Part of:HR’s role in compliance and tech that can help
12 best practices for HR data compliance across modern HR systems
HR data compliance requires clear access controls, regular audits and coordination from HR, IT and legal teams to protect employee data across systems.
Data breaches can have a devastating effect on a company, potentially leading to negative consequences such as lawsuits and government investigations. Every HR department must take steps to protect employee data, regardless of company size.
Big data breaches are likely top-of-mind for HR leaders, but many compliance failures stem from everyday access issues, such as employees having visibility into confidential data they do not need. HR teams must also understand the employee data privacy laws that apply to their organization and how those rules translate into system access and data handling practices.
The following best practices focus on access control, system configuration and cross-functional oversight to help organizations maintain HR data compliance.
Commonly applicable national, international employee data laws
These laws establish baseline requirements, but day-to-day compliance depends on how employee data is handled within HR systems.
Many countries and areas within them, such as states and provinces, have passed legislation requiring companies to protect their employees' personal data. These laws outline required practices when handling and sharing employee data, such as restrictions on who can see different types of data, acceptable storage methods and rules for data retention.
HR leaders should confirm if any of the following laws affect their organization. Multiple laws might apply to global companies with employees living in more than one country.
General Data Protection Regulation
The GDPR is a regulation developed by the European Union that dictates how companies can collect, use and dispose of personal data in a professional setting. The regulation's definition of personal data encompasses any personal data about an employee.
Under the CPRA, companies must tell workers who live in California about the personal data gathered by the organization and the way that the company is using that information.
Companies must share an alert about their policies on data sharing or sale, data retention and other related policies.
Personal Information Protection and Electronic Documents Act
PIPEDA is Canadian legislation that dictates how private-sector companies can collect, use and share employee data.
One requirement of the act is that organizations must obtain an employee's permission to collect the employee's personal data.
The following video explains how data protection, data privacy and data security differ -- concepts that often overlap in HR compliance discussions.
12 best practices to uphold HR compliance of employee data
HR leaders should make sure their department is following these data compliance best practices.
1. Share data rules with employees
Employee training is one of the most important steps a company can take to ensure HR data compliance, and the education can range from training HR staff members to teaching employees outside HR about compliance.
HR staff overseeing compliance training should consider that employees might have different data training needs. In addition, compiling short guides for workers to refer to when needed could help employees learn about compliance.
HR should schedule follow-up data training every year and consider adding sessions if significant changes are made to laws affecting employee data.
Employee training is one of the most important steps a company can take to ensure HR data compliance.
2. Carry out audits
Regular audits help organizations identify data compliance issues before they become bigger problems.
Data compliance audits might require HR staff to confirm that the compliance training material is still accurate, which is especially critical if laws or employee contracts have recently changed. HR staff should also confirm that employees have completed the necessary data compliance training.
The HR team may also want to audit their HR systems, such as validating log-ins, changes made to employee information and security settings. Since many HR systems provide an audit log that tracks actions taken within the system, this log can be reviewed to identify issues and anomalies.
3. Involve IT and legal if needed
The IT and legal departments can each bring expertise to data protection. Members of the legal department can confirm that the company's training and policies adhere to the laws applicable to the company, and they usually become involved if problems arise or if employees have questions that a member of the legal team must answer.
The legal department might also get involved when the company is buying new software, as members of the legal department might confirm that the vendor's data centers are compliant and review the vendor's data privacy policies.
Of course, IT is also involved when acquiring new systems, and IT staff often confirm that new software upgrades comply with data policies.
4. Encourage secure data sharing
HR staff must emphasize to employees the importance of only sharing information through the proper channels.
Employees must avoid sharing confidential information outside approved systems or with individuals who do not require access to the data.
Organizations that operate in highly confidential industries, such as the military, may require additional data safeguards. Employees in these fields might not be allowed to use USB keys or other devices that could allow them to download confidential information, such as a co-worker's home address.
5. Remove system access for terminated employees
HR staff must work with IT and any other applicable departments to ensure that employees who leave the company lose access to all systems.
Revoking former employees' access to confidential information helps protect the company and eliminates the risk of misuse.
6. Restrict access to confidential data in HR systems
When assigning roles to employees, or developing new roles, the system administrator needs to make sure that the employee receiving the role only has access to the fields and data they require. For example, some employees in HR don't require access to an employee's Social Security number; therefore, the field should not be available.
Also, access to data can be limited to what is required for a person to perform their duties. As an example, an HR team member might only require access to confidential employee data for certain states, but not all employees in the U.S.
7. Mask confidential data
Many HR systems will mask confidential information by default. This can apply to data on screen or in reports. For example, an employee's Social Security number might appear as XXX-XX-#### where the last four digits appear by default, but the first five digits are replaced by an X unless an action is taken to unmask them. Some systems will even use multifactor authentication (MFA) when someone unmasks a confidential field to confirm that the intent is to view the data.
8. Force password changes and MFA
Enforcing strong authentication controls, including multifactor authentication, helps protect confidential employee data from unauthorized access. MFA adds an additional layer of protection against unauthorized access to confidential employee data.
9. Keep virus scanner and anti-malware software up to date
It's important that devices used to access HR systems meet the organization's security requirements to limit unauthorized access. In many companies, the IT department is responsible for installing and maintaining the software and can force updates remotely to maintain compliance. However, if an employee is accessing HR systems from a home computer, they must ensure that the system is properly protected before logging in.
10. Get approval before sharing confidential data
When an employee requests access to confidential information, an established approval process should be in place. These requests might be for reports that contain confidential information or enhanced access to HR systems. The approval might come from the employee's manager or the HR leader, depending on the nature of the request.
11. Avoid using confidential data as a unique identifier
To share data between systems or to use lookups in spreadsheets, HR should use a unique identifier for each employee. This allows each system to know whose data is being updated or requested. The ideal ID to use is the employee ID that is assigned to each employee in the HRIS, since these are unique and don't change. While Social Security numbers are also unique, they are confidential and should only be used for official purposes.
12. Ensure extra protection when traveling
Working with IT, HR should ensure that devices used outside the corporate network meet security requirements, especially when employees access systems remotely. Devices often come with virtual private network or other applications to add a layer of security.
HR data compliance is an ongoing operational responsibility, not a one-time task. As HR systems connect more deeply with IT, finance and third-party platforms, compliance risks increasingly stem from how access is granted, reviewed and adjusted over time.
By prioritizing clear access controls, regular audits and coordination with IT and legal teams, HR leaders can reduce exposure to data breaches and regulatory issues while still enabling employees to do their work. Consistent attention to these fundamentals helps protect sensitive employee data as systems and roles evolve.
Editor's note:This article was updated in January 2026 to improve clarity, flow and the overall reader experience.
Eric St-Jean is an independent consultant with a particular focus on HR technology, project management, and Microsoft Excel training and automation. He writes about numerous business and technology areas.
