infringing the GDPR

Company groups, Data protection, Medium-sized companies, News, Start-ups / / , , , , , ,

On 21 January 2019, the French Data Protection Authority (the ‘CNIL’) fined Google EUR 50 million for infringement of the GDPR. Though this decision only concerned user data, given the unprecedented amount of the fine, it should be considered a warning to all companies to ensure that their personal data management practices, including on HR matters, are GDPR compliant.
The Authority based the investigation on two complaints that arrived immediately after the entry into force of GDPR on May 25, 2018.

The CNIL has examined the complained data processing operations and found two types of infringement.

• Violation of the obligation to have a legal basis for advert personalization processing:

The CNIL observed that the information on the data processing activities provided to users was neither easily accessible nor always clear or comprehensive. Essential information required to sufficiently inform data subjects of storage purposes, periods or categories of personal data used for ads personalization was spread across various documents.

• Violation of the obligation to have a legal basis for advert personalization processing:

Google relied on data subjects’ consent to process data for ad personalization purposes. However, the Authority found that this agreement did not constitute specific, informed and unambiguous consent for the data subjects, because they had to ‘agree’ to Google’s entire privacy policy and terms and conditions in order to access the its products. The CNIL concluded that the data subjects’ consent was not freely given, because they had not been sufficiently informed due to the use of multiple documents and the unclear depiction of the services and websites that would be involved in the ad personalization section.

Further, the CNIL noted that before creating a Google account, each user was asked to agree to the company’s terms of service and privacy policy, which he or she could only amend at a later time by going into ‘more options’ and de-selecting ad personalization.

This is the first time that the CNIL has applied the new sanction limits provided by the GDPR since its entry into force on 25 May 2018. In imposing the fine, the Authority took into account the serious breach of the main principles of the GDPR, according to which the maximum amount to be imposed could be EUR 20 million or 4 % of the company’s global annual turnover. The factors taken into consideration in the Authority’s decision whether to impose a fine or its amount, were the fact that Google’s violations were not one-off incidents or limited in time, but rather continuous breaches of the GDPR, and that their data process cover a wide range of data subjects. Lastly, the CNIL pointed out that as the company’s business model was partly based on ad personalization, Google had all the more reason to ensure that it complied with its GDPR obligations.

The fines serve as a lesson for employers that they need to ensure that the information provided to applicants and employees on the processing of their personal data is clear, unambiguous and easily accessible.

Google fined €50 million for infringing the GDPR Read More »

Opportunities created by the “overtime act” put into practice

Employment, labour law, Medium-sized companies, News, Start-ups / / , , , , ,

Amending Act CXVI of 2018 on the organization of working time and the minimum fee of labor leasing activity (hereinafter: amendment) has been announced on 20 December 2018 and entered into force on 1 January 2019.

In our article we are looking for answers to the following questions; what opportunities the change has actually created for employers and which employers can take advantage of the opportunities created by the change.
The amendment essentially concerns issues related to the organization of working time, in particular the rules on working time banking and overtime.

The new opportunities provided by working time banking are only open for employers with collective agreements, while the opportunities in the area of overtime may be used by employers without collective agreements as well, as follows:

I. Options based on collective agreement

According to the amendment as from 1 January 2019, a maximum of 36 months of working time banking may be introduced on the basis of a collective agreement instead of a maximum of one year. In practice, this means that employers wishing to apply a longer working time frame, an amendment must be initiated to the collective agreement currently in force or; in the absence of a collective agreement in force, a collective agreement must be concluded with the trade union authorized to conclude the collective agreement, including that option.

It is important to note that not only 36 months, but shorter, e.g. a 24-month working time frame may also be included in a collective agreement by the parties.

There is a statutory limit to the extremes of work schedules arrangement within the longer working time banking – in addition to the rules on rest days/rest periods – that the 48 hours a week should be at most an annual average (and not, for example, the average of the three years).

For the time being, it is disputed whether the working time banking of more than one year is harmonized with the rules of Directive 2003/88/EC on certain aspects of the organization of working time. Article 19 of that directive provides that a ‘reference period’ for the calculation of working time or rest periods in a collective agreement may not exceed 12 months.

II. Options based on individual agreements with employees

The annual number of overtime hours can be increased up to 400 hours based on an individual agreement with employees. This option is therefore open to employers which do not have a collective agreement/ do not have a trade union with authorized to conclude a collective agreement.

400 hours is the absolute upper limit for overtime work. Higher amounts cannot validly be stipulated in a collective agreement either.

The employee may terminate the agreement by the end of the calendar year. Termination of the agreement shall not be a reason for termination of employment.

