What Is GDPR (General Data Protection Regulation)?

The General Data Protection Regulation (GDPR) is the European Union’s comprehensive privacy law that governs how organizations collect, process, store, and transfer personal data of individuals residing in the EU or EEA. In effect since May 2018, it applies extraterritorially—meaning any company worldwide must comply if it handles EU-based personal data. For employers, this includes everything from payroll processing and HR files to benefit administration and recruitment systems. 

GDPR gives individuals enhanced rights over their data and places strict responsibilities on businesses to manage employee and candidate information lawfully, transparently, and securely. Non-compliance can lead to severe financial penalties and reputational damage. 

Why Should Employers Outside the EU Care About GDPR? 

Even if your company is not physically located in the EU, you are legally bound to comply with GDPR if you employ EU residents or collect their data for recruitment or employment purposes. This includes: 

  • Sending job offers to EU candidates 
  • Managing payroll or benefits for remote EU-based staff 
  • Conducting interviews or onboarding via global platforms 

Global employers must ensure lawful data transfer mechanisms (such as Standard Contractual Clauses) are in place when moving employee data outside the EU. 

 

Which Types of Employee Data Are Protected Under GDPR? 

Under GDPR, “personal data” includes any information that can directly or indirectly identify a person. In an HR or payroll context, this typically includes: 

  • Name, address, phone number, and email 
  • Salary details, tax records, and banking information 
  • Government-issued IDs (e.g., passport, national insurance number) 
  • Recruitment records, job applications, and interview feedback 
  • Biometric or health-related data 

Data concerning race, religion, or union membership are classified as special category data, requiring even stronger protection. 

 

What Rights Do Employees Have Under GDPR? 

Employees covered by GDPR are granted several rights, including: 

  • Right to access their personal data 
  • Right to rectification of incorrect or outdated records 
  • Right to erasure (“right to be forgotten”) 
  • Right to restrict or object to certain types of data processing 
  • Right to data portability—to receive their data in a structured, machine-readable format 

Employers must have systems in place to honor these rights promptly, often within strict timelines. 

 

What Are Common Mistakes Employers Make with GDPR? 

  • Collecting more data than necessary during hiring or onboarding 
  • Storing outdated or unnecessary employee information 
  • Sharing employee data with third parties without valid legal basis 
  • Failing to notify employees about how their data is used 
  • Not reporting data breaches to authorities within 72 hours 

Each misstep can expose the company to compliance violations and potential lawsuits. 

 

How Does GDPR Impact Payroll and HR Software? 

Any HR or payroll tool used by a company to manage EU-based staff must be GDPR-compliant. This includes: 

  • Role-based access controls for sensitive records 
  • Data encryption both at rest and in transit 
  • Audit trails and consent logs 
  • Hosting on secure, compliant servers 

Employers are advised to conduct regular Data Protection Impact Assessments (DPIAs) before implementing such tools. 

 What Can Global Employers Do to Stay GDPR-Compliant? 

  • Appoint a Data Protection Officer (DPO) if required 
  • Limit data access to only those who need it 
  • Maintain up-to-date data processing registers 
  • Train HR and payroll teams on data handling protocols 
  • Ensure contracts with vendors include GDPR-compliant clauses 

Most importantly, integrate privacy-by-design into all employment lifecycle activities. 

 

How Does TopSource Worldwide Help You Stay Compliant? 

TopSource Worldwide integrates GDPR compliance into every global employment solution we offer—from secure payroll systems and compliant contract management to cross-border data processing. Our team supports: 

  • EU-compliant onboarding and documentation 
  • Employee data audits and breach response readiness 
  • Legal review of contracts and third-party processors 
  • Seamless global employment without compromising privacy 

Partnering with us means building trust with your workforce—and regulators—while confidently scaling across borders. 

 

Ready to become a true global employer? Talk to our team about global payroll services today.

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