CCPA Compliance: When and How Your Business Must Conduct Privacy Risk Assessments

Following, our previous post which detailed the new ADMT requirements in the recently approved CCPA regulations we now turn to another critical component of the new regulation: mandatory Risk Assessments for businesses subject to the CCPA. These assessments are a core part of the new compliance landscape, requiring businesses to analyze whether the risks to consumers’ privacy from processing personal information outweigh the benefits to the consumer, the business, and the public. If privacy risks outweigh the benefits, then the new rules does not allow the continuation of the processing activity.

When is a Risk Assessment Required?

Businesses that process consumer data, especially personal sensitive information, must conduct a risk assessment before engaging in any activity that presents a “significant risk to consumers’ privacy”. The regulations specifically highlight several processing activities that trigger this requirement:

• Selling or sharing personal information.
• Processing sensitive personal information (with limited exceptions for employee/contractor payroll and benefits administration).
• Using ADMT to make a significant decision about consumers.
• Using automated tools to infer or analyze traits based on systematic observation of employees, job applicants, or students.
• Processing personal information intended to train ADMT for purposes like emotion recognition, biometric profiling, or significant decision-making.

Navigating Multi-State Compliance

While the CPPA permits a single risk assessment to comply with multiple state consumer privacy laws or other purposes, that assessment must contain all the detailed information required by the new California regulations. Given that the CPPA has many more requirements than most other state laws, any risk assessment completed for another state is likely non-compliant with California’s rules and will need to be updated.

Deadlines and Submission

For any current processing practices in place before the regulations take effect, a risk assessment must be completed by December 31, 2027. Assessments must be reviewed and updated every three years, or as soon as feasible (no later than 45 calendar days) if there is a material change to a processing activity.

Businesses subject to risk assessment requirements must begin compliance by January 1, 2026. By April 1, 2028, they must submit to the CPPA:

• An attestation that required risk assessments were completed, and
• A summary of their risk assessment information.

Your Next Steps for Risk Assessment Compliance

Start immediately to identify all processing activities that may require arisk assessment. Given the complexity involved, this is not a process your business should attempt to complete alone. If you are handling consumer data as part of your business, or using AI Tools that uses consumer data for its training or decision making, and need to prepare your business comply with the new CCPA regulations, contact us immediately. ANR LAW LA with its expertise in Data Privacy, and AI regulations, can help prepare your business for the CCPA Risk Assessment mandate.

This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between ANR Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.