The Legality of Using Employee Monitoring & Time Tracking Software

The Legality of Using Employee Monitoring & Time Tracking Software

Employee monitoring in a hybrid work environment is an issue that needs deep consideration. Given the increase in the adoption of remote working modes, companies have been forced to reconsider methods to measure employee productivity.

Every country and state has its labor laws that companies and employers need to comply with. In the blog, we will attempt to understand the legality of using employee Time Tracking Software.

Disclaimer: The blog attempts to share information available in the public domain. It shouldn’t be constituted as a piece of legal advice.

Employee productivity monitoring isn’t new. The use of manual clock-in swipes, security cameras, and GPS tracking have been around for ages.

The legality of employee monitoring and the resultant privacy concerns is best explained using a few countries as an example.

Employee Monitoring in the USA

Employees in the USA have the legal right to monitor the use of computers provide by the employer as it is their own property, according to the Electronic Communications Privacy Act (ECPA) of 1986. It is worthwhile to note that no federal law exists that mandates employers to notify employees that their activities are monitored on company-provided electronic devices.

However, does the ECPA infringe upon the rights to privacy of the employees? The ECPA contains certain parameters that protect the privacy of the employees. For instance, the ECPA prohibits the intentional interception of oral, electronic, and wire communication unless an exception is warranted. Known as the Business Motive Exception, it allows employees to monitor the oral and electronic communication of the employees only if it was done for legitimate business reasons. An example would be recording the calls between a customer and a bank representative to prevent complicated situations in the future.

Furthermore, since the law in the US varies by state, some states require employers to disclose the use of employee tracking software whereas, in other states, the use of time tracking software is allowed without the explicit consent of the employees.

Let’s look at a couple of other countries.

Employee Monitoring in EU

As deemed by the European Court of Human Rights, companies need to adhere to the General Data Protection Regulation (GDPR) laws that require them to provide prior notice to the employees for monitoring their online communications. The employees need to consent to tracking and monitoring.

However, there is an exception too. If the company performs a legitimate interest assessment and is able to prove beyond doubt that there is a need to monitor data without the consent of employee/s, then they can install tracking provisions.

In an online space, businesses continuously face the threat of breaches, identity theft, takeovers, and tough compliances. To address this predicament problem we can use key ID Verification Services

Employers also need to perform a Privacy Impact Assessment activity before implementing any Employee Monitoring Software to determine and mitigate any challenges resulting from the installation of such software.

Lastly, the GDPR law applies to any and all companies operating in the European Union, even if they are registered outside the European Union but have employees within.

Employee Monitoring in Australia and Canada

Both the countries are clubbed here as their employee monitoring laws are fairly simple. Laws require employers to disclose the use of tracking, monitoring, and surveillance measures well in advance. Not all Australian states have surveillance laws and employees are required to notify at least 14 days in advance. In Canada, details of employee pay and benefits should not be disclosed and the collection of formal/informal files or the collection of keystrokes cannot happen without the knowledge and consent of the employees.

Employee Monitoring in India

The Employment and Labour Law of India states that an employer can monitor employee activities such as SIM card usage, computer usage, and the use of other company assets. The reasoning is to protect sensitive and proprietary information about the company. However, employee monitoring or time tracking should not infringe upon the privacy of the employees. There is, however, no clarity on whether employees should be notified about monitoring or not.

Is employee monitoring really necessary?

Yes, to put it bluntly! The logic is really simple – any company needs to ensure that their employees aren’t wasting the resources of the company. It isn’t akin to spying; managers need to monitor productivity and scale the resourcefulness of the entire team. Other benefits include:

  • It helps employees and managers to manage their duties and workload better.
  • Improved time tracking software helps to comply with budgetary restrictions.
  • It allows the employers to review individual and team performances, and decide the next course of action.
  • Employee Monitoring simplifies the payroll process, especially in contractual or freelancing positions.
  • It builds individual employee accountability, eliminating the need to micromanage by the managers.
  • A timesheet software saves time and money for the employer.


The use of time tracking software is increasingly necessary for a hybrid working environment. Kindly check with the labor laws and privacy laws of your country before deciding upon the use of employee monitoring software.

Our DeskTrack Employee Monitoring Software is legally compliant and doesn’t infringe upon the privacy of any team member.

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