7 Legal pitfalls of tracking remote workers in 2025 (And how to avoid them)

Increasing adoption of remote and hybrid work models has redefined the modern work landscape in 2025. This has encouraged many organisations to turn to advanced employee monitoring solutions to assess and measure employee performance, maintain workflow consistency, and ensure data privacy. Thus, understanding how to track remote employees efficiently has become a vital aspect of this new work dynamic.

However, tracking of remote employees is now without challenges. From adhering to various data privacy laws like CCPA and GDPR to changing employee rights regulations, organisations must be more cautious in the way they implement monitoring practices.

In this guide, we shall uncover the seven most pressing legal scenarios that are common in tracking remote workforces and how to prevent or avoid them. To address these challenges, we will also walk through Insightful.io’s varied configurations so that you can track employee performance without compromising on legal boundaries.

Risk 1: Lack of employee consent

One of the most common and legally risky steps organisations can take is failing to obtain employees’ consent voluntarily or giving out misinformation about the change before implementing the monitoring activity. According to the California Consumer Privacy Act (CCPA) in the US and the General Data Protection Regulation (GDPR) in the EU, companies must obtain employee consent freely, with due information, specific and unambiguous.

How to avoid it:

To prevent this legal violation, organisations should rely on monitoring tools like Insightful.io that provide built-in CCPA/GDPR-ready opt-in templates. These features enable managers to clearly explain to them what data is tracked, collected, how it will be utilised, and for how long it will be stored.

Step-by-step guide via Insightful.io:

• Navigate to the Admin Console and then to the Privacy and Compliance section.
• Find the Consent-based Monitoring Workflow and enable it.
• Upload a customisable consent template detailing data types and purposes.
• Design it in a way that employees can sign on the consent forms digitally and store it.
• Use the Audit Trail feature to track consent status.

You may also encourage employees to contribute to the talks about how to track remote employees to facilitate trust, the act of which also forces you to stay compliant.

Risk 2: Over-collection of data

Collecting data beyond permitted necessities, such as screenshots of personal activity or logging keystrokes may be assumed as data breach under GDPR’s data minimisation principles and other data protection guidelines.

How to avoid it:

This can be prevented by enabling tracking limits only to work-based metrics and excluding or anonymising personally identifiable information (PII) as applicable.

Resolve by using Insightful.io’s anonymised productivity tracking features:

• In the dashboard, toggle on Anonymised Mode to track aggregate behaviour, not individual.
• Set up Role-based Permissions, allowing only permitted personnel to access and view sensitive data.
• Apply Granular Data Filters to emphasise more on specific project-based tasks.

Risk 3: Inadequate data retention policies

Storing employee data for a prolonged period or having no clear framework about when or how to delete them may make the business liable for helfty penalties and litigation.

How to avoid it:

Organisations just need to set clear data retention guidelines with automated enforcement.

How to go about it:

• Go to Insightful’s Data Settings panel.
• Configure Retention Timelines based on data type, like screenshots, productivity logs, etc.
• Enable the Auto-Purge Rules to remove data after a pre-set period, say 120 days.
• Activate Compliance Logs to record and document data deletion logs for audit purposes.

Risk 4: Failure to inform employees of monitoring activities 

Despite employees voluntarily consenting to being monitored, many organisations often fail to adequately inform them of any changes that may happen in monitoring practices.

How to avoid it:

The company should curate a dynamic and transparent monitoriny guidelines and notify the employees of the same accordingly in due time.

Best practices:

• Add a live document easily accessible through the HR portal.
• Schedule quarterly “Privacy Check-in” sessions.
• Take advantage of the software’s built-in alert system to automatically notify employees of any alteration happening in the data collection practices.

Remember, regular and open communication lowers the risk of legal pushback.

Risk 5: Non-compliance with international regulations

Remote employees may work from any location, where every diverse place may be governed by different regulations. What’s compliant in Toronto may not apply in Texas.

How to avoid it:

Categorise employee monitoring based on jurisdiction and configure region-specific compliance settings.

Tips: 

• Make use of Geolocation-Aware Templates to apply the proper legal framework.
• Tailor monitoring policies as per country-specific protocols.
• Ensure Cross-Border Data Transfers abide with Standard Contractual Clauses (SCCs) under GDPR.

Legal compliance must also scale accordingly as the remote employees go international.

Risk 6: Invasive monitoring tools that violate employee rights

If you are not thoughtful with the selection of monitoring tools, you may unintentionally implement one that is invasive. These tools may access private social media information, capture off-hours tasks, or record webcams without any permission, infringing employee rights that lead to regulatory scrutiny or lawsuits.

How to avoid it:

Research and strictly adhere to ethical monitoring to keep the monitoring practices within business boundaries.

What to do instead:

• Block tracking on non-work applications through App Filtering.
• Disable surveillance outside of designated work hours through Scheduled Monitoring Windows.
• Educate members on what comes under ‘reasonable’ monitoring.

Risk 7: Lack of documented monitoring policy

Without creating a formal and well-detailed policy, monitoring practices may seem discriminatory or arbitrary, increasing the likelihood of internal grievances or external investigations.

How to avoid it:

Develop and share an extensive employee monitoring policy.

What should a standard policy cover:

• Purpose of monitoring
• What data is collected
• How data will be utilised
• Who has the access
• Employee rights
• Contact information for privacy concerns

After finalisation of the documented monitoring policy, attach it to the onboarding workflow, making it accessible for employees to review and accept it during implementation.

Closure

In 2025, organisations must work in a way that monitors remote employees in compliance with changing legal standards and respects employee privacy. Failure to do so can be risky and costly. So, while building your business’s remote work strategy, compliance must be a commitment.