The law is the Health Insurance Portability and Accountability Act, or HIPAA or HIPPA compliance, which exists to safeguard private health information in the United States. Even though it is a U.S. law, there are some significant implications for U.K.-based organizations, and specifically those that underpin HR systems with U.S. employee data among them or do business on U.S.-cloud-hosted platforms.
Human Resource Information Systems (HRIS) typically record and hold personal health data such as the details of medical leave, health insurance details, and wellness programme details. If any of that information constitutes Protected Health Information (PHI), then HIPAA compliance guidlines must be followed.
With cybersecurity risks rising and privacy expectations increasing in 2025, it is vital that employers’ HR tech does not just efficiently manage data, but also securely manages and processes that data for HIPAA compliance.
This blog post will explore what HIPAA compliance requirements looks like and why it is relevant to HRIS, the key features, the best tools in 2025, and how to avoid expensive mistakes. No business should treat HIPAA compliance as optional – no matter if you are a U.K. business or a global organisation, it is critical.
What Is HIPAA Compliance?
HIPAA (Health Insurance Portability and Accountability Act of 1996) is the rulebook for protecting health data in the U.S. In short: three big sections.
- Privacy Rule: This is the rule about who can see what and when.
- Security Rule: This is the rule about how we make sure the data is securely stored and securely shared.
- Enforcement Rule: This is the rule about what happens to you when you violate the rules; fines, audits, lawsuits.
For any organisation in possession of PHI – whether it’s a clinic or an HR department – this means that you should protect the data, regardless of whether it is in motion or at rest, determine who has access, and train employees. If you are physically in the U.K. serving U.S. employees, or if you have PHI stored on U.S. servers, you are subject to HIPAA’s requirements when working with that data.
HIPAA compliance is not a one-time shot – it is an ongoing practice of doing risk reviews, monitoring, auditing, training, and having business associate agreements (BAA) signed.
As of 2025, the U.S. has proposed some changes (MFA required, encryption enhanced, patient access enhanced, vendor and app scanning) that will have ripple effects through the HR tech space and internationally.
Why HRIS Systems Must Be HIPAA Compliant
HR people deal with employee health information every day – sick notes, benefits, health assessments, and sometimes some FMLA-type forms. Whenever any of that relates to U.S. employees or is stored in the U.S., it all falls under HIPAA regulations.
All of this is serious business. Noncompliance can mean hefty fines, up to $50,000 per violation, and even small organisations can see these stacking up fast to over £1 million in fines for non-compliance over time. Not to mention lawsuits, harm to your company’s reputation, and employee trust being put on the line.
From a security perspective, HR software and HR Management Information Systems often have multiple logging requirements, integrations, and even third-party apps. Without proper controls in place, all that technology can be like managing a cesspit.
Anytime a hacker accesses your HRIS and PHI is stored in it, or if your logs fail to show who accessed what information, there are numerous opportunities for a data loss event due to human error or hackers. You may never even know about it until it’s too late.
HRIS that has implemented a HIPAA-compliant HRIS is not merely making sure they are legal; it’s also good business risk management. It protects a company’s people, the privacy of employee information, and the business.
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Top HIPAA Compliance Features to Look for in HRIS Software
When shopping for HIPAA-safe HRIS in 2025, here’s your Compliance checklist:
- Data encryption both “at rest” (in storage) and “in transit” (internet).
- Secure access via multi-factor authentication (MFA), mandatory under the 2025 HIPAA updates.
- Role-based permissions so only relevant staff can see PHI.
- Audit trails and logs – must track who accessed, changed, or deleted data.
- HIPAA-trained support, which matters for BAAs and incident response.
- Regular security updates and vendor checks, aligning with the new 2025 rules.
- The incident response plan is embedded in the tool, so alerts and breach notifications are swift.
- BAAs are available with cloud/storage and support teams.
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Top HRIS Platforms That Support HIPAA Compliance
Here are today’s top picks for HIPAA-ready HRIS:
- BambooHR: U.K. adoption rising due to intuitive interface. Offers encryption, two-factor authentication, access logs, and strong compliance support via third-party BAAs. Chosen for ease and solid security.
