In 2022, after a Florida-based software company fired a remote employee based in the Netherlands for refusing to keep his webcam turned on, a Dutch court ruled in favor of the worker. The company had to pay the employee 75,000 euros, according to the BBC.
In another case the following year, the Illinois Supreme Court found fast food chain White Castle was guilty of sharing employees’ biometric data with a vendor without employee consent, according to the American Bar Association. The Ohio-based restaurant chain required employees to scan their fingerprints to access their paystubs and provided the fingerprint data to an outside vendor to manage payment processing, which ran counter to the Illinois Biometric Information Protection Act.
New technologies have made it possible for employers to have greater access to employees and their data, but cases such as these show that going too far can have negative consequences. And younger generations of workers have different ideas about digital privacy than their older co-workers, making digital privacy an important component of the employee experience.
“If Gen Xers [born between 1965 and 1980] and Baby Boomers [born between 1946 and 1964] simply accept certain privacy regulations, younger employees are asking why,” said Peter Miscovich, executive managing director and global future of work leader at global real estate and investment services company JLL. “They want to know, ‘How is this being done and why is it being done?’ and they’re interested in being involved in designing privacy policies.”
About two-thirds of global IT and business leaders (68%) said they believe failing to meet the digital experience demands of younger workers will lead employees to consider leaving the company, according to a survey by telemetry data firm Riverbed. As digital natives enter the workforce with new expectations, employers must evolve or risk losing employees’ trust.
The Generational Shift
There are a number of reasons why people in Gen Z (born between 1997 and 2012) and Gen Alpha (born after 2012) view privacy differently from previous generations. First, they are digital natives who may have a deeper inherent understanding of all the data available through online systems and the ability for organizations to access and use it.
A 2024 Cisco survey shows that younger consumers are more aware of privacy laws and more active in taking steps to protect their privacy. For example, 49% of survey respondents between the ages of 25 and 34 were classified as Privacy Actives — people who are concerned about digital privacy and willing to take action to protect it — compared to just 33% of both those ages 45 to 54 and those ages 55 to 64.
Also, Gen Z came of age when data privacy was in the spotlight. During the 2010s, British consulting firm Cambridge Analytica accessed personal data belonging to millions of Facebook users for political advertising without consent. Facebook’s parent company, Meta, eventually paid millions to settle the resulting lawsuit, and the controversy altered the public’s view of technology companies and their access and handling of personal data.
As they populate the workplace, members of Gen Z and Gen Alpha expect their privacy concerns to be taken seriously. “A big mistake some organizations make is taking a top-down approach, tracking employees’ time in the office or overseeing social media usage,” Miscovich said. “Baby Boomers and Gen X were much more compliant, but younger workers want to know the how and the why, and the outcomes you’re looking to achieve.”
The Surveillance Backlash
Workplace surveillance technology, including the use of AI to monitor workers, became increasingly common during and after the onset of the pandemic. Over the past several years, as new technologies have made surveillance easier, employers have monitored employees’ emails and files, installed webcams on work computers, tracked when and how much a worker is typing, and monitored workers’ calls and movements with trackable devices and other technologies.
Not surprisingly, employer surveillance is unpopular across the board, but especially among younger workers. In a 2024 survey by background check company Checkr, when employees of all ages were asked if they felt employers’ monitoring of their online activity during work hours was an invasion of privacy, 65% of respondents agreed or were on the fence. Agreement was inversely related to age: 72% of Gen Z respondents, 67% of Millennials, 63% of Gen Xers, and 60% of Baby Boomers agreed that their privacy was being invaded or that they were undecided about this issue. This discomfort with surveillance is so strong among younger employers that many are willing to make trade-offs: 54% of Gen Zers said they would consider taking a pay cut for enhanced privacy at work.
As younger workers have greater privacy expectations, traditional employer surveillance programs may alienate them. These workers want to be evaluated based on their outcomes rather than the minutes they spend on a task, said Danita Torres, executive vice president of operations and client services at Congruity HR.
“When it comes to building an employee experience that simultaneously delivers business results and keeps the best employees engaged, trust is everything,” said Ethan McCarty, founder and CEO of employee experience agency Integral. “Using monitoring tools in ways that employees perceive as sneaky or malicious can quickly erode that trust, especially for younger workers who already view privacy differently and expect more transparency. If people feel like they’re constantly being watched, they’re less likely to feel valued and more likely to disengage. Essentially, you’re pushing a transaction rather than a relationship. The dynamism of today’s workplace calls for intentional, well-designed approaches that balance accountability with respect for individual boundaries.”
