THE BURDEN OF VERIFICATION: NAVIGATING EMPLOYEE BACKGROUND CHECKS AND DATA MINIMISATION UNDER THE DPDP FRAMEWORK

The necessity of background verification in the corporate management has brought significant friction between itself and the strict statutory regimes regarding privacy due to the enactment of Digital Personal Data Protection (DPDP) Act, 2023 in India. On one hand, the DPDP Act allows the employee data to be processed for employment purposes, yet early erasure of the employees’ background verification data due to the Act’s statutory mandates exposes the employers to the liabilities of wrongful terminations and lack of evidence for the same under the Industrial Disputes Act, 1947. On the other hand, indefinite retention of the employees’ background verification data risks regulatory penalties. This article analyses the legal friction between the Indian labour jurisprudence, and the DPDP Act’s data minimisation principles. This article also proposes a 'Tiered Retention Framework' with the help of a comparative benchmark from the European Union's General Data Protection Regulation (GDPR) and corresponding jurisprudence. By bifurcation of the lifecycle of the employee’s data, employers can implement privacy-by-design data handling processes while complying with labour law.