Because our employee onboarding software utilizes electronic signatures, we are quite frequently asked “are electronic signatures valid?” The short answer is…yes.
Requirements for Valid Electronic Signatures
However, for this to hold true, there are conditions that have to be met. These were established with the Electronic Signatures in Global and National Commerce Act (ESIGN) of 2000. While you may wish to consult your Labor & Employment attorney for more details, I’ve listed below the core requirements that must be met for an electronic signature to be valid:
- The person signing the document must be allowed to view the completed document before being asked to provide his/her signature — this is to prevent any potential fraud in these types of transactions.
- The signature must be unique and verifiable — whatever device or software tool is being used to capture this must be able to record how the signature was entered, when (time & date), and how it is tied to that individual (password, IP address, etc.).
- The document may not be altered after the signature is affixed — as with the first point above, this is designed to make sure agreements can’t be changed after a person has signed them.
- The signature must capture the consent and understanding of the person providing it — this may be accomplished a number of ways, but is designed to make sure any “fine print” is made clear and obvious to any parties involved in the electronic signature process.
These guidelines are based on the federal ESIGN Act (referenced above), and apply to interstate commerce. However, there are states that will occasionally designate certain documents as not eligible for electronic signature recognition. While this doesn’t happen frequently, you should certainly check with your organization’s attorney before moving ahead with any service/solution that utilizes this process.
That exception notwithstanding, most any new hire documents are certainly eligible for e-signature. This includes files like I-9’s, W4’s, direct deposit forms, company policies and procedures, employee handbook acknowledgments, etc.
Selecting an Onboarding Software Vendor
Because this is a newer type of offering for most HR software providers, when going through the process of selecting a partner, please be sure to confirm that the vendor’s electronic signature process will pass muster, if challenged. The benefits of onboarding software are compelling, but you want to be sure you partner with a provider who understands and can explain how their tool complies with these protocols.