Most owners and managers of small businesses have learnt to live with the Data Protection Act since 1984.

It only applied to computer records. "Normal" business uses for customer and personnel records were allowed. It was unlikely that the record keeping by small businesses would ever be challenged.

Now all that has changed. The new Data Protection Act came into force on October 24, 1998 and applies to paper records as well as computers.

For employers there is one further and significant new provision - employees now have the right to know what records are kept and see a copy on request.

Some sensitive information about employees can only be held with their consent.

Many employers risk embarrassment or worse if they do not take steps to ensure that the records they keep are accurate and strictly relevant. For new employees it would be sensible to get specific consent to keeping their personal details on file.

The good news is that existing records are exempt until October 2001, so there is plenty of time to take action. Employers must secure their employee records, ensuring that personal details stay confidential, and review all staff records for accuracy and for the inclusion of sensitive information.

However, don't forget that the Act applies immediately to new records. If you are in any doubt about how to deal with this, seek specialist advice now.

Chris Wontner-Smith is a business adviser partner at Grant Thornton in Bradford.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.