Learn about sensitivity labels

Microsoft 365 licensing guidance for security & compliance.

To get their work done, people in your organization collaborate with others both inside and outside the organization. This means that content no longer stays behind a firewall—it can roam everywhere, across devices, apps, and services. And when it roams, you want it to do so in a secure, protected way that meets your organization's business and compliance policies.

Sensitivity labels from the Microsoft Information Protection framework let you classify and protect your organization's data, while making sure that user productivity and their ability to collaborate isn't hindered.

Example showing available sensitivity labels in Excel, from the Home tab on the Ribbon. In this example, the applied label displays on the status bar:

Sensitivity label on Excel ribbon and status bar

To apply sensitivity labels, users must be signed in with their Microsoft 365 work or school account.

Note

For US Government Community (GCC and GCC-HC) tenants, sensitivity labels are currently supported only for the Azure Information Protection unified labeling client and scanner.

For more information, see the blog post, Announcing General Availability of Unified Labeling in GCC and GCC-H Environments.

You can use sensitivity labels to:

  • Enforce protection settings such as encryption or watermarks on labeled content. For example, your users can apply a Confidential label to a document or email, and that label can encrypt the content and apply a Confidential watermark.

  • Protect content in Office apps across different platforms and devices. For a list of supported apps, see Use sensitivity labels in Office apps.

  • Protect content in third-party apps and services by using Microsoft Cloud App Security. With Cloud App Security, you can detect, classify, label, and protect content in third-party apps and services, such as SalesForce, Box, or DropBox, even if the third-party app or service does not read or support sensitivity labels.

  • Extend sensitivity labels to third-party apps and services. Using the Microsoft Information Protection SDK, third-party apps can read sensitivity labels and apply protection settings.

  • Classify content without using any protection settings. You can also simply assign a classification to content (like a sticker) that persists and roams with the content as it's used and shared. You can use this classification to generate usage reports and see activity data for your sensitive content. Based on this information, you can always choose to apply protection settings later.

In all these cases, sensitivity labels in Microsoft 365 can help you take the right actions on the right content. With sensitivity labels, you can classify data across your organization, and enforce protection settings based on that classification.

What a sensitivity label is

When you assign a sensitivity label to a document or email, it's like a stamp that's applied to content that is:

  • Customizable. You can create categories for different levels of sensitive content in your organization, such as Personal, Public, General, Confidential, and Highly Confidential.

  • Clear text. Because the label is stored in clear text in the content's metadata, third-party apps and services can read it and then apply their own protective actions, if required.

  • Persistent. After you apply a sensitivity label to content, the label is stored in the metadata of that email or document. This means the label roams with the content, including the protection settings, and this data becomes the basis for applying and enforcing policies.

In Office apps, a sensitivity label appears like a tag to users on an email or document.

Each item of content can have a single sensitivity label applied to it. An item can have both a single sensitivity label and a single retention label applied to it.

Sensitivity label applied to an email

What sensitivity labels can do

After a sensitivity label is applied to an email or document, any configured protection settings for that label are enforced on the content. With a sensitivity label, you can:

  • Encrypt email only or both email and documents. You can choose which users or group have permissions to perform which actions and for how long. For example, you can choose to allow users in a specific group in another organization to have permissions to review the content for only seven days after the content is labeled. Alternatively, instead of administrator-defined permissions, you can allow your users to assign permissions to the content when they apply the label.

    For more information about the Encryption settings when you create or edit a sensitivity label, see Restrict access to content by using encryption in sensitivity labels.

  • Mark the content when you use Office apps, by adding watermarks, headers, or footers to email or documents that have the label applied. Watermarks can be applied to documents but not email. Example header and watermark:

    Watermark and header applied to document

    Need to check when content markings are applied? See When Office apps apply content marking and encryption.

    String lengths: Watermarks are limited to 255 characters. Headers and footers are limited to 1024 characters, except in Excel. Excel has a total limit of 255 characters for headers and footers but this limit includes characters that aren't visible, such as formatting codes. If that limit is reached, the string you enter is not displayed in Excel.

  • Protect content in containers such as sites and groups when you enable the capability to use sensitivity labels with Microsoft Teams, Microsoft 365 groups, and SharePoint sites.

    Configuration options for Site and group settings don't display until you enable this capability. Be aware that this label configuration doesn't result in documents being automatically labeled but instead, the label settings protect content by controlling access to the container where documents are stored. These settings include the privacy level, whether a Microsoft 365 group owner can add guests to the group, and the level of access granted to an unmanaged device.

