Pennsylvania Employee Monitoring Software: Best Practices for Regulated Industries

You may run a bank in Pittsburgh or manage a hospital in Harrisburg. Or, perhaps, your insurance firm in Philadelphia handles thousands of sensitive client records every day. In all of these cases, your employees have access to sensitive data that, if mishandled deliberately or accidentally, could lead to serious legal, financial, and reputational consequences.

Across Pennsylvania, organizations in banking, finance, insurance, and healthcare are under stringent security and compliance requirements. Employee monitoring software is a critical component for meeting these requirements, managing risks, and enhancing security.

But how can it be implemented correctly in Pennsylvania? Let's explore this topic in today's article.

Understanding the state and local privacy regulations is critical for implementing employee monitoring in any industry; in regulated spheres, however, it is twice as critical. Employee monitoring software helps ensure client or patient data is protected and handled correctly. In the process, it collects extensive amounts of data on employee activity and may inadvertently capture sensitive client or patient data as well. So, when implementing tracking software in regulated industries in Pennsylvania, you should consider the following:

1. How well does it help protect sensitive client data?

2. Does it comply with industry-specific regulations?

3. Does it support employee rights regarding data collected about them?

To answer these questions, knowledge of Pennsylvania's legal landscape is necessary. Let's start with industry-specific regulations.

In healthcare, employers must comply with HIPAA (Health Insurance Portability and Accountability Act). It demands the utmost protection for Protected Health Information (PHI), which is individually identifiable health information, such as medical histories, test results, insurance information, or any data that relates to a person's physical or mental health, healthcare provided, or payment for healthcare.

Pennsylvania law also prohibits disclosure of HIV-related information and records of mental health or substance abuse treatment without written consent.

Employee monitoring software, when implemented correctly, acts as a vigilant guardian, helping you detect and prevent potential breaches of this sensitive data.

Companies working in finance must comply with GLBA (Gramm-Leach-Bliley Act). It requires safeguarding a consumer's Non-Public Personal Information (NPI). NPI is any information that:

1. The client provides to obtain a financial product or service ( a name, address, income, etc.)

2. Results from any transaction performed for a client (account numbers, payment, history, balance, etc.)

3. A financial company obtains about the client to provide service or a product (court records, consumer reports, etc.)

Employee monitoring is crucial to identifying security threats early and remedying them.

In insurance, the Pennsylvania Insurance Data Security Act (PIDSA), effective December 2023, requires robust safeguards for nonpublic information, incident response, and employee training regarding cybersecurity and monitoring.

Speaking about employee privacy rights and employee monitoring, companies must consider the Pennsylvania Wiretapping and Electronic Surveillance Control Act ("Wiretap Act"). Pennsylvania is a two-party consent state. It means that recording, intercepting, or monitoring oral, electronic, or wire communications is illegal without the consent of all parties involved.

While the Wiretap Act restricts audio recording, it generally does not prohibit video monitoring as long as no audio is recorded. Video monitoring is prohibited in restrooms, locker rooms, and other areas where employees have a reasonable expectation of privacy.

The federal Electronic Communications Privacy Act (ECPA) is similar to the Wiretap Act. It prohibits employers from intercepting electronic communications without consent, but provides exceptions when monitoring employer-owned systems, especially for legitimate business reasons.

Under Pennsylvania law, employers are not obliged to inform employees about monitoring, except for monitoring communications.

This was only a brief overview of the Pennsylvania regulations. We recommend seeking advice from a legal expert before implementing employee monitoring.

But why do employees in industries like finance, insurance, and healthcare need to be monitored in the first place?

Imagine the data they handle daily. Social security numbers, account balances, medical histories, personal identifiers, and a lot of other valuable data. As we learned in the previous section, this data is protected by law, which places obligations on organizations that handle it. Employee monitoring software can help:

1. Ensure continuous compliance with regulations and generate an audit trail.

2. Detect unauthorized access to sensitive data, unusual data transfers, or other suspicious activity that could indicate a potential data leak.

3. Address insider and external threats.

4. Ensure that data is processed according to established protocols.

Implementing employee monitoring can be a complex and confusing process, especially in regulated industries, where mistakes can be costly. Here are seven best practices tailored for Pennsylvania business leaders.

What data does your organization hold? Who has access? Where are the weak points?

Before buying software, assess your risks. A bank handling wire transfers has different needs than a clinic managing patient intake.

Not all monitoring software is suitable for regulated industries. Your chosen software must clearly state that it is compliant with HIPAA or other applicable regulations in your industry. Look for features like:

1. Encrypted audit trails (HIPAA requires 6-year retention)

2. Role-based access logging

3. Integration with DLP and SIEM systems

4. Alerts for suspicious behavior (e.g., after-hours access, bulk downloads)

Surprise monitoring can backfire. Instead, be open. Develop a clear, written policy that explicitly outlines what will be monitored, why it is necessary, and how the collected data will be used and secured. Hold a brief meeting. Explain that monitoring is used not to catch people, but to protect clients and meet legal obligations.

Although in Pennsylvania, you generally do not need consent for visual or computer monitoring in the workplace, transparency reduces resistance and fosters cooperation.

There is no need to record every keystroke. Define clear objectives for your monitoring program. Is it to prevent data exfiltration? To ensure adherence to specific security protocols? Limit your monitoring activities to what is strictly necessary to achieve these stated goals.

Focus on high-risk systems: patient databases, financial platforms, claims processing tools. Apply monitoring based on role and data sensitivity. A receptionist does not need the same oversight as a claims adjuster.

The logs you collect are sensitive. They may contain your employees' personal information and inadvertently captured client data.

Treat the data collected by your monitoring software with the same level of security you apply to your clients' sensitive information. If someone hacks your monitoring system, they could see everything. So secure, encrypt, and restrict access to it to a limited number of personnel, and audit who views the logs.

Managers should understand what the software does, the company's monitoring policies, the broader security practices, and the importance of regulatory compliance. Employees should know their responsibilities. And executives need to model ethical behavior - no exceptions.

Regulations change. Staff turnover happens. Technology evolves. Revisit your monitoring policy at least once a year. Also, good practices are running mock audits and testing your incident response plan.

Summing up, employee monitoring in regulated areas is about responsibility.

If your company operates in healthcare, insurance, or finance in Pennsylvania, it handles some of the most sensitive information people have. Your clients, patients, and customers count on you to protect it.

When implemented thoughtfully, monitoring software is a shield. A way to catch mistakes before they become breaches. A way to prove compliance when the time of the audit comes.

The ultimate goal of monitoring is not to foster a climate of suspicion, but rather to cultivate a secure and compliant environment that protects your organization, your clients, and your reputation.