In This Blog:
-
- ➤Do Small Businesses Need to Comply With State Data Privacy Laws?
- ➤What Counts as Personal Data Under State Privacy Laws?
- ➤Do Small Businesses Need to Comply with State Privacy Laws in 2026?
- ➤Does My Business Qualify for a Small Business Exemption?
- ➤Guide to Compliance For Small Businesses
- ➤Technical Safeguards That Satisfy Most State Requirements
- ➤What Are the Data Breach Notification Requirements for Small Businesses?
- ➤Does Hiring an Employee in a New State Create New Privacy Obligations?
- ➤How Remote Staff Helps You Manage Data Privacy Without an In-House Compliance Team
- ➤FAQs About Data Privacy Compliance in the U.S.
20 U.S. States. That’s the number, as of present, that have consumer privacy or data privacy compliance laws already in effect as of 2026.
The newest additions that joined the band are Indiana, Kentucky, and Rhode Island, implementing their state laws on January 1, 2026. Trailing behind are Oklahoma and Alabama. Their laws will find their footing in business reality by 2027.
You’re a small business. Or you were, now graduated, and stepping into the medium-to-slightly large arena. Only behemoth enterprises need to concern themselves with this. You don’t have that large of a consumer database to begin with.
That’s what many SMBs, and larger ones, are thinking. But these compliance laws are wider-reaching:
Exemptions are narrow.
What puts a wrinkle in all of this is that compliance laws are different per state. Here’s a breakdown, without the legal jargon, and tailored toward U.S. SMBs.
Do Small Businesses Need to Comply With State Data Privacy Laws?
Yes, small businesses may need to comply with state data privacy laws, even if they fall below a revenue threshold. Coverage depends on the specific state and may also be triggered by how much personal data your business collects, processes, sells, or shares. If your business handles customer, employee, or website visitor data, you should review which state privacy laws apply and what compliance obligations they create.
What Counts as Personal Data Under State Privacy Laws?
You might be thinking (and you’re not alone, with many US owners thinking along the same vein), “personal data” has to do with names, emails, SSNs, driver’s licenses. Facts. But the basket’s bigger now, so it also includes: IP addresses. Device identifiers. Cookie data. Geolocation. Purchase history. Behavioral profiles.
Illustration: Small e-commerce or services businesses don’t concern themselves with data privacy compliance. After all, they’ve advised their employees never to store credit cards or credit card info.
What they aren’t aware of is that their digital tools and business software collect regulated data. By default.
Is a Privacy Policy Necessary? Written?
Yes, and it’s more than “necessary.” If you collect any personal data from a website, regardless if you do so proactively or whether your systems do it on the backend, the best practice, and the safer, fewer-potholes course, is to post a privacy policy. Regardless of your business size. Regardless of the breadth of your customer base.
A privacy policy should include categories of information collected, purpose of collection, third parties, consumer rights, and contact method. Straightforward, that’s:
- What information you collect
- Why you collect it
- Who you share it with
- What options and rights they have over their own data
- How they can get in touch with you about it
It goes without saying (we’re saying it to cover all the bases) that your policy should be clear and complete, and devoid of confusing language.
Do Small Businesses Need to Comply with State Privacy Laws in 2026?
The answer’s somewhat shrouded in the gray: there’s no single federal privacy law that sweeps across the country and all its 50 states therein. And so follows that compliance is bound to the states your customers or employees are in.
What States Have Data Privacy Compliance Laws?
20+ States with comprehensive Privacy Laws (and 3 new ones for 2026).
There are core rights that share a common thread. In general, consumers can: request access to their data, ask for corrections, request deletion, request a copy of their data, and opt out of having it sold.
They also cannot be treated unfairly or discriminated against should they exercise said rights.
Does My Business Qualify for a Small Business Exemption?
I’m a small business. If my revenue is below a certain amount, does that imply privacy laws won’t apply to me?
Sounds reasonable? However, the law states that it applies to a business if it meets any one of three thresholds:
- Annual gross revenue over $26,625,000 (the original $25 million figure, adjusted for inflation as of 2025–2026)
- Buying, selling, or sharing the personal information of 100,000 or more California consumers or households annually
- Deriving 50% or more of annual revenue from selling or sharing personal information
Even just one of these bullets is enough of a trigger. A business earning $10 million a year that processes 150,000 customer records? Still a covered business under this law. To sum it up, revenue alone does not create an exemption.
