how to monitor employees for regulatory compliance without violating employee privacy

Privacy Matters: How to Monitor Employees for Regulatory Compliance without Violating Employee Privacy © copyright 2011 ObserveIT Ltd. | www.observeit-sys.com

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Executive Summary

Under the increasing burden of regulatory compliance such as PCI, HIPAA, SOX, NERC and ISO 27001, companies

are more and more seeking some form of monitoring platform for recording employee activity. Not surprisingly,

this has been met with concern on the part of employees, who fear that employee monitoring is stepping on

their rights to privacy in the workplace.

However, a combination of transparency and common sense can bridge these two seemingly diametric

positions. After all, if an employer seeks to simply meet regulatory compliance, and can do so without infringing

on employee rights, then botdh sides will benefit from greater efficiency, clarity and profitability.

This whitepaper highlights the legal issues driving the employer and employee concerns, and follows that up

with a detailed checklist of how to effectively deploy a monitoring platform, achieve regulatory compliance and

maintain employee trust and support, all at once.

Opposing Forces?: Finding Common Ground in the Employee Monitoring Argument

Employee’s Fears

The advent of technology in the workplace has made it much more feasible than ever before for employers to

electronically monitor the activities of their employees, including phone conversation recordings, video

recordings of the workplace premises and computer activity recording.

The threat of being constantly monitored immediately brings to mind (thoughts of Big Brother: “We are being

spied on, so that the boss can squeeze even more work out of us!” And employees indeed are right in being

concerned about their own personal privacy.

Unfortunately, these concerns often overshadow the larger issue at hand. For this reason, it is critical that

employers take great efforts in order to ease the employee concerns.

Employer’s Needs

In reality, employee efficiency is a much smaller concern to employees than the much more threatening issue of

corporate accountability and security of sensitive information.

Privacy Matters: How to Monitor Employees for Regulatory Compliance without Violating Employee Privacy

An ObserveIT Whitepaper | Gabriel Friedlander


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Of course, employees would like to improve efficiency wherever possible. But in more cases than not, employee

training, trust and standard management oversight are effectively applied to meet these needs.

Accountability, however, is not so easily managed away. In almost every industry segment, compliance

regulations such as PCI, SOX, HIPAA, HITECH, NERC, ISO 27001 mandate very explicit accountability of all user

access to sensitive data. And even where regulations are not applicable, internal security controls will often

raise the exact same needs.

Recording user activity is the most straightforward way to answer this need. Here, we focus on the aspect of

computer activity recording, leaving aside the productivity orientation of phone conversation recording and the

physical security orientation of closed-circuit video.

The Legal Factors

Regulatory Mandates for User Tracking

While each compliance regulation is unique in its requirements, the core need surrounding sensitive data

typically boils down to: “Make sure your data is secure, and make sure you can show exactly who did what do

the data.” Some examples of accountability requirements include:

PCI-DSS

The Payment Card Industry Data Security Standard regulation provides 12 high-level requirements covering

a wide range of issues related to credit card and financial information management, from access rights to

data storage to audit monitoring. These include “Requirement 10: Track and monitor all access to network

resources and cardholder data”, with explicit details of what must be done. For example, Section 10.2

requires parties to “Implement automated audit trails for all system components to reconstruct the

following events: … 10.2.2 All actions taken by any individual with root or administrative privileges … 10.2.7

Creation and deletion of system-level objects.”

HIPAA & HITECH

The U.S. Health Insurance Portability and Accountability Act (HIPAA) specifies how organizations should

manage Protected Health Information (PHI). This includes Security provisions (Subpart C) and Privacy

provisions (Subpart E). These requirements are then further detailed in the subsequent Health Information

Technology for Economic and Clinical Health Act (HITECH), which requires entities to “clearly identify

employees and business partners” who access PHI, to “ensure that the data within its systems has not been

changed or erased in an unauthorized manner”, and “make documentation of their HIPAA practices

available to the government to determine compliance.”

ISO 27001

ISO 27001 is an Information Security Management System (ISMS) standard published by the International

Organization for Standardization (ISO). Businesses that implement ISO 27001 can demonstrate reliable

security practices to customers and business partners, thus establishing trust, meeting regulatory oversight

requirements of many nations and saving costs by reducing the needs for ad hoc auditing processes. ISO

27001 calls on any compliant business to examine information security risks; implement comprehensive

information security controls for risk treatment; and incorporate management processes in order to ensure

the controls on an ongoing basis.


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SOX

The U.S. Sarbanes-Oxley Act (SOX) is a wide-ranging act that requires all publicly traded companies to

deploy internal controls for accountability and integrity of the financial reporting process. This broad issue

includes Section 404: Assessment of internal control, which many assess to be the most difficult and costly

to satisfy. Fulfilling Section 404 is often achieved by adopting the COSO Framework, which include methods

for Risk Assessment, Control Activities, and Monitoring, among others. “If management fails to establish a

monitoring process for its internal control system, either in the form of independent evaluations or ongoing

monitoring, then a satisfactory rating for this control component normally would be inappropriate.”

