Best Practices for Protecting Sensitive Employee Information 

Nearly one-third of HR managers report that they need better tools for protecting employee data. This data indicates that human resources professionals realize that sensitive employee information is far too exposed. The question is, what can be done about it?

Your organization has to collect and maintain employee data for a variety of reasons, but it’s also responsible for safeguarding that information. Learn practical ways to keep employee data out of the wrong hands and find out how an employer defense lawyer may be able to help. 

Why Employee Data Protection Matters for Employers

Your business collects huge amounts of employee data, including health information, performance evaluations, and Social Security numbers. Your payroll records are an especially ripe target, as they include your employees’ full names, addresses, and account information.

If this sort of information is mishandled or exposed, it can open you up to significant legal liability and regulatory fines.

Partnering with an experienced employer defense lawyer can help your organization develop records management policies that insulate employee information and comply with privacy regulations. Protecting sensitive information is both a compliance issue and a matter of maintaining employee trust.

Types of Sensitive Employee Information Employers Must Protect

Before you can adequately protect employee information, you need to identify what data you’re storing.

Conduct an audit to outline the different categories of confidential information in your database. Common types of employee information HR handles include:

• Social Security numbers and tax data
• Medical and health insurance records for ensure HIPAA compliance
• Payroll and compensation information 
• Background check results
• Disciplinary or performance documentation 

Since these records contain highly personal information, you must ensure that only authorized personnel have access. An employer defense lawyer can help your HR department understand which types of information require enhanced protection and which ones you should limit access to.

Your Legal Responsibilities for Protecting Sensitive Employee Data

California has strict laws requiring employers to protect employee information. The California Consumer Privacy Act (CCPA) places additional responsibilities on your business for data protection and data security.

The first step in adhering to these regulations is to create structured policies and safeguards. Setting up guardrails reduces the risk of data breaches involving critical employee information.

An experienced employer defense lawyer can help you make sense of how these laws apply to your HR records and workplace systems. Once you have a clear view of the risk and your obligations, you can implement more effective strategies for defending employee data.

Limiting Access to Sensitive Information

One of the best ways to protect employee data is by implementing limited access. Only those who genuinely need certain information to carry out their work duties should be able to access it. 

Role-based access controls are the gold standard for limiting information accessibility. You should also enforce two-factor authentication requirements for logins, which decreases the risk of breaches. Additionally, your IT team should regularly audit logins to track data access.

Implementing multiple layers of protection creates redundancy. If bad actors make it past one layer, the next may prevent them from getting at sensitive employee information.

Securing Digital HR Systems for Data Security

Many HR departments rely on digital systems to manage employee data. Pinpoint where employee information lives and any integrations that could create additional exposure points that hackers may exploit. The more systems you use, the wider your risk profile. 

Here are a few ways to fortify your HR systems:

• Encrypt data during transmission and at rest
• Partner with secure cloud storage providers
• Keep your software updated to address weak points
  

Legal counsel can help your organization determine whether its cybersecurity measures meet regulatory expectations. Your employer defense lawyer can also assist with creating response strategies if a data breach occurs. While you can’t take your risk to zero, you can limit the likelihood of a breach with strong defenses and sound policies. 

Training HR on Data Privacy Laws

Policies aren’t enough to protect employee information, you need to also train employees. Your HR team and managers must also understand their responsibilities when handling sensitive data. A comprehensive employee information protection program should cover the following:

• Handling confidential records 
• Securing document-storage procedures
• Recognizing phishing and cybersecurity threats
• Reporting suspected data breaches
• Privacy laws in your state and city

Collaborate with an employer defense lawyer and cybersecurity professionals to create a comprehensive training program. The content needs to be clear, digestible, and engaging to have the intended effect.

Creating Clear Information-Retention Policies

Organizations shouldn’t retain employee records indefinitely, as keeping unnecessary data increases the risk of exposure and complicates data management. Instead, develop a data-retention policy that aligns with California law and industry best practices.

A well-designed regulatory compliance policy will define:

• What records must be kept
• How long records should be stored
• When documents should be destroyed 

Since California and federal retention policies may overlap, you should turn to an employer defense lawyer to promote compliance. Your legal counsel can identify what records must be kept and for how long.

Responding to Employee Data Breaches

Despite your best efforts, data breaches can still occur. When sensitive employee information is exposed, you must act quickly. An effective response plan may include:

• Containing the breach
• Investigating the breach
• Notifying affected individuals 
• Reporting the incident to regulators (if required)
• Implementing stronger cybersecurity controls

Responding to a breach swiftly will allow you to minimize the damage and reduce the risk of regulatory penalties. In the aftermath, look for ways to make your security posture stronger and decrease the likelihood of future breaches. Make sure you have a strong risk management team in place.

Avoiding Legal Risks Associated With Employee Data

Improper handling of employee information can open the door to lawsuits and regulatory enforcement. If a large number of records are impacted, you could also face a class-action claim, with the plaintiffs arguing that you failed to adequately protect sensitive records.

Working with an employer defense lawyer allows you to implement policies and procedures designed to neutralize these risks. Preventive legal guidance costs far less than defending a privacy lawsuit and makes it possible to proactively avoid reputational damage.

Why You Should Seek Legal Guidance 

A California employment lawyer can help you keep the sensitive information your employees have entrusted you with safe. However, you’ll also need to coordinate with your IT and leadership teams. Protecting employee data is everyone’s responsibility. Qualified legal counsel helps you bring those pieces together.