Thresholds also vary significantly by state. For instance, Rhode Island’s threshold is at a low 35,000 consumers; the lowest of any state with a comprehensive law.
Guide to Compliance For Small Businesses
Compliance Tips for SMBs in the U.S.
Data privacy compliance is easier accomplished by looking at it not as adherence to certain requirements for a list of ongoing habits. Follow these in order:
#1. Run a Data Inventory
Only data that’s mapped, data that’s traceable, can be protected. This is your first move: identify every place customer or employee data is stored in your business.
What To Do: List every tool that has access to personal data. Anything from your CRM to payment processor, website analytics, HR system, and any spreadsheet with customer or staff information.
Note what type of data each tool collects and which member of you team’s in charge of it.
#2. Build Consent and Opt-Out Mechanisms
Most state laws require that customers, employees, job applicants, and other people whose data you come across can easily say no to having their data collected or sold. That means something working and accessible, like a cookie consent banner and an unsubscribe (you can also have a “do not sell my data”) button or link.
#3. Set Rules for How Long You Keep Data (and When to Delete It)
Holding data indefinitely, whether on purpose or not, is a liability. Most state frameworks expect businesses to define how long each type of data You’re also expected to delete it according to your set timeline once it comes to a close.
What To Do: That’s called a retention period. Each data type needs one. Example: transaction records for 3 years, job applicant data for 1 year post-decision. Put deletion on a recurring calendar reminder, and assign someone to take charge of it so no data’s missed.
#4. Prepare for Data Subject Access Requests (DSARs)
In most of the 20 states with comprehensive laws, consumers have the legal right to ask what data you hold about them. They can ask to correct it or request deletion. Put these together, and they’re called Data Subject Access Requests.
What To Do: Designate one person as the point of contact for such requests. If you’re a small team, it can be you, the owner (but better if it’s someone else; one other thing to remove from your plate as the business vision-driver).
Most states expect a response within 45 days, so set up a simple process now instead of scrambling when you receive the first request.
Technical Safeguards That Satisfy Most State Requirements
Three more consistent habits to stay compliant with most privacy laws:
Role-Based Access Control: Who Actually Needs to See What
Not everyone on your team needs access to everything. Review who has access to which systems, at least twice a year. Immediately remove access when someone leaves or changes roles.
Encryption, MFA, and Secure Storage Basics
Here’s what’s usually expected:
- Full-disk encryption on any device (laptop, external drive) that stores customer or employee data; makes data unreadable if the device is lost or stolen
- Multi-factor authentication (MFA) on logins tied to sensitive systems; requires a second verification step beyond one password
- Secure cloud storage, so the provider handles baseline protections, but your business is responsible for how permissions and sharing settings (who can access data and what) are configured
Vendor and Third-Party Data-Sharing Agreements
Any vendor who gains access to your customer or employee data should sign a written agreement that establishes how they’ll protect that data (bookkeepers, marketing agencies, software tools, remote professionals, etc).
What To Do: Before bringing on any new vendor or contractor who’ll handle personal data, obtain a signed agreement before moving on to anything else.
What Are the Data Breach Notification Requirements for Small Businesses?
Every US state, plus DC, has a data breach notification law. 20 have set a fixed numeric deadline for notifying affected individuals, ranging from 30 to 60 days. The rest use the clause “without unreasonable delay,” which still requires prompt action even without a locked-in number of days.
States requiring notification within 30 days: California (shorter if 500 or more Californians are affected), Colorado, Florida, Maine, New Jersey, New York, Washington
Most states also require you to notify the state Attorney General if a breach affects enough people; generally 250, 500, or 1,000 residents.
What To Do: If your customers or employees are widely scattered over statelines, use the strictest applicable deadline.
How to Build a Response Plan For Data Privacy (Before You Need One)
Who’s at the front of line of getting contacted? IT support? Legal counsel? Your insurance provider? Write that down and store the contact list where it’s accessible, and remains accessible should systems get compromised.
Direct Channel
Have questions? Drop our team a line anytime.
Does Hiring an Employee in a New State Create New Privacy Obligations?
It does.
Contractor or otherwise, hiring an employee who’s physically in a new state means that state’s employment and privacy rules are yours to follow. Apart from the laws governing the state you’re in, as the owner.