  • Apply the label automatically in Office apps, or recommend a label. You can choose what types of sensitive information that you want labeled, and the label can either be applied automatically, or you can prompt users to apply the label that you recommend. If you recommend a label, the prompt displays whatever text you choose. For example:

    Prompt to assign a required label

    For more information about the Auto-labeling for Office apps settings when you create or edit a sensitivity label, see Apply a sensitivity label to content automatically.

Label priority (order matters)

When you create your sensitivity labels in your admin center, they appear in a list on the Sensitivity tab on the Labels page. In this list, the order of the labels is important because it reflects their priority. You want your most restrictive sensitivity label, such as Highly Confidential, to appear at the bottom of the list, and your least restrictive sensitivity label, such as Public, to appear at the top.

You can apply just one sensitivity label to a document or email. If you set an option that requires your users to provide a justification for changing a label to a lower classification, the order of this list identifies the lower classifications. However, this option does not apply to sublabels.

The ordering of sublabels is used with automatic labeling, though. When you configure labels to be applied automatically or as a recommendation, multiple matches can result for more than one label. To determine the label to apply or recommend, the label ordering is used: The last sensitive label is selected, and then if applicable, the last sublabel.

Option to create a sublabel

Sublabels (grouping labels)

With sublabels, you can group one or more labels below a parent label that a user sees in an Office app. For example, under Confidential, your organization might use several different labels for specific types of that classification. In this example, the parent label Confidential is simply a text label with no protection settings, and because it has sublabels, it can't be applied to content. Instead, users must choose Confidential to view the sublabels, and then they can choose a sublabel to apply to content.

Sublabels are simply a way to present labels to users in logical groups. Sublabels don't inherit any settings from their parent label. When you publish a sublabel for a user, that user can then apply that sublabel to content but can't apply just the parent label.

Don't choose a parent label as the default label, or configure a parent label to be automatically applied (or recommended). If you do, the parent label won't be applied to content.

Example of how sublabels display for users:

Grouped sublabels on the Ribbon

Editing or deleting a sensitivity label

If you delete a sensitivity label from your admin center, the label is not automatically removed from content, and any protection settings continue to be enforced on content that had that label applied.

If you edit a sensitivity label, the version of the label that was applied to content is what's enforced on that content.

What label policies can do

After you create your sensitivity labels, you need to publish them, to make them available to people and services in your organization. The sensitivity labels can then be applied to documents and emails. Unlike retention labels, which are published to locations such as all Exchange mailboxes, sensitivity labels are published to users or groups. Sensitivity labels then appear in Office apps for those users and groups.

With a label policy, you can:

  • Choose which users and groups see the labels. Labels can be published to any specific user or email-enabled security group, distribution group, or Microsoft 365 group (which can have dynamic membership) in Azure AD.

  • Apply a default label to all new documents and email created by the users and groups included in the label policy. This option also applies to containers, if you've enabled sensitivity labels for Microsoft Teams, Microsoft 365 groups, and SharePoint sites. Users can always change the default label if it's not the right label for their document or email.

    Consider using a default label to set a base level of protection settings that you want applied to all your content. However, without user training and other controls, this setting can also result in inaccurate labeling. It's usually not a good idea to select a label that applies encryption as a default label to documents. For example, many organizations need to send and share documents with external users who might not have apps that support the encryption or they might not use an account that can be authorized. For more information about this scenario, see Sharing encrypted documents with external users.

  • Require a justification for changing a label. If a user tries to remove a label or replace it with a label that has a lower-order number, you can require the user provides a justification to perform this action. For example, a user opens a document labeled Confidential (order number 3) and replaces that label with one named Public (order number 1). Currently, the justification reason isn't sent to label analytics for the admin to review. However, the Azure Information Protection unified labeling client sends this information to Azure Information Protection analytics.

    Prompt where users enter a justification

  • Require users to apply a label to their email and documents. Also known as mandatory labeling, you can require that a label must be applied before users can save documents and send emails. The label can be assigned manually by the user, automatically as a result of a condition that you configure, or be assigned by default (the default label option described above). An example prompt shown in Outlook when a user is required to assign a label:

    Prompt in Outlook asking user to apply required label

    Note

    Mandatory labeling currently requires the Azure Information Protection unified labeling client. This client runs only on Windows, so this feature is not yet supported on Mac, iOS, and Android.

    Consider using this option to help increase your labeling coverage. However, without user training, this setting can result in inaccurate labeling. In addition, unless you also set a default label, mandatory labeling can frustrate your users with the frequent prompts.

