In an effort to go “green” or “paperless,” employers have been rapidly moving to electronic employment application and on-boarding systems. This movement has created a cottage industry with vendors of all kinds seeking to help employers obtain the benefits of this technology.

These vendors often promise significant advantages for those making the switch, such as: (i) thousands of dollars in savings due to reduced paper and paperwork costs, (ii) simplified compliance for human resources through the use of the proper electronic forms; and (iii) increased productivity. These can be particularly attractive to businesses facing the demands for increased effectiveness and efficiency, the difficulties of managing an off-site/remote workforce, and the expectations of technologically savvy job applicants.

While going green by reducing the use of paper and moving to a web-based employment application and on-boarding system can increase efficiency and reduce costs, employers should be aware of the fresh workplace challenges such a move can present. Before jumping in, employers need to consider issues such as the privacy, security and management of personal data, compliance with various federal and state regulations governing the use of electronic media in obtaining verifiable signatures, how to provide required notices, and the implications of having employees electronically fill out required tax and other government hiring forms, among other things.

Key considerations and questions for employers include the following:

  • Does the company have to comply with the federal Electronic Signatures in Global and National Commerce Act or a state law equivalent?
  • Are there laws limiting the personal information that may be collected from applicants?
  • Can the company require that employees receive notices electronically?
  • Can the company require that employees make their benefit elections and receive benefit plan summaries and other benefits documents electronically?
  • Is the process subject to collective bargaining?
  • How must personal information collected during the process be safeguarded, retained, preserved, and, ultimately, destroyed?
  • Are there special rules for government contractors?
  • Are electronic consents for fitness-for-duty examinations, background checks, and drug testing valid?
  • Can employees fill out I-9 forms electronically? Can the company retain only electronic copies of the I-9 forms?
  • If an applicant is hired, how should the collected information about the person be transferred accurately and securely for benefit plan enrollment, payroll, personnel, and other purposes? Does the company have a plan or policy in place that not only addresses how the information is safeguarded, but how to respond if a data breach occurs?
  • Are there specific ERISA (Employee Retirement Income Security Act), HIPAA (Health Insurance Portability and Accountability Act), IRS (Internal Revenue Service), and other regulations that apply to using an electronic medium? How do these regulations intersect and how do they differ?
  • Do the rules change for applicants from other countries?
  • Can handbooks be provided on-line as part of the on-boarding process?
  • Can direct deposit forms be filled out and signed electronically?
  • Can restrictive covenant agreements be signed electronically?
  • Can employees be notified of and sign arbitration agreements electronically?
  • Has the on-boarding vendor been vetted and shown capable of safeguarding personal data and preserving the integrity of that data? Where is the data stored by the vendor? Are appropriate contract provisions in place?

Employers implementing electronic application and on-boarding systems may realize savings of time and money. However, those savings may be short-lived if the on-line process is not designed to fit the particular company and address its particular needs and risks. Before taking this step, employers should seek appropriate guidance in navigating their way through the regulatory quagmire that is implicated by the seemingly simple act of going green.

Tags: e-application, e-sign, Information Management, onboarding
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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.

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