Do you require employees to sign documents electronically?  Is your Human Resources Department joining the multitude and going paperless? 

With the advancements in technology, many companies are looking for ways to reduce paper and store information electronically.  Although the benefits to such may be obvious, it is imperative that companies educate themselves on the laws that govern the acceptance and enforceability of electronic records and signatures, including the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C.A. sec. 7001, et seq. (“E-SIGN”) and the New Jersey Uniform Electronic Transactions Act, N.J.S.A. 12A:12-1, et seq. (“UETA”).  These laws may apply to your Company’s employment documents and personnel policies as well as to agreements with customers, clients, vendors and other third parties. 

Whether a person will be bound by an electronic signature will depend upon whether or not he or she has consented to engage in an electronic transaction.  That consent will be determined by the context and circumstances surrounding the transaction, including the parties’ conduct.  N.J.S.A. 12A:12-5b.  A common issue that has arisen with the use of electronic signatures in the employment context is whether or not the employee has in fact electronically signed the document at issue.  In order to avoid issues such as this, it is important to institute a protocol wherein the Company can show that the employee is the individual who actually “signed” the document, and not some other person who has access to the employee’s user ID and password.

Some Additional Requirements

            In addition to consent, the UETA sets forth additional requirements, summarized below, that are necessary to give legal effect to employment documents that are signed electronically:   

  • The employment record must be capable of retention by the recipient at the time of receipt.  In other words, the recipient must be able to print or store the electronic record; 
  • The recipient must be given the opportunity to opt-out and be provided with a hard copy of the document to review and sign;         
  • The employee must be informed of the hardware and software that he/she requires in order to access or retain a copy of the electronic document;
  • The employee must be told how to withdraw his/her consent to receiving documents in electronic form; and
  • The employee must be told how to obtain a hard copy of the electronic document.