How Should HR Departments Handle Employee Data Under the DPDPA 2023?

MSInfo Privacy Team

MSInfo Services

February 25, 20256 min read

Employee data is among the most sensitive categories of personal data an organization processes. The DPDPA creates specific obligations that HR teams must understand.

Human Resources departments are among the largest processors of personal data within any organization. From recruitment records and employment contracts to performance reviews, salary information, health data, and family details, HR teams handle an enormous volume of sensitive personal information about employees and candidates. The DPDPA 2023 places this data squarely within its scope — and the implications for HR practice are significant.

The most immediate challenge for HR teams is consent. Under the DPDPA, consent must be specific and informed for each purpose for which data is processed. The employment relationship creates a power imbalance that raises questions about whether employee consent is truly 'free'. The Act recognizes this complexity — certain employment-related processing may fall under legitimate use cases that don't require consent, but the boundaries of these exemptions are not yet fully defined through rules.

Data minimization is a principle that will require HR teams to fundamentally review their data collection practices. The common practice of collecting information 'just in case it's useful later' is not compatible with the DPDPA. Each piece of data collected must be necessary for a specific, defined purpose.

Retention schedules are another area requiring attention. Employee records are currently retained by many organizations indefinitely, or until someone decides to clean them up. The DPDPA requires a defined retention period tied to the purpose for which data was collected — and after that period expires, the data must be deleted. This requires HR systems to have automated retention and deletion workflows, not manual processes.

The right of employees to access their personal data (right to access) and to have data corrected (right to correction) creates new obligations for HR teams to respond to data rights requests within defined timelines. Organizations need processes and designated responsibilities for handling these requests.

MSInfo Services has built a specialized DPDPA compliance product for HR departments that automates consent management, retention scheduling, data rights request handling, and compliance reporting — making DPDPA compliance operationally manageable rather than an additional manual burden.