Data Governance Using Labels In Office 365


Many organizations have started using Office 365 for their business purposes. With this now we have many documents being stored all across Office 365. With this, organizations are looking for implementing the governance around their data. The documents should be classified and governance should be carried over as per the classification. Performing all these things manually is next to impossible, as a documents can be anywhere in Office 365 and can be uploaded by any user.

Within an Office 365 tenant, an organization can have different types of content and each type of content requires different actions to be taken on it based on policies of the organization or based on industry rules and regulations.

Labels in Office 365 helps to identify the contents and take an action on it. Using labels we can classify the data all across the Office 365 tenant, classify them for governance and enforce the retention rules on them.

How can the labels be applied

Labels can be applied in the below ways.

Apply label manually

We can enable the users of Office 365 tenant to apply labels manually to their content inside SharePoint, OneDrive, Outlook, and Office 365 groups. Users can manually decide the classification of content inside Office 365 and apply the label.

Apply label automatically

We can set the label on contents when it matches certain conditions.


  • When the content contains sensitive information (available with SharePoint and OneDrive)
  • When content contains the specific keyword (available with SharePoint, OneDrive, Outlook, and Office 365 groups).

Applying labels automatically is always the preferable option because it avoids any manual mistake of the wrong classification of content, but it requires Office 365 Enterprise E5 subscription.

Create Labels in Office 365

  1. Login to Office 365 tenant (
  2. Click App Launcher from the top left corner to open Office 365 Apps.
  3. Click Admin.
    Office 365
  1. Click Admin Centers > Security & Compliance.

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  1. This will open Security & Compliance center ( in a new tab.
  2. Click Classifications > Labels.

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  1. Click "Create a label".

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  1. Enter Name and description for Label.
  2. Click "Next".
  3. The Retention option, if turned on, helps to apply retention settings for the label. This is different than retention policy.

    Office 365

Retain the content

Period for which the content will be preserved.

What do you want to do after this time?

Specify the action to be taken once the content reaches the age.

Label classification

If selected, users will not be able to

    • Change or remove the label
    • Modify or delete the content
  1. Click Next.
  2. Review your label settings.

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  1. Click "Create this label".

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  1. Click 'Publish label".

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  1. Click Next.
  2. Select “All locations” to publish label to all the locations or selectively choose the locations.

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  1. Click Next.
  2. Name your policy.

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  1. Click Next.
  2. Review your settings, click Publish labels.

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It takes up to one day to publish the labels to the selected locations.

Applying Labels to documents in SharePoint

  1. Open the SharePoint site to assign the Office 365 label
  2. We can assign the label to an entire document library or we can selectively apply labels to individual documents.

Apply Labels to Document Library

  1. Open the Document Library.
  2. Open Library settings.

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  1. Click Apply label to items in this list or library.

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  1. Select the label you wish to apply.

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  2. Click "Save".

Apply Labels to Individual Document

  1. Select the document to apply label.
  2. Click Edit all for Properties.

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  3. Select the label to apply.

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  1. Click "Save".

Follow the same process to apply labels to documents in OneDrive.


We can create a label and policy for it (Label policy), then publish it so that user can classify their data. This will help in setting up the governance and enforce retention based on classification.

I hope this helps.