Microsoft 365 · What's changing

New data-protection features are coming to your Microsoft 365

A friendly guide to the new Sensitivity button in Word, Excel, PowerPoint and Outlook — and what happens when you label a file or email.

TL;DR — Your IT team is turning on Microsoft's standard data-protection features. You'll see a new Sensitivity button in Office apps. For the first 30 days nothing is blocked — IT is just watching. After 30 days, files and emails labelled Confidential or Highly Confidential can no longer be shared with people outside the company. General and Public work as normal — no change to your day-to-day inbox.

1 The rollout, in three phases

Most of the changes don't actually block anything until Day 30. Until then, everything still works exactly as it does today.

Day 1 · Labels arrive

You see a new Sensitivity button

Word, Excel, PowerPoint and Outlook get a Sensitivity button. New emails default to General. New documents default to Confidential — All Employees. Nothing is blocked.

Day 1–30 · Quiet monitoring

IT watches, you keep working

Microsoft Purview is in simulation mode. You won't be blocked from anything, no pop-ups, no policy tips. IT collects telemetry on what would have been blocked so they can tune the rules.

Day 30+ · Enforcement

Sharing rules switch on

If you try to send or share Confidential or Highly Confidential content externally, you'll see a banner explaining the block. Internal sharing keeps working normally.

2 The four labels you'll actually pick

Your IT may publish more labels later (e.g. sub-labels for specific people), but these four cover almost everything you do day-to-day. The colored dot beside each label matches the color you'll see in the Sensitivity button in Word, Excel, PowerPoint and Outlook.

PublicNo protection

Use for marketing material, press releases — anything explicitly approved for the world to see.

Nothing is added to the file or email.

General — Anyone (unrestricted)No protection

Routine internal email and documents you might share with trusted external partners (vendors, customers under NDA).

Nothing is added to the file or email.

Default for new emails
Confidential — All EmployeesFooter marking

Internal-only content: contracts, plans, customer data, anything regulated.

A footer "Classified as Confidential" may appear; external sharing is blocked after Day 30.

Default for new documents
Highly Confidential — All EmployeesEncrypted

Source code, pre-announce financials, employee PII, payroll, M&A.

File is encrypted — only people in our organisation can open it. Watermark "HIGHLY CONFIDENTIAL" and footer added. External sharing blocked after Day 30. Microsoft 365 Copilot will not summarise or ground on these files.

3 What it looks like in your apps

Three things start showing up in Office, Outlook and SharePoint. Here's a preview so it isn't a surprise.

Word · New document
Home  |  Insert  |  Layout  |  ...
🔒 Sensitivity: Confidential — All Employees ▼
Click the button to change the label. New documents start at Confidential — All Employees by default.
Outlook · Composing a message
To: someone@partner.com
Subject: Q4 board pack
⚠️ Policy tip: This message contains content labelled Confidential. After the monitoring period it cannot be sent to external recipients.
The tip appears before you click Send so you can correct course.
Excel · Highly Confidential workbook
🔒 Sensitivity: Highly Confidential ▼
HIGHLY CONFIDENTIAL
Encrypted. Only people in our organisation can open this file. If it ends up on a USB or personal Gmail, it cannot be read.
SharePoint · Share dialog
Share budget-2026.xlsx
To: guest@external.com
🚫 Blocked — This file contains Confidential content that cannot be shared outside our organisation. Contact the helpdesk if there is a business need.
Internal share — same file, same person inside the company — works as normal.

4 How to pick (or change) a label

Labels live on a single Sensitivity button at the top of every Office app. Picking one takes about three seconds.

To set or change the label

  1. Open the file in Word / Excel / PowerPoint, or open a new email in Outlook.
  2. Click the Sensitivity button on the ribbon (top-right area).
  3. Pick the right label. The visible marking (footer, watermark) updates immediately. Save to persist.

If you need to lower the sensitivity (e.g. share externally)

  1. Click Sensitivity, pick the lower label (e.g. General or Public).
  2. Office will prompt you for a brief justification — type a short sentence (e.g. "Approved for external release.").
  3. Click OK. The change is logged for audit but no one has to approve it — you continue working straight away.
Good to know. Old documents and emails are not relabelled automatically — the default only applies to new content. Existing files keep whatever label (or no label) they have today.

5 What gets blocked after Day 30 — and what doesn't

Only externally addressed shares of Confidential or Highly Confidential content are blocked. Everything else works as normal.

🚫 Blocked
Outlook · Email a Confidential file to external.com / a partner

A yellow banner explains the block. Click Send and the message is stopped. The file owner and site admin are notified.

✅ Allowed
Outlook · Email the same file to a colleague inside the company

Internal email flows normally. The footer marking is preserved.

🚫 Blocked
SharePoint / OneDrive · Share a Confidential file with an external guest or anonymous link

The Share dialog blocks the action with a message. Internal sharing remains available.

✅ Allowed
Anything labelled General or Public

Routine work email and public material flow normally. No tip, no block, no change.

🚫 Blocked
Anyone outside the company who somehow receives a Highly Confidential file

The file is encrypted — it can't be opened without a Microsoft 365 identity in our organisation.

✅ Allowed
Inside the company — view, edit, save, reply, reply-all, forward

Every employee can collaborate on encrypted files inside the organisation. Co-authoring may be limited if IT chose the conservative profile — ask helpdesk if you hit a co-author issue.

