Managing Employee Data Under DPDPA
HR Compliance for Small Business Employers
"Employment relationships create unique data processing contexts where consent is not always the appropriate lawful basis."
Employee data processing presents distinct DPDPA challenges for SMEs. The power imbalance in employment relationships complicates consent validity, while HR operations require extensive personal data processing. This guide navigates these complexities.
1Lawful Basis for HR Data Processing
Section 7(e) provides a legitimate use basis for employment-related processing, but boundaries exist.
- Payroll processing: Legitimate use under Section 7(e)
- Performance management: Legitimate use with proportionality
- Background verification: Consent required for non-mandatory checks
- Health data: Explicit consent required (sensitive data)
- Biometric attendance: Explicit consent + purpose limitation
HR Alert: Employee consent obtained under threat of termination or non-hiring is not valid consent under DPDPA. Use legitimate use basis where available.
2Employee Privacy Notice Requirements
Employees are Data Principals entitled to Section 5 notices.
- Timing: Provide notice at onboarding, not buried in employment contract
- Content: All data collected, purposes, retention periods, rights
- Updates: Re-notify when processing purposes change
- Language: Must be in language employee understands
Key Takeaways
Employment processing often qualifies as legitimate use under Section 7(e)
Consent is problematic in employment due to power imbalance
Employee privacy notices are mandatory and must be standalone
Biometric and health data require explicit consent
Retention limits apply—do not keep ex-employee data indefinitely
Statutory References
Get HR Privacy Compliance Toolkit
Get expert guidance tailored to your specific business needs and compliance requirements.
Get in Touch