GDPR (General Data Protection Regulation)

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Right to rectification of incorrect or outdated records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: