Managing passwords across a team is one of those challenges that seems simple until you try to do it well. Employees reuse passwords, forget to update old ones, and share credentials through Slack messages or shared documents. But these seemingly innocent practices could result in security risks.
A password policy gives your team clear guidelines for creating, storing, and sharing passwords. Combined with the right tools, it turns password security from a headache into an automated process. LastPass helps teams enforce password policies by generating strong passwords and monitoring for weak or reused credentials across your organization.
In this guide, you'll learn how to audit your current practices, define policy requirements, and roll out password security tools that your team will follow.
Quick guide: How to enforce strong password policies in 7 easy steps
- Audit your current password practices by reviewing how your team creates, stores, and shares credentials.
- Define your password policy requirements including minimum length, complexity rules, and update frequency.
- Set up LastPass Business to enforce your password policies automatically across your team.
- Configure role-based access and permissions so employees only see the credentials they need.
- Enable multifactor authentication (MFA) for all users to add an extra layer of protection.
- Train your team on password security best practices so everyone understands the why behind the rules.
- Monitor compliance and review access regularly to catch weak passwords and remove inactive accounts.
How to create and enforce password policies for your team
1. Audit your current password practices
Before you can fix password problems, you need to understand what you're working with. Start by reviewing how your team currently handles credentials. Are employees creating their own passwords? Where are they storing them? How are they sharing access to shared accounts?
Talk to team leads and IT staff to get a clear picture. Look for common issues like passwords stored in spreadsheets, credentials shared through email, or the same password used across multiple tools. You might also check for accounts that still have access after employees have left.
This audit gives you a baseline. You'll know exactly what needs to change and can measure your progress once the new policy is in place.
2. Define your password policy requirements
A good password policy covers the basics without being so complicated that people ignore it. Focus on a few key areas.
For password creation, require a minimum of 12-16 characters. Longer passwords are harder to crack than short ones with random symbols. Encourage passphrases that combine multiple words, like "correct-horse-battery-staple," rather than hard-to-remember strings like "P@55w0rd!".
Decide how you'll handle password rotation. The NIST (National Institute of Standards and Technology) password guidelines now recommend against forcing regular password changes unless there's a known breach. Frequent mandatory changes often lead to weaker passwords, since people make small predictable modifications. Instead, focus on monitoring for compromised credentials.
Document your policy clearly. Write it in plain language and include examples of what good passwords look like. Make it easy for new hires to understand on their first day.
3. Choose a business password manager
A password manager is the backbone of any effective password policy. It removes the burden from employees by generating strong passwords, storing them securely, and filling them in automatically. Without one, your policy becomes a set of rules that people will inevitably work around.
LastPass Business gives you the admin controls you need to enforce policies at scale. You can set minimum password requirements, mandate MFA for vault access, and monitor password health across your organization through the Security Dashboard. It integrates directly with Active Directory, Microsoft Entra ID, Google Workspace, and Okta, so when you add or remove someone from your directory, LastPass updates their access for you.
Sharing is another key consideration. Teams need to share credentials for social media accounts, vendor portals, and other shared resources. LastPass lets you share passwords through encrypted folders with permission controls, so your team can collaborate securely without resorting to copy-paste through chat.
4. Configure role-based access and permissions
Role-based access control (RBAC) limits who can see and use specific passwords based on their job function. Your marketing team doesn't need credentials for production servers, and a junior developer doesn't need access to the company's banking portal. Group employees by department or function, then assign shared folders accordingly. If one account gets compromised, the damage stays contained.
Configure admin permissions carefully. Decide who can add new users, create shared folders, and view security reports. LastPass offers 4 permission levels: users, helpdesk admin, admin, and super admin. Reserve top-level access for IT staff who need to manage the system day-to-day.
5. Enable multifactor authentication (MFA) for all users
Passwords alone can be stolen through phishing or data breaches. Multifactor authentication adds a second verification step, usually a code from an authenticator app or a push notification to a trusted device. Even if an attacker gets someone's password, they can't log in without that second factor.
Make MFA mandatory for accessing your password manager. This is your most critical layer, since it contains the keys to everything else. LastPass supports multiple MFA methods, including the LastPass Authenticator app, Google Authenticator, hardware keys like YubiKey, and biometric options like Windows Hello and Touch ID.
Roll out MFA gradually if needed. Start with high-risk users like admins and executives, then expand to the full team. Offer training sessions so employees understand how to set up their authenticator apps and what to do if they lose access to their device.
6. Train your team on password security best practices
Schedule training sessions that explain the rules and why they matter. When employees understand how reused passwords lead to account takeovers, they're more likely to follow the policy.
Cover the basics in your training. Show people how to use LastPass, including how to generate new passwords, save them, and share credentials with teammates. Explain what phishing looks like and how to report suspicious emails.
Make training ongoing rather than a one-time event. Send quarterly reminders about password hygiene. Celebrate improvements in password health scores. When a major breach hits the news, use it as a teaching moment about why your policies exist.
7. Monitor compliance and review access regularly
Setting up a password policy is just the beginning. You need to track whether people are following it and adjust as your team grows.
The LastPass Security Dashboard shows password health across your organization. You can see which employees have weak or reused passwords, which accounts haven't been accessed in months, and whether everyone has MFA enabled. Review these reports monthly.
Build access reviews into your offboarding process. When someone leaves the company, immediately revoke their access to shared passwords and update any credentials they had access to. This prevents former employees from retaining access to company resources.
Why do password policies fail in some companies?
The biggest reason password policies fail is that they're designed for security, not for people. If following the rules is harder than working around them, employees will find shortcuts.
Long, complex password requirements without a password manager lead to spreadsheets and password reuse. Mandatory 90-day password rotations result in "Password1," "Password2," and "Password3." Policies that require different passwords for every tool but don't give employees a place to store them create chaos.
The solution is to pair your policy with tools that make compliance easy. A password manager removes the memory burden, so employees can use unique, complex passwords without effort. Automated enforcement means the policy applies consistently, without relying on people to remember and follow the rules on their own.
How often should you update your organization's password policy?
Review your password policy at least once a year, and update it whenever your security landscape changes. Triggers for an update include major data breaches, new compliance requirements, changes to your tech stack, or feedback from employees that the current policy isn't working.
Stay current with industry guidelines. The NIST password rotation recommendations changed significantly in recent years, moving away from mandatory periodic changes toward monitoring for compromised credentials. If your policy still requires 90-day password rotations, it may be time to revisit that rule.
Watch for changes in the tools you use. Password managers and identity providers regularly add new features, like passwordless authentication or improved MFA options. Updating your policy to take advantage of these features can improve both security and user experience.
How LastPass helps you enforce password policies across your team
LastPass gives you the admin controls you need to turn password policies from guidelines into automated rules. With over 100 customizable security policies, you can set requirements for password length, complexity, and MFA at the individual, group, or organization level.
The Admin Console offers role-based administration with 4 permission levels: users, helpdesk admin, admin, and super admin. This means you can give IT staff the access they need to manage day-to-day password support without granting full system control. Super Admin privileges give IT leaders full control when urgent situations arise.
LastPass integrates directly with Active Directory, Microsoft Entra ID, Google Workspace, Okta, and OneLogin. When you add or remove someone from your directory, LastPass automatically updates their access. No manual provisioning required.
The Security Dashboard monitors password health across your organization. You'll see alerts for weak, reused, or compromised passwords, with personalized recommendations for each user. Dark web monitoring notifies you if credentials appear in a breach.
Ready to enforce password policies that your team will follow? Try LastPass Business and take control of your organization's password security.
