Data Privacy, Privacy

Protecting Employee Data: Privacy in Human Resources

June 14, 2025

In today’s digital workplace, protecting employee data is just as critical as securing customer information. Human Resources (HR) departments handle vast volumes of sensitive personal data—from Social Security numbers to biometric identifiers and health records. This data, if mishandled or breached, could lead to legal liabilities, employee mistrust, and reputational harm.

For U.S. companies, particularly those scaling their workforce or adopting HR tech platforms, data privacy in HR is no longer optional—it’s a compliance and ethical mandate. At Curated Privacy LLC, we help businesses design and implement robust employee data privacy programs that go beyond compliance to build organizational trust.

What Counts as Employee Personal Data?

Employee data encompasses any information collected, processed, or stored by an employer about its current, former, or prospective employees. This includes:

Full names and Social Security numbers
Payroll and bank account details
Health-related data (e.g., leave due to illness, benefits info)
Background checks and performance records
Internet and device usage data (in remote/hybrid setups)
Biometric information (e.g., facial scans, fingerprints)

Whether you store this information in cloud HR systems, spreadsheets, or employee files, you are legally responsible for how it’s protected.

Key U.S. Laws Governing Employee Data Privacy

Several state and federal laws now apply directly to employee data, and more are on the horizon. Here’s a breakdown of the most relevant:

California Privacy Rights Act (CPRA)

The California Privacy Rights Act (CPRA), which amends the California Consumer Privacy Act (CCPA), extends consumer-like privacy rights to employees and job applicants as of January 1, 2023. This means:

Employees must be informed of the categories of data being collected
Employers must allow access, correction, or deletion of certain data
Employers are required to disclose how personal data is shared or sold

Illinois Biometric Information Privacy Act (BIPA)

The Biometric Information Privacy Act (BIPA) applies to employers collecting biometric data like retina scans, fingerprints, or facial recognition for things like time-tracking or physical access control. BIPA requires:

Informed written consent from employees
Clear data retention and deletion policies
Prohibition against sharing biometric data without consent

Health Insurance Portability and Accountability Act (HIPAA)

If your organization provides healthcare benefits or handles health-related leave, the Health Insurance Portability and Accountability Act (HIPAA) governs how protected health information (PHI) is stored and transmitted. Even if you’re not a healthcare provider, if your benefits platform handles PHI, you may have compliance obligations.

Common HR Data Privacy Risks

Even well-meaning companies can fall into privacy traps. The most common include:

Lack of Transparency: Not providing employees with adequate privacy notices.
Overcollection of Data: Collecting more personal information than necessary, especially during recruitment or onboarding.
Outdated Systems: Using insecure spreadsheets or legacy software for sensitive data.
Vendor Risks: Partnering with HR tech vendors without evaluating their privacy and security controls.
Lack of Retention Policies: Holding onto old employee data longer than legally or operationally necessary.

Best Practices to Protect Employee Data

To safeguard your HR data, follow these best practices:

Develop a clear employee privacy notice explaining what’s collected and why
Limit data collection to what is necessary for employment purposes
Encrypt and restrict access to sensitive data
Train HR staff on data protection procedures
Evaluate third-party HR vendors for privacy and security compliance
Create a data retention and deletion schedule aligned with legal obligations

How Curated Privacy LLC Can Help

At Curated Privacy LLC, we help businesses protect their greatest asset—their people—by building practical, compliant, and employee-friendly data privacy programs. We offer:

HR Data Privacy Audits – Identify privacy gaps in current HR operations
Privacy Notices and Consent Forms – Custom templates tailored to your business and jurisdiction
Third-Party Risk Assessments – Review of HR platforms and vendors
Training for HR and Management – Ensure every stakeholder knows their role in privacy compliance
Policy Creation and Retention Schedules – Align internal data practices with the latest U.S. laws

Whether you’re a startup or a growing company, we’ll help you turn privacy into a competitive advantage and a culture of trust.

Conclusion: Protecting Employee Data Is Protecting Your Business

As privacy regulations expand, employee data can no longer be treated as an administrative afterthought. Companies that proactively manage HR privacy can avoid costly lawsuits, regulatory scrutiny, and loss of employee goodwill. More importantly, respecting employee privacy helps reinforce a culture of integrity, transparency, and care.