Data storage used to be a technical choice. Now it’s a legal one. A compliance one. A strategic one. For European enterprises, where your workforce data lives – and who controls it – can determine your exposure to regulatory fines, legal risk, and operational shutdown.

If you’re still treating data residency as a checkbox in your IT stack, you’re missing the point. Data sovereignty isn’t a setting. It’s a dealbreaker.

What’s really at stake

Workforce data isn’t generic. It’s sensitive. Time records, absences, sick leave, schedules, union activity – it all falls under the GDPR umbrella, and often under special categories of personal data. It’s subject to strict rules on processing, transfer, and retention.

Yet many European companies still rely on US-based cloud vendors to store and process that data. The issue? Even if the data is physically hosted in the EU, if the provider is subject to US law, it can be accessed by US authorities under the CLOUD Act.

As the European Commission clearly states, any transfer of personal data outside the EU must ensure an “essentially equivalent” level of protection. That threshold is hard to meet when legal frameworks conflict – and in this case, they do.

Why Microsoft is in the spotlight

In June 2025, Microsoft’s France legal director confirmed in sworn testimony that they cannot guarantee EU data won’t be accessed by US authorities – even if stored exclusively in the EU. Under the CLOUD Act, US companies must comply with US writs regardless of physical storage location.

This isn’t just a theoretical issue. The European Court of Justice has struck down multiple data transfer frameworks (e.g. Safe Harbor and Privacy Shield) over these concerns. The current Data Privacy Framework is already under legal challenge. That means regulatory protection is uncertain at best.

And while US providers may offer EU-only services or local data centers, they can’t override US law. If your data is under the control of a US entity, it is within reach of US jurisdiction.

For HR, Legal, and IT leaders, this is a crossfire

  • HR needs to comply with GDPR, works council expectations, and employee trust.
  • Legal needs to manage cross-border data transfer risk and demonstrate due diligence.
  • IT needs to reduce complexity, while staying compliant.

The bottom line? Choosing a US provider for time, scheduling, absence, and task data introduces a conflict. One you can’t solve with encryption or contracts. Because compliance isn’t just about where the server is. It’s about who has the keys.

A European-first alternative

Worklinq was built from the ground up to support European compliance standards – not adapt to them. That means:

  • European-owned and operated: No conflict between local laws and foreign jurisdiction.
  • In-region hosting: Choose your data location across certified EU data centers.
  • Full access control: Ensure that only European personnel manage your environment.
  • No legal backdoors: Worklinq is not subject to US surveillance laws.

Data protection isn’t just a feature. It’s foundational.

Don’t wait for a test case

Regulators are watching. Works councils are asking questions. And with the recent public admission by one of the world’s largest cloud providers, there’s no longer any plausible deniability.

The smartest enterprises are re-evaluating their tech stacks now. Not when there’s a breach. Not when there’s a fine. And not when the press calls.

If you’re serious about compliance, privacy, and employee trust – your workforce data deserves a platform that is, too.

Data sovereignty isn’t a technical feature. It’s a business requirement.