Employee Monitoring Software in California: Legal Requirements and Best Practices

Article I, Section 1 of the California Constitution declares privacy an inalienable right of all people. However, privacy rights are not so absolute in the workplace because they may overlap with the business's legitimate interests, such as maintaining productivity and security.

These clashes of interests are regulated by the following:

• California Invasion of Privacy Act (CIPA). CIPA prohibits eavesdropping or the recording of confidential conversations in all their forms without the consent of all parties. These forms include phone calls, emails, and instant messages. CIPA prohibits organizations from secretly recording even work-related conversations (e.g. phone calls with clients) without the employee's and the client's consent. This consent must be explicit and documented. Simply stating in a general policy that monitoring may occur might not be sufficient to establish valid consent in all situations.

• California Labor Code Section 435 prohibits employers from requesting employees' or candidates' social media information.

• California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA) focus primarily on consumer data, but they extend certain rights to employees as California residents. Namely, businesses must notify employees about what their information is collected, why, how it is used, and their rights to access, delete and opt out of using their personal information.

• Reasonable expectation of privacy suggests that the legality of monitoring often depends on whether an employee reasonably anticipates privacy in the area or a method of communication. A clearly communicated monitoring policy can slightly diminish this expectation. However, even such a policy cannot allow employers to monitor areas where employees always expect privacy, such as restrooms or break rooms.

Reasonable expectations of privacy may vary significantly depending on the monitored device and area. For example, employees naturally expect less privacy in common open areas, such as workstations or meeting rooms, especially when the employer provides a transparent monitoring policy. On the contrary, personal offices, personal lockers, and, of course, restrooms and changing rooms are the areas where employees expect a high level of privacy.

A similar principle applies to monitoring devices. Tracking company-owned laptops, phones, and other devices is generally more expected and legally defensible. At the same time, monitoring personal devices, especially, outside work hours or involving personal accounts is considered a "no-no" in most cases.

Summing it all up, California employers can monitor:

• Company-owned devices and platforms and work-related communications on them.

• Employee performance within reasonable limits.

• Location of company-owned vehicles or devices.

• Compliance with security policies, company code of behavior, and legal regulations.

• Internet usage on company networks.

• Security footage within the company premises.

Organizations should not:

• Track personal communications on employees' personal devices or outside work hours.

• Monitor private areas with high expectations of privacy, such as changing rooms or restrooms.

• Use discriminatory monitoring practices based on gender, disability, religion, or other protected characteristic.

• Use hidden monitoring that undermines employees' dignity.

• Use monitoring a harassment or intimidation method against disagreeable employees.

To stay on the right side of the law and respect employee privacy, we recommend California business owners follow these principles:

• Always inform employees about any form of monitoring.

• Obtain consent to monitoring where necessary.

• Have a legitimate business purpose, such as performance concerns or security.

• Only monitor what is essential to achieve the stated business purpose. Avoid overly broad or intrusive monitoring.

• Limit monitoring to work-related communications and activities during work hours.

• When in doubt, consult an attorney specializing in California employment law to ensure your monitoring practices are compliant.

Implementing a monitoring solution is a more complex process than choosing the most powerful solution on the market and slapping it on employee's computers. We suggest a careful gradual process consisting of several steps.

We recommend starting with defining specific business problems you hope to address with monitoring. What are they: security, performance, compliance, or a combination of them? The answer to this question will dictate the features you should look for in a monitoring solution.

When you explore monitoring tools, you should mind some vital factors. The first one is the features of the software. Evaluate the offered capabilities, such as activity tracking, email monitoring, file transfer tracking, etc. Choose those that align with your defined needs and are legally permissible in California.

Ease of use and integration are equally important factors. A perfect choice is the user-friendly software that integrates seamlessly with your existing IT infrastructure and systems.

Besides, you may want to look for highly customizable software. It will allow you to change the monitoring settings and apply them individually to specific roles, departments, or employees. Such an approach will help you gain valuable insights while minimizing the data collection and complying with privacy regulations.

Another significant factor is scalability. Your business grows, and your monitoring solution should be able to grow with it.

Finally, research vendor reputation. Since you will collect potentially sensitive information, your software provider should have a reliable reputation, security certifications, and strong data protection protocols.

A sudden, company-wide rollout of monitoring software can reveal unpredicted issues and bottlenecks that will be tricky to solve on such a scale. Instead, we recommend starting with a pilot program involving a single department or a group of employees. This allows you to test the software, evaluate its effectiveness, gather feedback, and detect unexpected problems.

After finishing the pilot phase and making the necessary adjustments to the software, you roll it out to the whole company.

Effective implementation of employee monitoring software is not only installing it and fixing technical issues but also training managers and the staff on how to use it efficiently.

This training must teach managers how to use the software, interpret its reports, adhere to the company's monitoring policies, and address issues that may occur.

As for employees, they should understand what is being monitored, how the data will be used, what the company's monitoring policy is, and answer any questions or concerns they may have.

Implementing an employee monitoring solution is not a one-time process. Privacy regulations change, software develops new features, and your monitoring goals may evolve over time. That is why regularly reviewing the company's monitoring practices and policies is vital to stay compliant and ensure they are still relevant to your goals.

California regulations are strict regarding personal privacy. As a business owner or a manager looking to use an employee monitoring solution, you should look for a balance between your organization's legitimate interests and compliance with applicable laws. This balance lies in solid knowledge of privacy regulations, transparent, justifiable, and proportionate practices, and careful choice of monitoring software.