  • Provide help link to a custom help page. If your users aren't sure what your sensitivity labels mean or how they should be used, you can provide a Learn More URL that appears at the bottom of the Sensitivity label menu in the Office apps:

    Learn more link on Sensitivity button on Ribbon

After you create a label policy that assigns new sensitivity labels to users and groups, users see those labels in their Office apps within 30 minutes. However, allow up to 24 hours for changes to those labels.

There is no limit to the number of sensitivity labels that you can create and publish, with one exception: If the label applies encryption, there is a maximum of 500 labels that you can create. However, as a best practice to lower admin overheads and reduce complexity for your users, try to keep the number of labels to a minimum. Real-world deployments have proved effectiveness to be noticeably reduced when users have more than five main labels or more than five sublabels per main label.

Label policy priority (order matters)

You make your sensitivity labels available to users by publishing them in a sensitivity label policy that appears in a list on the Sensitivity policies tab on the Label policies page. Just like sensitivity labels (see Label priority (order matters)), the order of the sensitivity label policies is important because it reflects their priority. The label policy with lowest priority is shown at the top, and the label policy with the highest priority is shown at the bottom.

A label policy consists of:

  • A set of labels.
  • The scope of the label policy, meaning the users and groups included in the policy.
  • The settings of the label policy described above (default label, justification, mandatory label, and help link).

You can include a user in multiple label policies, and the user will see all the sensitivity labels from those policies. However, a user gets the policy settings from only the label policy with the highest priority.

If you're not seeing the label or label policy setting that you expect for a user or group, and you have waited 30 minutes, check the order of the sensitivity label policies. To reorder the label policies, select a sensitivity label policy > choose the ellipsis on the right > Move down or Move up.

Move option on the page for sensitivity label policies

If you use retention labels in addition to sensitivity labels, it's important to remember that priority matters for sensitivity label policies, but not for retention labels.

Sensitivity labels and Azure Information Protection

If you have deployed labels with Azure Information Protection, use the following sections for guidance before you start to use sensitivity labels.

Azure Information Protection labels

Note

Label management for Azure Information Protection labels in the Azure portal is being deprecated March 31, 2021. Learn more from the official deprecation notice.

If you are using Azure Information Protection labels because your tenant isn't yet on the unified labeling platform, we recommend that you avoid creating sensitivity labels until you activate unified labeling. In this scenario, the labels you see in the Azure portal are Azure Information Protection labels rather than sensitivity labels. These labels can be used by the Azure Information Protection client (classic) on Windows computers, but can't be used by devices running macOS, iOS, or Android. To resolve this, migrate these labels to sensitivity labels.

The metadata applied by both sets of labels are compatible, so you don't need to relabel documents and emails when the migration is complete.

Azure Information Protection clients

When you use sensitivity labels in Microsoft 365 Apps for enterprise apps on Windows computers, you have a choice of using an Azure Information Protection client, or use labeling that's built into Office.

By default, built-in labeling is turned off in these apps when the Azure Information Protection client is installed. For more information, including how to change this default behavior, see Office built-in labeling client and the Azure Information Protection client.

Even when you use built-in labeling in Office apps, you can also use the Azure Information Protection unified labeling client with sensitivity labels for the following:

  • A scanner to discover sensitive information that's stored on-premises, and then optionally, label that content

  • Right-click options in File Explorer for users to apply labels to all file types

  • A viewer to display encrypted files for text, images, or PDF documents

  • A PowerShell module to discover sensitive information in files on premises, and apply or remove labels and encryption from these files.

If you are new to Azure Information Protection, or if you are an existing Azure Information Protection customer that has just migrated your labels, see Choose which labeling client to use for Windows computers from the Azure Information Protection documentation.

Sensitivity labels and Microsoft Cloud App Security

By using Cloud App Security (CAS), you can discover, classify, label, and protect content in third-party services and apps, such as SalesForce, Box, or Dropbox.

Cloud App Security works with both Azure Information Protection labels and sensitivity labels:

  • If the labeling admin centers have one or more sensitivity labels published to at least one user: Sensitivity labels are used.

  • If the labeling admin centers don't have sensitivity labels published: Azure Information Protection labels are used.

For instructions to use Cloud App Security with these labels, see Azure Information Protection integration.

Sensitivity labels and the Microsoft Information Protection SDK

Because a sensitivity label is stored as clear text in the metadata of a document, third-party apps and services can read from and write to this labeling metadata to supplement your labeling deployment. Additionally, software developers can use the Microsoft Information Protection SDK to fully support labeling and encryption capabilities across multiple platforms. To learn more, see the General Availability announcement on the Tech Community blog.

You can also learn about partner solutions that are integrated with Microsoft Information Protection.

Deployment guidance

See Get started with sensitivity labels.