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Guest post by: Barbara Weltman Become an Author

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Privacy is a growing concern for small businesses that want or are required to protect confidential or personal information of employees and customers. What are your responsibilities about privacy, and what can you do to ensure privacy?

Employee information

Adhering to privacy requirements for employee information can help you avoid penalties, litigation, and other problems. Employees' personnel records should be kept confidential so that others within your company cannot view the information. In this age of identity theft, special care should be used to guard employees' Social Security numbers (e.g., do not use them as employee identification numbers).

Medical records. Under the Americans with Disabilities Act (ADA), any medical examinations or information must be kept on separate forms and in a separate file from employees' other records; this information should be kept confidential. Learn more about privacy rules for medical records. Watching and listening to employees, including reading company email, is allowed; computers and phones are company property and used on company premises. Of course, information learned from surveillance should be kept confidential.

Surveillance. What employees do on their own time may be none of an owner's business. A complaint to the NLRB by a Teamster worker who was fired for posting negative remarks about her employer has been settled in her favor. Tread lightly when viewing employee postings on social media sites through their personal accounts.

Misconduct investigations. The Fair and Accurate Credit Transactions Act (FACTA) allows employers to hire third parties to investigate employment-related misconduct without having to give notice to the employee who is the subject of the investigation.

Customer information

Customers also have certain privacy rights; companies, including small businesses, are required to take steps to protect these rights.

Credit card information. There are a number of requirements for companies that collect customer credit card information:

• Businesses must maintain the privacy of customer data and to notify them when there has been a security breach. There is no exemption from this rule for small businesses.
• Companies that obtain credit reports are subject to an FTC disposal rule requiring the information to be destroyed or rendered unreadable.
• Business records that include customer information (even without credit reports) may also be subject to proper disposal rules; 27 states have such a requirement.

Privacy statements. You should create a written statement telling customers what you will and will not do with information you collect from them. The privacy statement should be displayed on your website.

Resources to help with privacy statements:

• Microsoft has tips on creating a privacy statement.
• Google "privacy statements" to read the statements from some of the top corporations in the United States.
• TRUSTe can help you create a privacy statement, which entitles you to display a privacy seal as an assurance to your customers. (You can listento my radio interview with Fran Meier, CEO of TRUSTe, at wsRadio.com's Build Your Business Radio's page.)

Congressional action. There are pending bills designed to create online customer privacy. These bills would have a "do not track" feature for online ads. The Federal Trade Commission (FTC) and many pro-privacy groups including the Consumers Union and the Electronic Frontier Foundation are supporting these measures on the belief that many consumers are unaware that they are being tracked.

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