Creating an Employee Monitoring Policy: a Step-by-Step Process

Employee monitoring is becoming a standard in hybrid and remote work environments. While it can enhance productivity, implementing employee monitoring software also raises significant ethical and legal concerns.

On the one hand, your employees may wonder if this type of software serves legitimate business purposes and, on the other, there’s the question whether surveilling your employees is even legal.

To navigate the landscape effectively, a business must establish a clear, ethical, and legally compliant employee monitoring policy.

This article outlines everything you need to know to create such a policy, have your employees fully on board with the practice and remain in compliance with legal regulations.

Let’s get started!

employee monitoring policy step by step guide

Step 1: Define the Purpose of Employee Monitoring

Creating a sustainable employee monitoring policy must begin with clearly articulating why productivity tracking is necessary in your business in the first place. Define concrete objectives to ensure employee buy-in and instil trust in the employee monitoring program.

These are the most common objectives of employee monitoring:

Tracking productivity: using monitoring data to increase project and organizational efficiency.
Ensuring data security: preventing breaches, leaks, or unauthorized access to sensitive information.
Preventing harassment or policy violations: identifying and mitigating harmful behaviors in the workplace.
Complying with legal and regulatory requirements: ensuring adherence to laws and standards relevant to your industry.

It’s critical to avoid overreach while you’re working on defining the objectives for your employee monitoring policy. Align it with specific business needs and ensure it’s not extending into areas that aren’t relevant, as this may interfere with employee privacy.

Step 2: Familiarize Yourself with Employee Monitoring Laws

There are a number of laws that regulate productivity monitoring and these vary significantly depending on the region. Understand the relevant employee monitoring laws applicable to your business to avoid potential breaches.

Employee monitoring software users in the U.S. will have to take into consideration both federal and state laws, but international regulations are also applicable, especially to multinational businesses. Here are the most important U.S. federal and state laws, and international regulations you must be aware of:

employee monitoring policy laws

Electronic Communications Privacy Act (ECPA)

ECPA is a federal regulation that stipulates how employers may monitor employees’ communications, balancing workplace surveillance needs with employee privacy rights. It allows for employee monitoring with their consent or for legitimate business purposes, but prohibits unauthorized interception of electronic communications.

More specifically, the following activities are prohibited under the Electronic Communications Privacy Act:

Monitoring employee communications made through company computers and other devices, if it’s in the ordinary course of business.

Tracking company vehicles or equipment using GPS, if it serves a legitimate business purpose, such as logistics or safety.
Monitoring employees’ internet usage, keystrokes, or application activity on company computers, as long as employees are notified.
Monitoring for cybersecurity threats, preventing data breaches, or ensuring compliance with legal obligations.

On the other hand, the Electronic Communications Privacy Act prohibits the following, among others:

Real-time interception of personal phone calls, emails, or text messages without employee consent.
Monitoring of electronic communications that is clearly personal and unrelated to work.
Covert employee monitoring, including video surveillance, unless there’s a strong legal justification, such as suspicion of criminal activity.

California Consumer Privacy Act (CCPA)

A state-specific regulation, that permits monitoring of business communications but upholds employee privacy rights, along with the California Privacy Rights Act (CPRA).

General Data Protection Regulation (GDPR)

GDPR is an European Union-wide regulation that allows employee monitoring if lawful grounds exist. First and foremost, it emphasises transparency and data protection in the European Union.

We highly recommend seeking legal counsel to ensure compliance with all relevant employee monitoring laws, including labor regulations and union agreements. Understanding these rules will protect your business from legal issues and ensure your employee monitoring policy aligns with international and local requirements.

Step 3: Address Ethical Concerns

Legality of employee monitoring isn’t the only challenge businesses need to address before installing the relevant software. The issue of ethics is also critical. While employee monitoring software offers numerous advantages, it’s unlikely your employees will welcome it with enthusiasm.

From the employee’s perspective, employee monitoring typically raises a number of concerns:

The feeling of being ‘spied on’
Lack of privacy
Stress related to constant tracking – data shows 56% of employees feel this way
Fear of using the data for punishment rather than constructive feedback

All of the above may lead to the overall decrease of employee morale as well as resentment towards your business, which will take a negative turn on your workplace in the long run. Gaining support from the workforce is thus essential for the success of any monitoring program.

Monitoring practices should avoid creating a culture of suspicion and instead focus on fostering trust through transparency and fairness. Building trust through fostering collaboration and ensuring transparency are key to ensuring employees feel at ease and to prevent creating a tense or adversarial workplace.

Step 4: Engage Employees in the Process

Engaging employees in developing the policy will demonstrate that you value their input and ensure they understand that the employee monitoring software will work for them, not against them.

Here’s what we recommend:

Consult stakeholders: engage employee representatives in developing the employee monitoring policy. Creating a task force you’ll engage in the following stages of the process will ensure a collaborative effort.
Inform employees early on: educate them about the rationale for monitoring, how it will be implemented, as well as their rights – the latter is crucial!
Encourage feedback: create channels for employees to ask questions and share concerns. Answer their questions and encourage open dialogue.

Step 5: Ensure Transparency of Employee Monitoring Practices

Transparency is the ultimate key to building trust in your employee monitoring policy. Inform employees about the following aspects:

The scope of workplace monitoring: specify what kinds of employee communications will be tracked. E-mails, internet usage, location data, etc.?
Employee productivity data handling: explain what employee monitoring methods will be applied – how data will be collected, stored, and used.
Employee monitoring tools to use: identify the technologies used, such as keystroke logging, GPS tracking or video surveillance.