Can I override a block myself? No — not in the default setup. If you have a legitimate business need (e.g. sharing a labelled contract with the customer it relates to), contact the helpdesk. They can adjust the rule or share the file through an approved channel.

6 Microsoft 365 Copilot — what changes

If your tenant has Microsoft 365 Copilot, one extra rule applies.

Copilot will ignore Highly Confidential files. When you ask Copilot to summarise, find or ground on something, anything labelled Highly Confidential is excluded from the answer — even if you personally have read access to it. This is intentional, to keep the most sensitive content out of AI prompts and responses.

Workaround. If you legitimately need Copilot to read the content, either relabel the file to Confidential — All Employees (with downgrade justification, if the content allows it) or open and summarise the file yourself.

7 Email retention — what happens to old mail

If your IT team enabled the optional 7-year retention policy:

Need to keep something longer? Move it out of your mailbox — save the email as a .msg or .pdf in a SharePoint library, move the file into a team site, or ask IT for a longer retention policy on your team's mailbox.

8 Cheat sheet

Print this section or pin it on your desktop — it covers 95% of day-to-day questions.

📝Picking a label

  • Public material → Public
  • Internal & trusted partners → General
  • Contracts, customer data → Confidential
  • Payroll, source, M&A → Highly Confidential

↓️Lowering a label

  • Click Sensitivity
  • Pick lower label
  • Type a one-line reason
  • Continue working

🚫If you're blocked

  • Read the banner — it tells you why
  • If valid, relabel to a lower level
  • If you can't, contact helpdesk
  • Don't keep retrying — logs build up

📱On mobile / Mac / web

  • Outlook mobile — full support
  • Office for Mac / iPad — full support
  • Office on the web — full support
  • 3rd-party apps — may struggle with encrypted files

🏠Working from home

  • Labels & DLP work anywhere — they're tied to your account, not the office network
  • Open an encrypted file online at least once every 30 days

💬Need help?

  • "Should this be labelled higher?" → ask your manager or helpdesk
  • Stuck on a block → helpdesk
  • Co-author issue on an encrypted file → helpdesk

9 Frequently asked questions

Will my old documents and emails suddenly be labelled?

No. Existing content is not relabelled automatically. The default only applies to new content created after the rollout. You can choose to label old content manually.

Will I be unable to send any external email?

No. Only emails you have explicitly labelled Confidential or Highly Confidential are blocked externally. Routine General email flows normally — this is the majority of what you send.

I attached a Confidential file to an email that was labelled General — why did the email's label change on its own?

This is expected: "inherit label from attachments" is on by default. If an attachment carries a higher-priority label than the email, Outlook silently upgrades the email's label to match before it's sent — no prompt, no action needed from you. It's a safety net so a sensitive attachment can't leave under a lower-sensitivity email label.

My document auto-got Confidential — All Employees, but I need to share it externally. What do I do?

Open the document, click Sensitivity → General (or Public), provide a brief justification when prompted, then share normally.

Will labels and DLP work outside the office, on my home laptop?

Yes — the protections are tied to your Microsoft 365 identity, not the office network. They follow you wherever you sign in to Office.

Will labels work on my phone (Outlook mobile)?

Yes. Outlook mobile (iOS and Android) supports applying and viewing sensitivity labels.

Will a labelled file open on a Mac, iPad, or the web?

Yes for Office apps (Word/Excel/PowerPoint/Outlook on Mac, iOS, Android and the web). Third-party apps that don't understand Microsoft Information Protection may struggle with encrypted (Highly Confidential) files.

What happens if I email a labelled doc to a personal Gmail / Hotmail?

After Day 30, blocked. During the first 30-day monitoring window, allowed but logged.

I deleted an email less than 7 years old — is it really gone?

No — under a retention policy, items "deleted" by you are kept in a hidden recoverable-items area until the 7-year mark. After 7 years they're hard-deleted.

How do labels affect Teams chat?

Files shared in Teams chat live in OneDrive and inherit the same DLP rules as direct OneDrive shares. So a Confidential file dropped into a Teams chat with an external guest will be blocked the same way as a direct external share.

When I create a new Team, Group or SharePoint site, I'm asked to pick a sensitivity. Which one?

You'll see three choices — General, Confidential — All Employees, and Highly Confidential — All Employees. Pick the one that matches the most sensitive content you expect to keep in that workspace. Most everyday team sites are General. Use Confidential — All Employees for sites with employee or customer PII, financials, or contracts. Use Highly Confidential — All Employees for source code, M&A material, or anything regulated. You can change it later if you guess wrong.

Who can I ask if a file should be labelled higher or lower?

Your manager or the helpdesk. As a rule of thumb: if it contains employee or customer PII, financials, source code, contracts, or anything regulated — use Confidential or higher.

I opened a Highly Confidential file at the weekend and now it won't open. Why?

Encrypted files re-check your access every 30 days. If you're offline for longer than that, the file locks until you reconnect. Sign in once on a connected device and you're back in.

What's NOT covered in this guide?

This guide describes only what the Microsoft Purview baseline deploys. Your IT team may layer additional controls (Conditional Access, device compliance, MFA, mailbox auto-forward blocks, external-link expiry, etc.). If you encounter behaviour that's not described here, it's likely one of those — start with the helpdesk.

10 Learn more (Microsoft Learn)

Official Microsoft documentation if you want to dig deeper.