- Gusto: U.S.-based payroll & benefits leader. Now supports HIPAA for U.S. employee data—multi‑state encryption and full audit logging.
- Paycom: Enterprise-level data controls, granular permissions, strong encryption, and vendor certification.
- ADP Workforce Now: Enterprise-ready, BAAs, MFA, encryption both at rest and in transit.
- Zenefits: UK-friendly via add-ons for HIPAA compliance (MFA, audit trails, encryption).
- Heidi Health: U.K.-based telehealth/HR SaaS with ISO 27001, SOC2, and HIPAA compliance: MFA, BAAs, regular audits.
See How Qualysec Helps the U.K. Firms Stay HIPAA Compliant. Contact Now!!
How to Choose the Right HIPAA-Compliant HRIS for Your Business
Selecting a quality HRIS is more than just features; it’s about fit. Here’s how to think through the process:
- Vendor certifications and BAAs: Are they signed and/or audited by an organisation?
- Core feature sets: They should talk about MSFA, role-based access, encryption, periodic audits, etc.
- Data flows: Where is their data stored, and with which jurisdiction is it consistent? Is it in the U.S or the UK? Is it consistent with the U.K. GDPR? How is PHI being exchanged?
- Staff Training and Support: Are staff trained sufficiently in HIPAA? Is the support responsive?
- Induction of risk assessment: Does the vendor actively help you assess and document risk?
- Incident response planning: Does the system have breach response workflows? Who is alerted and notified in the event of an incident?
- Trial and pilot process: Involve your staff in testing the tool on their team to assess usability and security, rather than just what is promised.
- Internal training: No matter how great the tools are, they will ultimately fail if employees are not aware of data and privacy internally.
You may also like: FDA Cybersecurity Guidelines for Medical Devices 2025
Conclusion
HIPPA compliance services isn’t just a legal requirement; it’s also a critical procedure to protect your employees’ most sensitive information. In an era when HR staff are using technology more than ever, it’s important now more important than ever to know that your HRIS is secure and compliant.
Your software choices, access controls, and training are all steps in the process. Given the updated 2025 timeline, being cognizant of HIPAA and in full compliance is crucial to limit risk exposure, including risks associated with data breaches, fines, and reputational harm. If you are a U.K. entity and you process U.S. employee data or have U.S. affiliations, you should comply now.
Need help making sure your HR tech is secure? Qualysec is here to support your journey toward full HIPAA compliance.
Our experts at Qualysec have helped secure fintech, SaaS, and enterprise systems across 25+ countries. Manual + Automated Pentesting. No false positives. Actionable reports.
FAQ’s
1. Which platform is best for HIPAA compliance?
There isn’t a best platform; rather, many platforms exist that can be utilised by your organisation. Examples of highly rated platforms that may help to remain HIPAA compliant are: ADP Workforce Now, BambooHR, and Paycom, as they have strong security features, audit trails, and role-based access control. Regardless of the provider you select, be sure they provide signed Business Associate Agreements (BAAs).
2. In what ways does an HRIS help with compliance management?
HRIS systems aid in the automation of the secure storage, access control, and audit log of sensitive employee health data. HRIS systems provide capabilities to ensure only personnel authorised to access PHI, along with support for encrypted disposal of information, which is in adherence to the requirements of HIPAA privacy and security rules.
3. What is the HIPAA compliance industry?
The HIPAA compliance industry consists of companies that provide software, auditors, cyber firms, and law firms that help organizations with processes, policies, and technology to manage and secure Protected Health Information (PHI) for HIPAA compliance audit. It includes sectors like healthcare, HR technology, and cloud providers.
4. What is the best way to ensure full compliance with HIPAA?
Employ a HIPAA compliant HRIS and conduct regular risk assessments, train your staff, and execute a full response plan. Working with a security expert like Qualysec will help identify areas of deficiency to help with ongoing compliance and provide HIPAA security risk assessment.
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