What is an electronic signature, and how is it used by HR professionals?

The Electronic Signatures in Global and National Commerce Act, also known as the E-Sign Act, is intended to facilitate the use of electronic records and signatures in interstate or foreign commerce. The E-Sign Act defines an electronic signature as “an electronic sound, symbol or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”

The use of electronic signatures is becoming more common in human resources as employers find themselves in situations where hard-copy signatures are not practical, such as rolling out handbooks for 1,000-plus employees or handling open enrollment for employees spread across the country. Establishing a system for electronic signatures is more efficient and is attractive to “green” employers that want to reduce paperwork and market themselves to candidates who appreciate employers with environmentally friendly practices.

Electronic signatures are different from electronic recordkeeping. While some employers choose to obtain hard-copy signatures and then scan the documents into an electronic recordkeeping system, electronic signature applications allow for a completely electronic system that eliminates the need for any paper processes.

There are several different types of electronic signatures. They include:

• Biometric signatures, such as fingerprint or retina scans.
• Digital signatures, which use private keys or certificates.
• Signature capture devices, such as tablets and signature pads.
• Identity verification services, which use e-mail validation.

Numerous vendors provide hardware and software to implement these systems.

Digital signatures are typically the easiest to validate and the most common approach used by employers. Digital signatures are generated using a form of asymmetric cryptography that makes use of a pair of keys—a public key and a private key. The public key may be distributed to anyone who needs it, while the private key is kept secret. Signatures can be generated only by the owner of the private key, while anyone with the sender’s public key is able to verify that signature.

The use of electronic signatures in HR is commonly found in:

• Recruitment, for applications or reference consents.
• Onboarding, for new-hire paperwork, tax forms and I-9s.
• Performance management, for appraisals or disciplinary actions.
• Benefits administration, for enrollment forms and open enrollment communications.
• Payroll, for timekeeping records.

Employers should understand that electronic signatures are easier to forge and harder to authenticate than handwritten signatures. But it is easier to track the signatures of large numbers of employees by e-mail than by hard copy.

Employers should still rely on handwritten signatures in certain circumstances. If litigation appears likely, some experts advise employers to require an employee to sign a written warning.

However, since there is an increased acceptance of e-signatures among employees and the courts, manual signatures eventually may become the exception rather than the norm.