Why is confidentiality critical to human resources?

Human resource professionals must understand the importance of maintaining the confidentiality of sensitive employee information, including Social Security numbers, performance reviews, workplace injury reports, background checks, health-related information, pay levels, etc. Legal obligations, such as data-breach notification requirements and privacy laws (e.g., the Health Insurance Portability and Accountability Act, or HIPAA), require employers to establish processes and procedures to secure and safeguard sensitive employee data and notify employees of any breach of this confidential information.

In addition to protecting sensitive employee information, HR must maintain confidentiality about management or business information that is not available to nonmanagement employees or outsiders. Such information could include changing business strategies and processes, layoffs or plant closings, and proprietary data.

Confidentiality is also critical in situations such as workplace investigations or performance and disciplinary actions. Maintaining confidentiality can be particularly challenging when certain information has to be divulged to others so that all involved parties can be heard and all pertinent information can be evaluated. In the case of a workplace investigation, an HR professional must be able to strike a balance between preserving employee confidentiality and completing a thorough investigation that is fair to all parties.

It is not uncommon for an employee to present a workplace complaint but ask that no action be taken or that his or her name not be disclosed as the complainant. Although it is important to consider the employee's request, HR should not always promise confidentiality because of the responsibility to the employer to fully investigate employee complaints, especially if the concerns involve alleged discrimination, harassment or other legal issues. Disclosing important information to investigate a complaint can be critical in limiting employer liability and guarding against lawsuits. In these circumstances, HR can explain its obligation to fully investigate the concerns—not only for the benefit of the employee, but also for others who may be experiencing the same problem—while ensuring the employee that the information will be shared only with those who need to know and whose input is necessary to resolve the issue.

Public-sector employers may be subject to open-record/freedom-of-information laws that can impact the confidentiality of agency records. If you work for a public agency that is subject to these laws, consult your state's specific legislation.