III. Options based on the request of the employee

According to the amendment, overtime (supplement payment) is not generated in situations where the employees themselves request the modification of the working time schedule in advance within 96 hours.

This provision recognizes situations that actually occur in practice, when for example the employee asks for a change in the working time schedule for some kind of personal reasons, e.g. “exchange” a workday with another colleague.

It is important that the initiative really comes from the employee. Using employee’s requests for employers’ interests are abusive, thus illegal.

In relation to the option described above it is also important to take into account the general principle of labor law, that working schedule arrangements, overtime arrangements are possible only if the requirements of healthy and safe work are met. In addition to the economic benefits associated with more flexible working hours, it is important to consider that the employer may be required to pay financial compensation for the damage caused by the workers who are proven overloaded or the accidents and health damage caused to them.

Opportunities created by the “overtime act” put into practice Read More »

Employee Stock Ownership Program as a possible alternative to cafeteria

Company groups, Employment, labour law, Medium-sized companies, News / / , , , ,

The Employee Stock Ownership Program (ESOP) – which has been introduced in 2015 – may offer a beneficial and flexible alternative to cafeteria for employees from a taxation point of view.
The point of ESOP is that the company’s employees acquire shares in their employer. The main purpose of the ESOP system is to create ownership interest for the participating employees. Although the employees become owners, they do not have voting rights; therefore, they have no say in the employer’s operations. Their shares only entitle them to receive payments through the company.
The law on ESOP has been changed from 1 January 2019. In this context, existing legal rules have been clarified and additional guarantee rules for employee ownership interest have been established.
The greatest advantage of ESOP lies in its taxation. Rather than the employees would be a subject to a 45% tax burden on their salary, they may receive a part of their salary with only a 15% tax burden as an ’investment income’ through the ESOP.

Employee Stock Ownership Program as a possible alternative to cafeteria Read More »

Blacklist on Data Protection Impact Assessment (DPIA)

Company groups, Data protection, Medium-sized companies, News, Start-ups / / , , , , , , ,

Under Article 35 (4) of regulation (EU) 2016/679 of the European Parliament and of the Council („GDPR”), the National Authority for Data Protection and Freedom of Information
(„NAIH”) established a list of the kind of processing operations which
are subject to the requirement for a data protection impact assessment („black list”).
According to article 35 of the GDPR: Where a type of processing in particular using new technologies, and taking into account the nature, scope, context and purposes of the processing, is likely to result in a high risk to the rights and freedoms of natural persons, the controller shall, prior to the processing, carry out an assessment of the impact of the envisaged processing operations on the protection of personal data.

The GDPR defines some circumstances when a DPIA is to be carried out:
• a systematic and extensive evaluation of personal aspects relating to natural persons which is based on automated processing, including profiling, and upon which decisions are based that produce legal effects concerning the natural person or similarly significantly affect the natural person;
• processing on a large scale of special categories of data, or of personal data relating to criminal convictions and offences; or
• a systematic monitoring of a publicly accessible area on a large scale.

The black list contains the following processing activities when a DPIA is to be carried out:
• processing of biometric or genetic data;
• scoring;
• credit or solvency rating;
• further use of data collected from third persons;
• the use of the personal data of pupils and students for assessment;
• profiling;
• anti-fraud activity;
• smart meters;
• automated decision making producing legal effects or similarly significant effects;
• systematic surveillance;
• location data;
• monitoring employee work;
• processing of considerable amounts of special categories of personal data;
• processing of considerable amounts of personal data for law enforcement purposes;
• the processing of the personal data of children for profiling;
• the use of new technologies for data processing;
• the processing of health data;
• an application, tool, or platform for use by an entire sector;
• combine data from various sources.

Blacklist on Data Protection Impact Assessment (DPIA) Read More »

Developing case law under the GDPR

News /

Six months have passed since May 25 when the General Data Protection Regulation (GDPR) became applicable. There are several rules in the GDPR that leave space for interpretation and implementation. Besides the general guidelines and opinions issued by the European Data Protection Board and the national data protection authorities – as Hungarian National Authority for Data Protection and Freedom of Information (NAIH) in Hungary –, decisions in individual cases can serve as compass in finding the right direction how the provisions of the GDPR are interpreted.
Of course, it takes time until the first decisions and judgments will be issued under the GDPR but we may expect more and more decisions and judgments that can shape the data protection practice.

Experience has shown that NAIH is active; several proceedings have been initiated on controlling the data processing practices of operators and assessing compliance with data protection laws and regulations.

Our colleagues constantly monitor the evolution of case law and provide information about any changes.

