Human Resource Management

Why employee data protection is a top compliance priority in 2023

The impact of data privacy laws on HR content management

Protecting employee privacy is not a new thing. Some of the most sensitive personal information collected and managed in the workplace – personnel files, employment contracts, compensation/benefits and performance reviews – are employee or HR related.  Over the years, numerous laws have been promulgated to protect an employee’s right to privacy and this sensitive information. Now, due to omnibus data privacy laws, even greater attention is being directed at how organizations (and their HR departments) collect, manage, and dispose of employee-related personal data.  

Manage compliant employee files with a records management checklist.

Impact of data privacy laws  

Many data privacy laws, including two of the most comprehensive – the EU’s General Data Protection Regulation (GDPR) and Brazil’s General Data Protection Law (LGPD) cover applicant and employee data and, as a result, have afforded employees the same personal data protections as consumers. Under these laws, among other things, employers need to inform their employees about their data collection practices and the rights they have.  

In the US, these non-industry-specific data privacy laws have not covered employee-related data. That is until now. When the California Privacy Rights Act (CPRA) amendments took effect on January 1, 2023, exemptions that would have excluded certain employee and HR-related personal information collected expired. As a result, many California residents in their role as job applicants, employees, and independent contractors now have the same rights conferred to California consumers relating to their employee personal information/HR data. Employers will need to provide California-resident employees and applicants notice at collection including exercisable rights to access, delete or correct their data and limit the use and disclosure of sensitive personal information.

Like the GDPR and LGPD, obligations will also include, among other things the purpose and duration of processing and limit the collection and retention of personal data to only what is necessary, relevant, and adequate to fulfill the purpose for which the data was processed. As a storage limitation, organizations should also ensure that data should no longer be retained for longer than needed. 

Impact of privacy laws on HR data management  

While organizations need to focus on updating privacy notices and evaluating other program activities, content management strategies need to be reconsidered to ensure stronger governance and content protection associated with employee-related personal data such as:

  • Contact information
  • Application data
  • Performance reviews
  • Time records
  • Compensation history
  • Wage statements  

This will also include data that someone can reasonably identify about an employee while interviewing or performing their job responsibilities, which requires greater security protections given its sensitive nature, including:

  • Biometric data
  • Geolocation data
  • Data around race or ethnic origin  

Classification and retention  

There have always been rigorous recordkeeping requirements pertaining to HR employment records and employee data, as well as challenges managing that content. All too often employee files are not centrally managed and housed in multiple systems, or departments use disconnected tools for file storage and retention which creates poor visibility of which employee documents are stored and where. This is particularly challenging when it might be housed in unstructured environments such as emails, network shares, laptops and other locations. As a result, many organizations have difficulty locating employee documents and applying retention policies. With the broader reach of data imposed by new data privacy laws, this will undoubtedly create further challenges.  

Employee rights requests  

With the extension of consumer privacy rights to employees and job applicants, there will also be a significant increase in employee rights requests. As I mentioned above and in an earlier blog, the volume of employment-related data frequently stored in unstructured environments or distributed across siloed systems will present challenges related to both identifying and responding to employee-initiated requests.

Many organizations will leverage or rely upon their HR team to support the search and retrieval process associated with these requests, keeping them away from other valuable tasks needed to support departmental activities. This is particularly problematic due to the stringent deadlines to fulfill the requests. Unless changes are made to processes and specialized tools are used to automate activities, businesses will need to ensure that they have very well-trained personnel available (with strong institutional knowledge to identify and mine through this content).  

Mitigating privacy risk through technology  

Centralized document management  

Organizations need to establish an integrated central repository as a single source of truth to manage HR content across the entire employee and applicant lifecycle and mitigate risk associated with unsecured, unmanaged personal data. Centralization of documents improves the searchability and auditability of employee documents as well as provides a number of different features that will aid in efforts to review, redact, secure and share/export employee files to meet regulatory obligations. Utilizing robust content management, organizations can decrease the dependency on manual processes, and improve searchability and governance to retrieve documents to satisfy fulfillment obligations within the limited response timeframe, not to mention free up valuable resources.   

Refocus on retention management  

It is critical for solutions to make it easy to keep track of all the shifting rules around privacy for employee documents. Organizations need to revisit their records retention practices including policies based on country, region, and job specifications as well as defensible disposition activities. This will include regularly updating their records to reflect accurate and necessary personal information about their employees and being prepared to correct or dispose of information. Not only do they need to evaluate how to best integrate their HR systems and lifecycle management practices, but also categorize and classify content to address data minimization requirements under modern privacy laws that are driving data clean-up and disposition activities.  

Strong content security to ensure sensitive personal data is protected  

In the wrong hands, employee related/HR data can be dangerous. Organizational focus on content management must incorporate functionality that can mitigate threats associated with data leaks and breaches that can not only result in regulatory or statutory files but lead to private right of actions in certain jurisdictions if employers have failed to provide appropriate and reasonable security measures to protect employee data. For example, having an accurate access control policy with revocable role-based privileges will go far to preventing content from inappropriate exposure – ensuring that only authorized users have access to this sensitive content. Additional capabilities that can help with identifying and detecting early compliance issues include the ability to track:

  • Usage
  • Unusual access activity
  • Downloads
  • Purges
  • Permission changes  

HR compliance issues are hard enough. As organizations are left to decipher the application of new data privacy laws to their business and program activities, they will need to refocus content management activities to support the new obligations imposed by data privacy laws throughout the entire recruitment and employee-related lifecycle.  

Explore how our Employee Document Management Solution can help you manage your HR data and make compliance easier to mitigate risk and financial harm.  

Andy Teichholz

Andy Teichholz is the Sr. Industry Strategist for Compliance and Legal at OpenText. He has over 20 years of experience in the legal and compliance industry as a litigator, in-house counsel, consultant, and technology provider. Andy is focused on helping businesses succeed with digital transformation. In this capacity, he has served as a trusted advisor to customers by leveraging his business acumen, industry experience, and technical knowledge to advise on regulatory compliance, information governance, and data privacy issues as well as support complex litigation and regulatory investigations.

Related Posts

Back to top button