Types of Employee Monitoring Software

From the employees’ perspective, the tools used for productivity monitoring are of great importance. This is because the different types of software available on the market offer different levels of intrusion. Tools like TimeCamp are simple time trackers, logging app and website usage, while others are more invasive, offering screen recordings, webcam access, and email monitoring.

While the former are mutually beneficial: helping employers understand time allocation while boosting employee productivity accountability, the latter create a one-sided power dynamic. They offer little value to employees beyond temporary productivity gains driven by fear of surveillance. They also create trust issues, which won’t earn you the necessary employee buy-in.

So, choose your employee productivity tool wisely.

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Step 6: Define Acceptable Monitoring Practices

Once you decide what to monitor and how, and what to do with the data, focus on setting relevant boundaries to prevent excessive surveillance. The key here is to ensure employees their privacy is respected, even in a monitored environment.

Concentrate solely on monitoring work-related activities and monitor only what is necessary. Employee surveillance must also serve a legitimate purpose, such as ensuring employee safety, or adherence to legal frameworks. Any employee monitoring practices implemented without employee consent is prohibited. Avoid continuous video surveillance unless absolutely necessary and legally permissible.

See the below examples:

Acceptable Employee Monitoring Practices	Unacceptable Employee Monitoring Practices
Monitoring internet usage to ensure compliance with company policies.	Recording phone calls without explicit consent unless legally permitted.
Tracking company-provided devices (e.g., laptops, smartphones) for security purposes.	Reading personal emails or private messages on company or personal devices.
Using time-tracking software like TimeCamp to ensure productivity and project management.	Using invasive tools like key loggers or webcams for video surveillance without a strong justification.
Focusing on work-related data, such as application usage or keystrokes during work hours.	Tracking employees outside of work hours without a legitimate reason.
Use of monitoring tools to identify safety risks, such as unauthorised access to hazardous areas.	Covert monitoring without valid justification.
Monitoring compliance with workplace safety protocols.	Using GPS to monitor location outside of work-related activities.

In remote and hybrid work environments, as well as with field staff, it’s increasingly difficult to separate professional device usage from personal. Productivity monitoring tools like TimeCamp, equipped with geofencing, can automatically log the time spent at pre-defined locations, helping employers understand how much time their team members spent at work sites. This means employers may allow the use of personal devices for work without unnecessary off-duty hours surveillance.

timecamp employee monitoring software geofencing

Step 7: Ensure Employee Privacy Protection

Employees have a reasonable expectation of privacy guaranteed by the different legal regulations. Protecting that privacy is thus a critical aspect of any workplace monitoring policy. Here are the key three measures you should follow ensure your employee monitoring policy doesn’t violate employee privacy:

Minimise data collection: only monitor employee data that aligns with the stated objectives.
Implement safeguards: use robust data security measures to prevent breaches.
Anonymise data: where possible, anonymise employee data. For instance, you could aggregate productivity metrics to identify team trends without singling out individual employees.

Step 8: Establish a Governance Framework

It’s not enough to just set your employee monitoring policy. You’ll also need a governance framework to ensure it’s consistently applied and updated, if necessary. Here are the key considerations:

Policy ownership: who will be responsible for managing the policy? HR department? IT? Determine ownership to maintain accountability.
Regular reviews: these are required to ensure the policy continues to align with evolving legal requirements and your business needs.
Enforcement: employees need to understand the consequences of policy violations, and these consequences must be applied consistently to maintain fairness.

Step 9: Document and Inform Staff about the Employee Monitoring Policy

Effectively communicating employee monitoring policy is a critical step in ensuring successful rollout. When employees understand the rationale behind monitoring, they are more likely to support its implementation rather than resist it.

A well-documented policy is essential for clarity and consistency. The policy should be written in plain language that is easy for all employees to understand. It should also be readily accessible, whether as part of onboarding materials or through an internal portal.

Remember that employees who are unaware of the purpose and scope of monitoring may view it as invasive or a sign of mistrust. Clear and transparent explanation about what is and isn’t monitored help alleviate fears of intrusion.

Crafting a sustainable Employee Monitoring Policy

Employee monitoring software offers valuable benefits, but businesses must implement it responsibly, as there is a fine line between an employee monitoring program that works for the business, rather than against it.

A transparent, ethical, and legally compliant monitoring policy ensures employees are fully on board with the practice, earning their respect and building trust. By following these steps we have outlined above and choosing the right tools to support you in your employee monitoring efforts, you’ll be set to support your organisation’s goals while addressing employees’ rights once the productivity monitoring tool is installed.

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Sources:

American Psychological Association, Electronically monitoring your employees? It’s impacting their mental health

Forbes, What Managers Get Wrong About Employee Monitoring

Gartner, How Employee Productivity Monitoring Has Evolved – And What’s Next for HR

Gartner, The Right Way to Monitor Your Employee Productivity

International Association for Human Resource Information Management, In Employees We [Must] Trust: Using Employee Monitoring Software for Good and Not Evil

Society for Human Resource Management, Should Employers Monitor Employees’ Messages?

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Magdalena Jackiewicz Magdalena has over a decade of experience creating compelling digital content for the IT and tech industry. She is passionate about finding the best words to simplify complex ideas, making them accessible and engaging to diverse audiences. A true tech enthusiast, avid traveler, and art aficionado, Magdalena is constantly seeking opportunities to refine her craft and expand her expertise as a content creator.

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