Hire from four different states and you’re expected to adhere to all of the states’ data privacy laws simultaneously. Then, there’s the accounting for thousands and tens of thousands of customers also in different states.
Businesses finding legal avenues to reduce this exposure? They’re hiring offshore.
How Remote Staff Helps You Manage Data Privacy Without an In-House Compliance Team
This isn’t new to our team at Remote Staff. Long before Data Privacy Compliance gained prominence, we’d already foreseen the complications US SMBs would have to pick at when hiring locally, across different U.S. states.
For over 18 years, Remote Staff has been matching businesses with remote professionals who are an ideal fit for what their operations need. But we don’t stop there. Our models abide by confidentiality and NDA practices, so that vetting, onboarding, HR, and payroll don’t hit any snags.
No need to worry about state compliance when you’re working with talent from a completely different geography and market pool.
FAQs
Does hiring a remote worker in California make my business subject to the CCPA?
Not automatically. The CCPA applies based on your business meeting revenue or data-volume thresholds ($26.625 million in annual gross revenue, or processing data for 100,000+ California consumers or households). Having a California-based employee does mean their personal data (payroll, HR records, benefits information) falls under California’s broader privacy protections.
Are small businesses under $25 million in revenue exempt from state privacy laws?
No. Though revenue is a threshold, it’s one of several. Most states also consider how many people’s data your business handles. Here’s an example: a business well under $25 million in revenue can still be covered if it processes personal data for enough consumers (depending on what the state law says is the minimum number of people).
How often should I update my data privacy compliance checklist?
Review it at minimum once a year, and immediately whenever you add a new state to your customer base, hire in a new state, or bring on a new software vendor that touches personal data. State privacy laws are changing quickly right now (three states added comprehensive laws in January 2026 alone), so a checklist that was accurate last year may already be outdated.
What’s the difference between data privacy and data security?
Data privacy is about the rules governing how you collect, use, and share personal information, and what rights consumers have over that data. Data security is the technical protection of that data (encryption, access controls, secure storage) from unauthorized access or breaches. You need both: privacy compliance without security measures leaves the data vulnerable, and security without privacy compliance can still mean you’re violating consumer rights.
Do offshore remote workers affect US data privacy compliance?
Offshore workers don’t trigger US state employment-linked privacy obligations the way a US-based remote hire in a new state would, since they aren’t residents of that state. However, if they handle US customer data as part of their role, that data is still covered by whichever state privacy laws apply to your customers, and you’re responsible for making sure any vendor or staffing arrangement includes proper data protection agreements regardless of where the person is physically located.
What Is a DPIA? What Does DPIA Mean?
A DPIA, or Data Protection Impact Assessment, is a structured review that helps a business identify privacy risks before starting a project or process involving personal data. It assesses how data will be collected and used, the potential impact on individuals, and the safeguards needed to reduce those risks—particularly where processing could pose a high risk to people’s rights and freedoms.
Related Read: Learn about the Cybersecurity Skills Shortage US and Cybersecurity Breach Legal Guide, and find out why SMBs are being targeted by bad actors.
You Now Know the Answer to What Is Data Privacy Compliance. What’s Next?
Data privacy compliance isn’t only a concern for companies with legal teams and compliance officers. Small businesses collect more personal data than they may realise, often through the tools they use every day. Even if you don’t have customer records in the millions.
There’s a sticky, tricky part to all this. It’s that there’s no one-size-fits-all rulebook. What applies to your business can depend on where your customers are and how much data you handle. It depends on what you do with it.
Start by knowing what you collect and where those are from. Know where that data goes, and who has access to it.
A proper data inventory, clearer privacy practices, tighter access controls, and a plan for handling requests or breaches are where it’s at. Easier said than done, but a whole lot simpler than the legal jargon related to it. Start now before compliance becomes a problem you’re forced to solve in a hurry.
Find specialists who can regularly check that your records are data privacy compliant. Call us or Request a Callback today.
find the role you need
Vaune Everis Cura has always been a writer in the truest sense, drawn to the art both as a personal creative pursuit and as a profession. Her experience penning content across digital marketing spaces and collaborating with business owners and market shapers has broadened her craft to include strategic direction and SEO insight. Having spent years with the InterContinental Hotels Group before stepping boldly into freelancing, she understands that at the centre of it all are genuine, meaningful brand–customer relationships built on purposeful, human content.
