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Spying On Your Employees? Better Understand the Law First

Andreas Rivera
Andreas Rivera

From eliminating distractions to adding technological automation, there are numerous ways businesses can improve workplace productivity. One such method is the use of surveillance and tracking methods.

Using video surveillance strengthens your business's security measures and productivity. Catching a thief on camera reduces shrinkage costs. Employee tracking and monitoring systems serve other important purposes. The main goals behind employee monitoring are to prevent internal theft, examine employee productivity, ensure company resources are being appropriately used and to provide evidence for any litigation. Time and attendance systems give your business a record of when employees work and take paid time off (PTO). This can be valuable should a dispute over hours or vacation time ever become a lawsuit. [Interested in a time and attendance system? Check out our best picks.]

Beyond simple video surveillance in the workplace, employers can install monitoring software on company computers, and GPS fleet-tracking tech can be installed on company vehicles. Some business owners may not know how far they can or should extend their authority to monitor employee activity.

Federal and most state privacy laws give discretion to employers as to how far they can go with their employee monitoring program. In some cases, employers do not have to inform employees they are being monitored, but this depends on state and local laws. Some regulations require employee consent.

"As a general rule, employees have little expectation of privacy while on company grounds or using company equipment, including company computers or vehicles," said Matt C. Pinsker, adjunct professor of homeland security and criminal justice at Virginia Commonwealth University.

Monitoring must be within reason. For example, video surveillance can be conducted in common areas and entrances; however, surveillance in bathrooms or locker rooms is strictly prohibited and opens a company up to legal repercussions.

Video surveillance doesn't need to be explicitly disclosed to employees and agreed to by your workforce. However, visible signage stating that the premises are monitored by security cameras can be enough to cover legal and ethical grounds. Also, just the knowledge that cameras are monitoring everything is enough to prevent internal theft by employees.


Another issue arises when retaining any recordings, especially of meetings. If you record meetings with employees, especially ones dealing with discipline or HR-related issues, you may be legally obligated to keep those recordings and turn them over to a court if litigation arises. [Interested in using a video surveillance system? Check out our best picks.]

Transparency is always a good practice. Since many employees may feel uncomfortable being monitored, it's important to be forthcoming about what you hope to accomplish and how surveillance aligns with your business's goals. According to a survey conducted by Dtex Systems, "77 percent of employed Americans would be less concerned with their employer monitoring their digital activity on personal or work-issued devices they use to conduct work, as long as they are transparent about it and let them know up front."

In fact, transparency can make employees more willing to subject themselves to different methods of monitoring and tracking. Approximately 50 of 80 employees at technology company Three Square Market voluntarily had microchips implanted in them. The chips allow the employees to enter the building and buy lunch without needing to keep track of an ID card. Three Square Market's honesty about the purpose of the microchips led to over half of their employees voluntarily participating in the program.

While Three Square Market's technology isn't used for tracking just yet, Amazon received a patent earlier this year for wristbands that vibrate when employees perform tasks incorrectly. The company believes the wristbands, which haven't been produced or used yet, could speed up processes. Skeptics worry about the technology's potential to dehumanize employees. As technology continues to develop, organizations will have opportunities to track and monitor employees in new ways. As these new options arise, businesses need to ensure they listen to employees and review legal guidelines surrounding employee monitoring. 

Monitoring computer web activity is different and can fall under different legal precedent. There are different types of computer monitoring software solutions, some with the capability to let you know exactly what employees are doing on their computers. You can monitor what websites employees are browsing while connected to the business's Wi-Fi, all the way to their keystrokes on their company laptop. There is practically no expectation of privacy for an employee using a company device, so a good rule of thumb is to assume that anything employees do on their computer is visible to their employer.

While it's fine to monitor employees' computer usage to make sure they're not wasting time on social media and frivolous browsing, employers should know they risk acquiring too much information. Employers already have employees' most personal data, and they can run amok of privacy laws like HIPAA if they disclose private information to anyone.

Employers have the burden of protecting that information, even that which comes from an employee's personal browsing history or private data stored on a company computer. If a data breach were to occur, for example, and certain sensitive information was exposed, it leaves the company vulnerable to litigation by the employee.

Another way employers can monitor employees is through GPS tracking, normally as part of fleet tracking and telematics on company vehicles. With most fleet software, managers can track where a company vehicle is and where it's been, even if the employee is off the clock. Business owners can do this, as they have the right to know where their property is. However, when it comes to using GPS tracking of company devices like laptops and phones, it enters another murky area since employers can learn more than they need to about an employee's activity when they're off the clock. [Looking for GPS fleet tracking software? Check out our best picks.]

Regarding employee monitoring, it's best to err on the side of transparency and balance. For example, posting clear signage citing your company's policy discouraging non-work-related computer use can cut down on undesirable behavior without the need to overtly monitor employees.

"Ultimately, a balance can be reached by thinking through legitimate business interests and weighing them against the expectation of privacy of employees while also taking into account regulatory limitations which may differ state to state, country to country," said Joseph Lazzarotti, principal with Jackson Lewis law firm.

Additional reporting by Bennett Conlin.

Andreas Rivera
Andreas Rivera,
Business News Daily Writer
Andreas Rivera graduated from the University of Utah with a B.A. in Mass Communication and is now a staff writer for Business.com and Business News Daily. His background in journalism brings a critical eye to his reviews and features, helping business leaders make the best decisions for their companies.