Businesses subject to the California Consumer Privacy Act (“CCPA”) can breathe a small sigh of relief. On August 30, 2020, the California Legislature passed AB 1281. AB 1281 extends the business-to-business and employee personal information carve outs until January 1, 2022. The bill is now headed to the Governor's office for signature. There is no reason to believe the Governor will not sign it.
As passed, the CCPA provided a one-year exemption on the application of CCPA to: (1) personal information obtained from business-to-business communications, and (2) personal information obtained from employees. That sunset provision was set to expire on January 1, 2021.
The Assembly Floor Analysis noted that the one-year sunset provision was intended to provide a year for the applicable stakeholders to find a long-term solution. However, COVID-19 has required the legislature to reevaluate its priorities to do what is best for the state of California.
Important to note, the bill will become inoperative if California voters approve the California Consumer Privacy Rights Act (“CPRA”), which is a ballot initiative and will be voted on by California voters in November. The CPRA contains language that delays these two carve outs for two years, until 2023. Recent polling indicates the vast majority of Californians will vote in favor of the CPRA.
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