HR data protection is a core part of compliance for any employer. From job applications and payroll details to medical records and exit interviews, your HR team handles personal data at every stage of the employee lifecycle – much of it sensitive, all of it protected under the UK GDPR and the Data Protection Act 2018.
HR professionals are often required to make quick and careful decisions about how data is stored, shared and used. The risks of getting it wrong range from complaints and reputational damage to fines or legal claims. That’s why you must have the right systems, policies and training in place – and know when to take legal advice.
Our data protection solicitors can support you in navigating your obligations, dealing with challenges as they arise, and developing a practical framework for HR data handling that reflects your legal responsibilities.
Jump to:
- Your legal responsibilities when handling staff data
- Understanding how employee data flows through your business
- Embedding data protection into your contracts and policies
- Providing transparent and compliant staff privacy notices
- Meeting legal requirements for sensitive employee data
- Collecting and storing employee data responsibly
- Reviewing HR data when changing systems
- Managing workplace monitoring lawfully
- Responding to subject access and data rights requests
- Using data protection impact assessments in HR
- Training staff on data protection responsibilities
- Taking a practical approach to HR data compliance
- Getting HR data protection right
Your legal responsibilities when handling staff data
You can’t ignore your data protection duties – they’re mandatory under UK data protection law. It’s likely your HR team handles personal data daily. But under the UK GDPR and the Data Protection Act 2018, you must actively demonstrate your compliance with legal rules.
An employer typically acts as a data controller in almost all HR-related activities, collecting and processing personal data about staff and controlling the decisions regarding how the data is used. Where an employer acts as a processor, separate considerations apply.
Your data protection law obligations will cover any data you process about your employees, contractors, consultants, applicants and candidates (not just employees on the payroll). You’ll need to understand the full lifecycle of that data (from initial collection to transfer and deletion) to make sure you handle it lawfully and in line with data protection law rules.
You’ll also need to remember the concept of data protection by design and by default approach (prioritising the protection of staff data from the get-go) and demonstrate your accountability – e.g. by maintaining policies, procedures, staff training and up-to-date records of processing activities where required.
Some activities which may feel common for HR will also give rise to highly complex risks and issues from a data protection law standpoint. For instance, when you’re using AI tools to screen candidates or process criminal offence data (such as carrying out criminal record checks during recruitment). These issues give rise to significant compliance risks and additional legal steps under data protection laws, so it’s vital always to take a step back and think about compliance before you engage in any such activities and take legal advice if you’re unsure.
Understanding how employee data flows through your business
You must know how personal data flows through your business, systems and to third parties. This includes considering data transfers to third-party providers and international transfers. In HR, you may share data with third parties, e.g. payroll providers, cloud hosting companies, and outsourced IT support. There are strict rules to consider when you’re sharing staff data externally, especially contracts.
You need to determine whether a third-party provider you share staff data with is acting as a processor or a controller. If they’re a processor, you must include the mandatory Article 28 UK GDPR terms in your contract.
If they’re a controller, you should put in place a data sharing agreement setting out data protection law responsibilities. If your HR system or services use international cloud platforms or overseas support teams, extra rules apply. When you’re transferring any staff personal data to countries outside of the UK, strict international data transfer law rules will also apply.
Embedding data protection into your contracts and policies
Your staff employment contracts and any HR policies (e.g. those in the staff handbook relating to data protection) must be tailored to reflect how your business uses personal data in practice. Older templates often rely on employee consent, but this consent is rarely valid due to the current imbalance of power in employment. You must be cautious when using this wording in an employment context. General and broad clauses about employee consent are now problematic under UK GDPR, so employers now commonly explain that data processing of staff data is carried out following their staff privacy notice.
You also need to be careful not to include clauses which waive employee data protection rights, as they’re unlikely to be enforceable.