The Policy Shift
Cases such as the Dutch webcam and White Castle rulings underscore that missteps around employee privacy don’t just erode trust — they can have serious financial and legal consequences. As individuals have become increasingly concerned about digital privacy, new government regulations such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) are taking shape to support those concerns. “The laws are just catching up with what Gen Z and Millennials already expect: consent, access, and control over their data,” Torres said. “Things like GDPR and the California [Consumer] Privacy Act support those values. When companies comply with these laws, it signals to employees that their privacy matters, and that builds trust, especially with younger workers, by mirroring what they have come to expect: data transparency, control, and accountability.”
Laws such as GDPR and CCPA now require employers to be more forthcoming about the employee data they’re collecting and why. “When you’re dealing with remote teams and potentially international clients, these cross-border rules actually make things simpler because everyone’s playing by similar privacy rules,” McCarty said.
More regulations such as these are expected, and HR leaders will need to assist with compliance and enforcement efforts, Miscovich said. He expects that compliance and enforcement with privacy regulations will eventually be AI-enabled.
Until more widespread privacy laws are passed, however, “employees in the United States should not have expectations of privacy in the workplace when communicating using company equipment or while in company-owned facilities,” McCarty noted. “There are notable privacy carve-outs for some protected topics and activities such as whistleblowing on misconduct or union activity, but generally speaking, while you’re working, you’re on the record with your employer, even if working from home.”
Finding a Balance
Despite the increasing regulations and the pushback from younger employees, many employers have legitimate reasons to monitor workers. They must consider the responsibility to manage data security, compliance, and industry regulations, as well as the productivity of their hybrid or remote workforce.
With this tension between managing risk and protecting employee trust, employers must endeavor to develop solutions that work for everyone. It’s possible to strike a balance between risk and trust, fulfilling employer obligations without jeopardizing employee relationships.
How to Build Trust Through Transparency
Even when monitoring is legally permissible, employers may benefit from evaluating whether it supports or hinders their efforts to foster a positive employee experience. Experts recommend following these steps to develop a privacy policy that works for your organization and will not alienate valuable employees.
Involve employees in policy design.
Develop a privacy policy with stakeholder input, including engagement from employees at all levels, Miscovich said. Use an intentional, privacy-by-design approach that is nuanced and appropriate for each work type. For example, employees who handle sensitive financial information may have more data-sensitive privacy procedures than those who only have access to less sensitive information.
Even after the policy is developed, continue to allow for regular employee input. “Make sure employees know how to raise concerns, and that you’ll listen,” Torres said. “They want to know their voice is heard. One thing that’s worked well for us is creating a ‘Just Ask’ forum where our employees can ask questions privately or in a group setting. These questions are addressed monthly in our town hall meetings. It ensures that our team feels that our leaders are more transparent and less like Big Brother.”
Show how you protect employee data first.
Year after year, Integral’s employee experience research shows that workers rank “data privacy” in the top five issues they want employers to make an impact on, McCarty said. As a result, he recommended employers “lead with what you’re doing to protect the employees’ privacy before you campaign to get them to protect customer and company data.”
Be transparent about how you track or monitor employees and their data.
“If you’re collecting data such as productivity data or system usage, just explain what you're doing and why,” Torres said. “In my experience, employees are usually fine with it if they understand the benefit and feel like they have a say. Offering opt-in choices or creating simple explainer sessions can go a long way in building that trust.”
Miscovich recommended using digital dashboards that provide transparent visibility of what’s being tracked, why it’s needed, and how it’s protected.
“Frame tracking as a tool for support and optimization, not punishment,” McCarty said. “When people feel informed and included, they’re more likely to act in good faith.”
Revisit privacy policies regularly.
As technology and privacy regulations evolve, employers must be prepared to refresh their policies regularly. “Be sure your policy is continuing to meet enterprise objectives, workforce objectives, and employee expectations,” Miscovich said.
The future of workforce strategy lies in privacy policies that reflect cultural values, not just legal requirements. Landing on the right balance of privacy and data security will depend on successful partnerships among CHROs and technology leaders, Miscovich added. “It’s a new world in 2025, and the topic of privacy needs lots of attention,” he said. “The responsibility for success on this topic lies with HR, IT, and the enterprise.”
It's widely understood that high-quality, intentionally designed employee experiences have a direct impact on strong business outcomes. However, in a dynamic marketplace with rapid technology shifts and a diverse workforce, “a one-size-fits-all approach to privacy won’t work,” McCarty said. “Stay curious, keep listening, and design flexible privacy practices that respect different comfort levels while still protecting the business."
The SHRM CP/SCP Certification is the gold standard for HR practitioners. The skills & knowledge learned during certification preparation are considered the most essential for an impactful and strategic HR professional.
An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.
Related Content
HR must always include human intelligence and oversight of AI in decision-making in hiring and firing, a legal expert said at SHRM24. She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law.
The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.
Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.