Employee monitoring at companies must comply with applicable federal and state laws that govern workplace privacy, electronic communications, and data handling. U.S. law generally allows employers to monitor company-owned devices, networks, and accounts as long as employees are properly informed. This includes monitoring activity such a application usage, website access, login times, and interactions that occur on company systems. However, employers must avoid monitoring areas where employees have a reasonable expectation of privacy, such as on personal devices or non-work accounts. In addition to this, certain states require explicit employee consent before monitoring digital activity, and failure to provide notice to this monitoring can lead to legal disputes and possible regulatory fines. Monitoring is allowed for legitimate business purposes, such as security and productivity tracking.

Ethically, employee monitoring requires a careful balance between legitimate business needs and respect for individual privacy. Even when employers have the right to monitor workplace systems, the level of oversight must not become excessive or disproportionate to the purpose it serves. Excessive monitoring, such as tracking every keystroke or capturing non-work-related activity can create a sense of surveillance that damages employee morale and trust. Ethical monitoring practices must focus on transparency, meaning employees should be clearly informed about what data is collected and why it is being collected. Employees should also understand how long the data will be stored for, and who has access to it. Ensuring that monitoring focuses strictly on work related behaviors rather than personal habits or off duty conduct is also important to preserve a trusting environment. The methods used should be proportional, targeting risks such as data security or productivity issues without infringing on personal privacy of staff.