Providing transparent and compliant staff privacy notices
Staff need to know what personal data you collect, why you use it, with whom you share it, and how long you retain it. You must explain this clearly and up front in a staff-facing privacy notice or policy. You need to provide a staff privacy notice that’s accurate, accessible and reviewed regularly. It should include key issues such as your lawful basis for processing, details of any international transfers of staff data and how you handle special category data. You must update your privacy notice whenever your data practices change.
Meeting legal requirements for sensitive employee data
When handling special categories of data (like health or trade union membership), you must meet stricter legal rules. This includes the need to identify both a lawful basis under Article 6 and a condition under Article 9 of the UK GDPR. This can come up regularly in the employment context, e.g. where you receive health data from staff or use biometrics for access control.
Collecting and storing employee data responsibly
You must only keep personal data for as long as it’s needed. This is a legal requirement under the UK GDPR’s data minimisation and storage limitation principles. You must define retention periods for each type of HR data - you can’t keep data just in case. Review your records regularly and delete any data you no longer need. A data retention policy and schedule can help you justify and classify how long you keep HR data and give your business rules to follow when handling staff information.
Reviewing HR data when changing systems
When moving to a new HR system, you should assess what data you already hold. Transferring outdated or unnecessary data adds legal and security risks. You should delete irrelevant data before migration and appoint someone to manage the transfer in line with your retention schedule.
Managing workplace monitoring lawfully
You must balance staff monitoring with their right to privacy. While you may feel that monitoring your staff is necessary, strict legal rules apply that your business must follow.
Responding to subject access and data rights requests
Your staff can request access to their data by making a subject access request. You must respond within one month unless you can lawfully extend the deadline or a valid exemption applies.
Staff also have rights to rectification, erasure, restriction, objection and data portability. You need processes and policies in place to deal with these rights appropriately, but some rights aren’t absolute, so make sure you assess each request on a case-by-case basis carefully. Our Ask the expert article covers some common questions and issues if you’ve received a subject access request.
Using data protection impact assessments in HR
You must carry out a data protection impact assessment if processing is likely to result in a high risk to staff, for example, using AI in recruitment or monitoring health data.
Training staff on data protection responsibilities
You must train HR and other staff on handling personal data correctly. Your training should reflect the risks involved and be refreshed regularly. You’ll need to keep training records and update content whenever your legal duties or internal policies change.
Taking a practical approach to HR data compliance
There’s no one-size-fits-all approach when it comes to compliance with strict data protection law rules. Every business is different and will use staff data in other ways, too, meaning the challenges they’ll face will differ.
Your business needs to assess the types of data it processes and the associated risks to effectively tackle them. Small companies with small teams may face different risks than large employers with thousands of employees worldwide.
Regardless of the size of your teams, never treat data protection as a tick-box exercise; instead, work hard to build a culture of accountability, transparency and genuine respect for data privacy rights. Remember to maintain compliance consistently. For example, review your policies regularly, update your processes to comply with any changes in data protection laws, and seek legal advice when needed.
It’s wise to plan and establish robust data protection processes. You know how to handle these common data protection challenges, and you don’t slip on your core obligations. Your business could face several risks if you get data protection wrong. For instance, a complaint could lead to an ICO investigation, and you could face fines, or an employee could bring a compensation claim against your business or spread word that you don’t respect privacy rights, tarnishing your reputation. As such, it’s vital to invest time in getting this right.
Getting HR data protection right
There’s no one-size-fits-all approach to managing HR data. Every business will face its own unique set of challenges, depending on the size of its workforce, the type of data it processes, and the systems it utilises. But the key is to treat data protection as an ongoing responsibility, not a tick-box exercise.
Take the time to review your policies, train your staff, and assess the risks associated with any new processing activities. If you're unsure how the rules apply in practice – whether you're handling a complex subject access request, updating privacy notices or planning a new HR system – taking legal advice early can help avoid bigger problems down the line.
Our data protection solicitors and employment law solicitors work closely with HR teams to help them manage data properly, meet their legal duties, and handle issues with confidence.