Developing case law under the GDPR Read More »

Resolution on criteria for setting administrative fines

Company groups, Data protection, Medium-sized companies, News, Start-ups / / , , , ,

In its resolution published on 19 September 2018, the National Authority for Data Protection and Freedom of Information (NAIH) assessed the criteria to take into consideration during the process of setting a fine, especially the level of the fine that NAIH may impose in case of the first infringement of the data protection regulations.

The Authority is being guided by the provisions of the Regulation (EU) 2016/679 of the European Parliament and of the Council (“Regulation”) and the Act CXII of 2011 on Informational Self-determination and Freedom of Information (“Info Act”) with regard to the determination of the fine.

Article 83 (1) of the Regulation states, that the administrative fines shall be effective, proportionate and dissuasive. Pursuant to Preamble (148) in a case of a minor infringement or if the fine likely to be imposed would constitute a disproportionate burden to a natural person, a reprimand may be issued instead of a fine.

This provision was completed by Section 75/A of the Info Act according to which the Authority shall exercise its competence provided for in Article 83 (2)-(6) of the Regulation in due consideration of the principle of proportionality, in particular with the provision that in the event of any non-compliance with the Regulation for the first time, the Authority shall in principle issue warning to the data controller or data processor in order to arrange the remedy of the infringement.

The Authority shall take into account the Data Protection Working Party (WP29) guidelines on the application and setting of administrative fines for the purposes of the Regulation 2016/679, available at the following link: http://ec.europa.eu/newsroom/article29/item-detail.cfm?item_id=611237

Resolution on criteria for setting administrative fines Read More »

The income related tax changes in 2019: the new type of social contribution tax (SZOCHO)

Employment, labour law, Medium-sized companies, News, Start-ups / / , ,

The Act LII of 2018 on the social contribution tax was published on 31 July, 2018 and it will significantly increase the tax items payable after the wages and other incomes from January 1, 2019.
The termination of healthcare contribution (EHO) and SZOCHO with the rate of 19.5% on income instead of EHO are considered to be significant changes of the new regulation.

The new provisions clearly increase the dues of the employers, e.g. increasing tax rate after the fringe (non-wage) benefits, increase of tax base for calculating and the tax rate in case of dividend income, and the significant reduction of tax reliefs. Therefore during planning of wages for the next year, the following new rules shall be considered.

In case of the income withdrawn from the business account, dividend income, entrepreneurial dividend fund, capital gains income, the maximum amount of SZOCHO shall be increased to19,5 percent of twenty-four times of the minimum wage, which shall be HUF 645.000, – calculating with the minimal wage in the present year – from the current amount of HUF 450.000. In addition, the base of SZOCHO payable after the insured member of general partnership, limited partnership and limited liability company shall be 112,5 percent of the minimum wage.

Generally the pay office/employer shall pay SZOCHO, however in some special case the private person earning the income shall pay the SZOCHO. There are special legal provisions regarding assignment, temporary agency work and employment relationship established by more than one employer.

Abolished tax reliefs

– tax relief for young employees under 25 years and employees over 55;
– tax relief for participants in Karrier Híd Program;
– tax relief for research and development activity;
– tax relief enforceable by the employer employing doctoral candidate employees or students participating doctoral education determining by the Act CCIV of 2011 on the national higher education;
– tax relief for permanent job-seekers;
– tax relief in connection with the payment of child care allowance and benefit.

Please note that the tax relief which may be claimed for definite period of time shall not be ceased automatically by 1 January, 2019. These may be obtained during the entire validity period.

The following group of people will be entitled to tax reliefs from the next year:

– the unskilled workers and employees in agricultural positions;
– people who have been out of job for a particular period of time;
– woman nursing three or more children,
– disabled employees,
– workfare workers.

Only one type of tax relief shall be claimed regarding any employee at the same time. In case of eligibility for more tax reliefs, the employer may decide, which tax relief to claim.

The income related tax changes in 2019: the new type of social contribution tax (SZOCHO) Read More »

About the labour law related changes in 2019: the cafeteria allowances and the taxes of the retired employee’s salary

Employment, labour law, Medium-sized companies, News, Start-ups / / , , ,

The Act XLI of 2018 on the alteration of the tax law and other related acts, furthermore on the super-tax of immigration was published on 26 July, 2018 and it will significantly amend the system of the cafeteria allowances and makes the employment of the retired persons more favourable from the next year.

We summarize the essence of the changes as follows:

– only the so called “Széchenyi Pihenőkártya” (SZÉP Card) will remain in the favourable tax category (34,5% in the next year) with a frame of HUF 450.000.-/year;
– the following allowances fall under the tax category of 40,71% in the next year: SZÉP Card over the frame detailed above; gift voucher once a year, up to max. 10 % of the wage minimum;
– all other allowances will be calculated based on the general rules, with the general tax rate as salary in the next year.