Employee Rights in the Workplace

The right of employees to a reasonable level of privacy is quite clear, on a moral as well as legal ground. Laws

are in place in most countries on this matter. Some examples include:

USA (Federal Law): Electronic Communications Privacy Act (ECPA)

ECPA focuses primarily on the issue of government and law enforcement access to communications, but

also includes Title II, which protects any electronic communications that are maintained in storage, typically

in the form of computer-stored messages. Employee communications are protected in theory, but it is

quite easy for employers to provide notice or show that employee actions are not in the company’s

“interest”, providing the legal right to monitor employees.

USA (State law)

Many states enact additional restrictions or clarification via state laws. While these vary from state to state,

the heart of most of the restrictions remain in the realm of personal privacy, such as California’s Workplace

Surveillance Labor Code Section 435, which prohibits video surveillance in areas that employees can

reasonably expect privacy, such as changing rooms and restrooms. Some regulations extend these privacy

rights to computer messages, but again a certain vagueness remains regarding what is considered private

data remains. (ex: Personal messages posted on a private on-line forum during break time may be private,

but what if the forum is public, or what it is done during work hours, etc.)

Canada: Personal Information Protection and Electronic Documents Act (PIPEDA)

As in the US laws, PIPEDA also calls for employee privacy rights, but leaves a somewhat vague definition of

when it is justified to monitor employee computer activity. The Office of the Privacy Commissioner

provides some guidelines, which call on the employer to show that the surveillance is necessary to meet a

particular need; that the surveillance will likely be effective; that privacy loss is proportional to the benefit

gained; and that no reasonable, less-invasive methods exist to meet the need.

UK: Human Rights Act

The HRA allows employers monitor communications within the workplace only as the employee is aware of

the monitoring before it takes place. Furthermore, employees have the right to see any personal

information held about them.

European Union: Data Protection Directive 95/46/EC

This Data Protection Directive provides a wide range of guidelines for privacy assurance, without significant

focus specifically on the employer-employee relationship within this area. The net result, as in the

countries listed above, is again a situation where reasonable employee monitoring can be justified as long

as there is a proper trail of Notification, Purpose, Consent, Security, Disclosure, Access and Accountability.


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User Monitoring Checklist

Given the push-pull effect of regulatory mandates for monitoring on one hand, and personal privacy protection

on the other, some balk at the task of implementing a monitoring platform that is legal, compliant and

maintains the good will of employees. But threading this needle isn’t as hard as it may sound. Here’s how:

State upfront the exact goals

Let your employees know ahead of time why you

need to implement some form of monitoring. You get

good will when employees understand your needs.

To this end, be sure that you communicate in a clear

way. Don’t distribute a legal-sounding treatise about

regulatory oversight. Tell them in your own words,

using examples of the type of actions that you must

be accountable for to auditors.

Let them know what is OK, and establish trust

Clarify what is acceptable, when personal activity is

OK, and show how you respect and even encourage

it. If they know that Activity A is a no-no, but Activity

B is OK, they will feel more empowered and confident

in doing their day-to-day work. Again, avoid the

threatening legal-speak, and keep it personal.

Keep reminding them about policies and monitoring

activity

Any good will or clarity is lost if the info is hidden

among thousands of pages of corporate policy

manuals that are rarely looked at. If you can deliver

the message in a friendly, informative manner

(preferably while the user is initiating a recordable

activity), then you can be sure that the employee is

aware.

Tell employees how you will be monitoring them

Let everyone know what is being recorded. Don’t

worry about exposing potential workarounds, and

don’t try to keep the recording policy a secret, in

hopes of improving security. Anyone who might try to

work around the system will find the weak points

anyway, so you are better off being upfront in letting

everyone know exactly how it works.

Reinforce how accountability benefits the company,

and tie this to a benefit to each employee

Instead of making it a burden, show employees how

compliance will make work more efficient or

profitable. Highlight points such as the elimination of

ad-hoc audit research (which is usually a highly-

stressful activity) and improved safety of the

employee’s personal data from illegal activities.

Document the downside

Make sure that everyone knows what will happen if

they break corporate policy. You may not care if a

particular employee is shocked that s/he is being

fired for a particular violation. But what about all the

co-workers? You don’t want them in shock or angry.

It is better for all if their reaction is “Well, s/he knew

that this would be the result, because we all learned

it in our policy training session!”

Make all communications a corporate message, not

an IT or Legal message

Compliance issues are a company-wide concern, not

a specific IT concern or a Legal Department concern.

Plus, many employees are scared of the technology

team, and also of the lawyers. So make all the

communications from a corporate perspective, not

from any specific department. This delivers a clear

message that this is a clearly defined business goal,

not something driven by some crazy IT manager just

because s/he has the ability to do so.

