Preparing Your Business for Potential Privacy Regulations Anticipated in 2025?
United States state privacy regulations are on an upward trajectory, and businesses need to brace themselves for a busy year ahead. In 2025, eight extensive privacy laws at the state level will come into effect, indicating a rising regulatory trend as states push businesses to adapt to increasingly intricate compliance standards across different jurisdictions. The challenge for businesses lies in understanding the intricacies of each law while maintaining uniform operational practices across various jurisdictions.
For enterprises already navigating laws like California's CCPA/CPRA or Virginia's CDPA, adjusting compliance for the new laws may seem manageable, albeit not without complications. Here's a breakdown of the eight laws taking effect in 2025, their unique requirements, and the crucial steps businesses can prioritize to prepare.
Eight New State Privacy Laws: Effective Dates, Thresholds, and Penalties
What Businesses Need to Understand
Diverse Thresholds for Applicability
While the majority of laws have thresholds based on the number of consumers' data processed, there are exceptions. Nebraska's NDPA applies to all organizations operating within the state, except those classified as small enterprises according to federal SBA definitions. Meanwhile, Tennessee adds a revenue threshold ($25 million) alongside processing requirements.
Companies generating substantial revenue from selling consumer data face lower threshold requirements for compliance, such as New Jersey's NJDPA (triggered at 25,000 consumers) and Delaware's DPDPA (triggered at 10,000 consumers).
Consumer Rights and Unique State Obligations
The new privacy laws generally adhere to well-established principles, providing consumers the right to access, correct, delete, and transfer their personal data, as well as opt out of data sales, targeted advertising, and profiling. However, certain states impose unique responsibilities that businesses must address:
- Delaware, Minnesota, and Maryland require businesses to detail the third parties with whom a consumer's personal data has been shared.
- Minnesota (MCDPA) permits consumers to challenge profiling decisions, request reviews of data used, and obtain explanations for outcomes (e.g., employment or credit score determinations).
- Maryland (MODPA) prohibits the sale of sensitive data outright, limits data collection to only what is reasonably necessary, and mandates regular privacy assessments for high-risk activities—including any algorithm use, although the term "algorithm" is not defined.
Companies executing background checks should be aware that these laws generally exempt data collected under the Fair Credit Reporting Act (FCRA). However, businesses should still ensure compliance with broader data handling and notification obligations.
Cure Periods and Penalties for Non-Compliance
Cure periods enable businesses to rectify violations before enforcement actions are initiated, but their duration varies across states:
- Iowa (ICDPA) and Tennessee (TIPA) offer permanent cure periods (90 and 60 days, respectively).
- Delaware (DPDPA) and New Hampshire (NHDPA) provide 60-day cure periods, but these expire in 2026.
- Nebraska (NDPA) and New Jersey (NJDPA) only provide 30-day cure periods.
- Maryland's MODPA grants the state Attorney General the power to decide if a cure period is necessary.
Violations penalties range from $7,500 to $25,000 per instance, with heightened repercussions for intentional violations, such as those under Tennessee's TIPA.
Strategies for Compliance
Assess Applicability:
- Examine whether your business meets the threshold criteria under each state law.
- Conduct a detailed data mapping exercise to understand the data you collect, its storage locations, and how it's processed.
Revise Privacy Policies:
- Update your privacy policy to comply with applicable laws, such as outlining the categories of personal data collected, purposes for processing, and consumers' rights.
- Include disclosures regarding third-party data sharing, where required (e.g., Delaware, Minnesota, Maryland).
Upgrade Rights Request Processes:
- Revise processes for managing access, deletion, correction, and opt-out requests to comply with state-specific guidelines.
- Implement features to acknowledge universally accepted opt-out mechanisms, such as Global Privacy Control signals, when necessary.
Perform Privacy Impact Assessments:
- States like Maryland and Minnesota require assessments for high-risk processing activities, including profiling and algorithm use.
- Establish a framework for evaluating potential risks and documenting compliance.
Train Teams and Update Contracts:
- Educate staff responsible for managing consumer data on new rights and responsibilities.
- Revise agreements with third-party processors to ensure compliance with state requirements for data processing agreements.
Final Thoughts
The ongoing expansion of state privacy laws underscores the fact that consumers are increasingly demanding control over their personal information, and states are joining the fray in the absence of federal legislation. For businesses, the 2025 laws highlight the importance of proactive privacy compliance. By assessing applicability, streamlining rights request processes, and maintaining clear and up-to-date privacy notices, organizations can mitigate risks while fostering consumer trust in a highly regulated environment.
In this fractured regulatory landscape, the path ahead is clear: prioritize transparency, responsibility, and the judicious use of data—not just for compliance, but as a competitive edge.
- With the Minnesota Consumer Data Privacy Act (MCDPA) among the eight state-level privacy laws set to take effect in 2025, businesses must be prepared to accommodate consumers' right to challenge profiling decisions and request reviews of data used.
- In the upcoming year, employers will need to comply with various U.S. data privacy laws, including the Maryland Online Data Protection Act (MODPA), which prohibits the sale of sensitive data and limits data collection to what is reasonably necessary.
- Businesses should refer to an employer compliance guide to understand and implement the requirements of the Minnesota Consumer Data Privacy Act, as well as other state-level privacy laws that are coming into effect in 2025.
- By 2025, businesses will be subject to 2025 state privacy laws, such as Delaware's Personal Data Privacy Act (DPDPA), which triggers compliance when a company generates substantial revenue from selling consumer data to 10,000 individuals.
- State-level privacy regulations, like the Maryland Online Data Protection Act and Minnesota Consumer Data Privacy Act, will necessitate updates to privacy policies, rights request processes, and procedures for handling third-party data sharing throughout 2025.