What to do in connection with the above mentioned changes:
– review of the cafeteria policy;
– review and appropriate amendment of the documents containing the cafeteria allowances (employment contracts, information letters).

In the next year in case of pensioners employed under the Labor Code no social contribution and social contribution tax (szocho) have to be paid. With regard to that the pensioners (falling into the above mentioned category) will be not entitled to social security allowances.

About the labour law related changes in 2019: the cafeteria allowances and the taxes of the retired employee’s salary Read More »

Changes of Companies Act effective as of 1 July 2018

Company groups, Corporate law, Medium-sized companies, News, Start-ups / / , , ,

On 1 July 2018 entered into force the modification of Act V of 2006 on Companies Registration and Winding-up Proceedings amending the rules of winding-up, especially the simplified procedure, the statutory supervisory procedures and also makes possible to file with the court application for the registration of changes prior to the effective date.


Preliminary request for the registration of changes
The request for registration of a (future) change can be submitted in advance so even before the effective date of change. Nevertheless, the preliminary request for registration of future company change cannot be submitted within more than 30 days prior to the date of change.

Executives without right of representation
It is also mandatory to register those company executives who do not have right of representation for the company. This amendment concerns in particular companies where the management is constituted by a board of directors where not all directors have right of representation for the company.

Legal supervisory procedure
Any person claiming to have a legal interest in starting a legal supervisory procedure against a company may only start a legal supervisory procedure in its own name as applicant therefore no name application is not possible.

Winding-up, simplified winding-up procedure
Any company form (this including private limited companies (in Hungarian “Zrt”) and limited liability companies (in Hungarian “Kft.”) may choose to terminate itself by simplified winding-up procedure, provided that is not subject to mandatory audit. In the case of simplified winding-up, no administrator is required to be appointed, the administrator’s duties are performed by the company’s executives (i.e. managing directors). The simplified winding-up procedure shall be at first reported to the Hungary Tax Authority who shall automatically inform the company court that shall publish a notice thereof in the Company Gazette.

Changes of Companies Act effective as of 1 July 2018 Read More »

The labour law related changes in 2018

Employment, labour law, Medium-sized companies, News, Start-ups / / , , , , , , ,

A summary regarding the labour law related changes in  2018 – mandatory minimum wage, social contribution tax, healthcare contribution, simplified contribution to public revenues, childcare benefits, sick pay, cafeteria rules, statutory retirement age

The labour law related changes in 2018

Government Decree No 430/2016. (XII. 15.) determines the amount of the mandatory minimum wage. The mandatory minimum wage for full-time employees increased with 8% as of 1st January 2018, from 127,500 to gross 138,000 HUF. The guaranteed minimum wage paid to skilled workers rose by 12% in the case of completion of full time working as of 1st January 2018, from 161,000 to 180,500 HUF. The social contribution tax (SZOCHO) and the amount of the healthcare contribution (EHO) reduced from 22% to 19,5%. The simplified contribution to public revenues (EKHO) also decreased, the employer shall pay 19,5% EKHO instead of the previous 20%.  

Due to the increasing minimum wage the amount of the childcare benefits (GYED), the benefits for university students and graduates grew as well as the sick pay as of 1st January 2018. The eligible families are entitled to a maximum of 193,200 HUF in childcare benefits. Students enrolled in a bachelor’s program will be eligible for 96,600 HUF support and students enrolled in a master’s program for 126,350 HUF. Female university students or graduates are eligible for an extra year of child support up to the child’s second birthday. Moreover, fathers also eligible to claim baby-care allowance (CSED) in more cases from 1st January 2018. The daily maximum of sick pay increased from 8500 HUF to 9180 HUF.   

In addition to the above, the cafeteria rules have changed. New cafeteria element: a student loan reimbursement as employer benefit can be provided tax free up to the installments but not more than 27,600 HUF monthly. The conditions for a tax free housing allowance eased, the ceiling price of this benefit became higher (nearly 83,000 HUF). The burden on employers reduced from 43,66% to 40,71% in case of certain specific benefits (Erzsébet vouchers, hot meals at the work place, monthly public transport ticket, school starting support, contribution to a voluntary health fund/pension fund). The costs of cafeteria cash payment and benefits may be granted as Széchenyi Recreation Card („SZÉP” Card: accommodation, catering, leisure) remained the same 34,22%, if it does not exceed 450,000 HUF. 

The statutory retirement age increased to 63,5 year and the amount of pensions amended favorably. The pensions (including among others retirement pension, widows’ pension, orphans’ allowance etc.) increased with 3% with the effective date of 1st January 2018. The amount of minimum pension remained unchanged (28,500 HUF).

 

The labour law related changes in 2018 Read More »

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