Be Consistent

Make sure that your monitoring activities, as well as

any enforcement of policy violation, are all

implemented on a completely transparent and even-

handed manner. Employees should know that they

are not being singled out for any reason


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Solving both compliance and privacy: An effective solution for monitoring user activity that meets legal requirements

Visual On-Screen Recording + Textual Summary Logs: Capturing the information you need

The purpose of deploying a monitoring platform is to know what took place. With ObserveIT, you have instant

audit logs and video replay that show precisely what occurred. For any issue investigation, each log entry event

is linked to a full video replay of the user session. View an exact playback of user activity, as if you were looking

over the user’s shoulder as it took place. With this level of accountability, there is no question as to what

transpired, making any attempts of repudiation or denial utterly groundless.

Just-in-time policy reminders

Before authorizing the user to access the system, ObserveIT requires that policy status information be read and

confirmed. This eliminates the need to handle policy update validation in a separate process: No more email

trees, no more tracking spreadsheets to make sure everyone got it.

Salesforce.com

UPS.com Quantum View

MagicISO CD/DVD Manager

Microsoft Visual Studio 2010

Skype

CustomerDetails CRM

Cloud Apps

Commercial S/W with no logs

Legacy software

Commercial S/W with no logsCommercial S/W with no logs

WHAT DID THE USER DO? A human-understandable list

of every user action

Who, When, Where

Cloud Apps

USER SESSION REPLAY: Bulletproof evidence

PLAYBACK NAVIGATION: Move quickly between apps

that the user ran

CAPTURES ALL ACTIONS:Mouse movement, text entry, UI interaction,

window activity

REMINDER: All activities on this computer a

being recorded.

NOTE: Corporate policy states that

employees should not open any Customer

Details pages unless necessary for handling

an explicit customer request.

POLICY MESSAGING:User must acknowledge


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Excluding private activities from being recorded

In order to maintain employee trust and to meet the legal rights of employees, you may want to enable

employees to use certain applications, such as Skype or instant messaging apps, without fear of being recorded.

ObserveIT offers fully granular policy rules that give you the monitoring oversight that you need, while ensuring

that employees still have necessary privacy.

Consistent monitoring policy rules

The policy rules that are defined in ObserveIT are deployed consistently across all user groups, users, computers

and applications. It is easy to specify balanced rules that ensure consistency and prevent any sense of singling

out a particular employee or group of employees.

Protecting access to user recordings

ObserveIT provides a secure platform for storing all user recordings, and it also provides a fully-auditable

process for accessing these recordings.

A clearly-defined access control hierarchy explicitly specifies who can replay which recordings. Thus, some

administrators can have access to only some recordings, according to what application was being used, or by

which employee, or on what computers.

ObserveIT monitors itself as well, so any user access to view an employee recording will also be logged and

reviewable.

Enabling employee enquiries

ObserveIT enables you to create detailed reports per user or per computer that can be delivered by email. In

addition, user session recordings can be exported and delivered to employees, thus documenting exactly what is

being recorded when they explicitly request details, as per their rights according to the the UK WRA and other

similar laws.

GRANULAR RULESInclude / Exclude policy

per user group or application


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Conclusion

Meeting compliance regulations requires a detailed and orderly audit of user activity that can affect sensitive

data. Achieving this level of audit details requires a certain level of employee monitoring. However, this can be

achieved without losing trust of employees and without infringing on their right to privacy.

Successful implementation of such an auditing process requires building trust and faith among employees. This

can be achieved with transparency and clarity of all monitoring policies, combined with a monitoring solution

that delivers explicit audit details but allows for proper policy rules and security oversight.

ObserveIT’s software platform for user activity recording is a central pillar in any such monitoring strategy.

Benefits of using ObserveIT within any monitoring system include:

Accountability of all activities that can affect sensitive data.

Reduced costs to generate compliance reports, with less effort, and faster turnaround time

Unequivocal proof of user activity, guaranteeing authentication and non-repudiation

Greater employee trust that comes from a transparent and consistent platform

About ObserveIT

ObserveIT auditing software acts like a security camera on your servers. It provides bulletproof video evidence

of user sessions, significantly shortening investigation time.

Every action performed by remote vendors, developers, sysadmins, business users or privileged users is

recorded. Video recordings include mouse click, app usage and keystrokes. Each time a security event is

unclear, simply replay the video, just as if you were looking over the user’s shoulder.

ObserveIT is the perfect solution for 3rd Party Vendor Monitoring, Compliance Report Automation and Root

Cause Analysis.

Founded in 2006, ObserveIT has a worldwide customer base that spans many industry segments including

finance, healthcare, manufacturing, telecom, government and IT services.

For more information, please contact ObserveIT at:

www.observeit-sys.com

[email protected]

US Phone: 1-800-687-0137

Int’l Phone: +972-3-648-0614