HR Confidentiality – How and Why

The Payroll CompanyHuman Resources

HR has a responsibility – both to the employer and employees. That’s why concerns about potential discrimination or harassment issues need to be balanced with limiting employer liability and guarding against lawsuits. Employees need to know that information will be discussed only with those who have a need to know and whose input is necessary to resolve potential issues, should they arise.

HR maintains confidentiality about health-related data, pay levels, and legal issues like identity theft and data breaches. They also know a great deal about management and business information that’s not available to non-management employees. They know about discussions with senior managers about business strategies and processes, layoffs and plant closings, proprietary data, major expansions, and startups. A human resource professional must be able to strike a balance between preserving employee confidentiality and management’s need to know, with the overall consideration of being fair to all parties.

What about the rest of the staff?  Confidentiality training enables HR to inform team members of the importance of handling sensitive information with discretion. This way, HR keeps its credibility and operational integrity.

What about paper and electronic personnel records? Confidentiality and access controls are critical to the integrity of HR and your organization’s reputation. HR staff is entrusted with private information. Confidentiality breaches result in employees losing trust in the department and questioning HR’s competency.

Then there’s HIPAA — the Health Insurance Portability and Accountability Act, which requires confidentiality of health insurance information. HR best practices recommend that employers create a separate file for health insurance selections, workers’ compensation injury details, accommodations for workers with disabilities, and documents related to absences under the Family and Medical Leave Act.

HR department discussions about employee information should be regulated; staff should refrain from engaging in non-work-related conversations about employees outside the HR department.

Supervisors and managers maintain department files for their employees that contain specific information about performance, attendance, and supervisor notes and feedback. They too need to be maintained in a confidential manner — locked in drawers that only the supervisor has access to.

And when we’re talking workplace investigations, keeping separate files is critical. If a complaint escalates into litigation filed with a government enforcement agency or the courts, discovery means allowing them to inspect materials that could seriously affect the employer’s legal defense.

Avoid unnecessary fines — identify documents that are supposed to be kept confidential, and safeguard this information. Keep it in a secure location. Discard it in proper ways. Restrict access to sensitive data online and in various applications, databases and servers. Create privacy policies in collaboration with the IT department. Not doing so can result in lawsuits.

More questions about establishing office policy or HR best practices? Give us a call, or explore our solutions to discover all the ways that we’re here to help.