10 min Reading Time<\/p>\n
Last updated: March 2026 | Originally published: 2021<\/p>\n
As of January 2027, digital payroll records become mandatory. At the same time, German data protection authorities are imposing record-breaking fines – \u20ac900,000 alone for retaining data beyond legally permitted periods. Companies still managing personnel files using 2020-era practices risk not only non-compliance but also personal liability for managing directors under NIS2.<\/b><\/p>\n Personnel files were long considered purely an HR matter. That has fundamentally changed. Three developments compel companies to rethink how they handle employee data: the upcoming digital payroll record mandate in 2027, intensified enforcement by data protection authorities, and the NIS2 reporting obligations<\/a>, which – for the first time – bring HR systems squarely within the scope of cybersecurity regulation.<\/p>\n The reason? Personnel files constitute one of the most valuable data collections within any organization. They contain bank account details, tax identification numbers, health data, and performance evaluations – more than enough material to fuel identity theft, extortion, or highly targeted social engineering attacks against executives.<\/p>\n Hopes for a dedicated Employee Data Act have been dashed. In October 2024, the German Federal Ministry of Labour and Social Affairs published a draft bill intended to define clear rules for applicant data, workplace health monitoring, and AI-supported personnel decisions. Following the coalition collapse on 6 November 2024, the draft never reached Parliament. The current CDU\/CSU-SPD coalition agreement makes no mention of the topic.<\/p>\n Practically speaking, this means \u00a7 26 BDSG remains the sole national opening clause under the GDPR<\/a> governing employee data protection. A provision even data protection lawyers describe as \u201cthin,\u201d since it essentially permits processing employee data only to the extent necessary for the employment relationship.<\/p>\n In contrast, GDPR enforcement in Germany has noticeably tightened. The DLA Piper study from January 2025 documents \u20ac1.2 billion in fines across Europe for 2024. Within Germany itself, 266 proceedings resulted in a total of \u20ac2.5 million in fines. The highest individual fine stood at \u20ac900,000 – imposed on a service provider that stored data five years beyond its legal retention period without any lawful basis.<\/p>\n \n \u201cThe Hamburg data protection authority launched twice as many fine proceedings in 2024 as it did in the entire previous year. Saxony\u2019s authority reached the full-year 2023 level already in the first half of 2024.\u201d Case One: A cultural institution systematically documented employees\u2019 health status and their interest in forming a works council – intending to ease probationary dismissals. The data protection authority imposed a \u20ac215,000 fine for violating Article 9 GDPR (processing of special categories of data) and \u00a7 26 BDSG.<\/p>\n Case Two: Covert video surveillance of three interns via cameras hidden inside power sockets – without the subjects\u2019 knowledge or any legal basis. Fine: \u20ac4,000. While the direct financial damage was minor, the reputational harm to the company was substantial.<\/p>\n Both cases demonstrate: Authorities examine not only technical safeguards but also the intent<\/em> behind data processing. Companies misusing personnel files as instruments against employees pay multiple times over.<\/p>\n There is no uniform statutory retention period for \u201cthe personnel file.\u201d Different documents fall under different retention requirements – and this is one of the most common compliance errors. A \u20ac900,000 fine for excessive storage illustrates where blanket \u201cwe keep everything for ten years\u201d policies lead.<\/p>\nTL;DR<\/h2>\n
\n
Why Personnel Files Are a Strategic Security Issue in 2026<\/h2>\n
Legal Framework in 2026: What Applies – and What Failed<\/h2>\n
\n
\n – Summary of enforcement trends (security-insider.de, 2024)<\/cite>\n<\/p>\n<\/blockquote>\nTwo Cases Every Company Should Know<\/h2>\n
Retention Periods: The Table Every HR Department Needs<\/h2>\n