The law generally gives an employer a great deal of control over the workplace. It's usually possible for an employer to take steps to set reasonable limitations on an employee's expectation of privacy. But an employer is still faced with big issues on potential liability exposure in this area, so great care must be taken in order to assure that privacy issues are handled properly. It's also important to keep in mind that issues can come up not only with employees but also with job applicants.
The best thing an employer may be able to do is to have written policies in place that clearly explain the employer's position on these issues. Such policies should be drafted in consultation with legal counsel.
The Fair Credit Reporting Act ("FCRA") prohibits credit reporting agencies from giving credit rating information about an employee to a prospective employer without the employee's consent. But if the employee's work would include handling financial matters or require a bond, an employer may be reasonable in asking for this information. And an employer can certainly ask for a prospective employee's consent to do a credit check and see what the response is.
Laws on obtaining arrest and conviction records vary greatly by state. Again, there may also be a distinction as to whether an employer can ask for the information, as compared to whether or not an employee is required to give it.
Currently, federal employees and employees in a growing number of states are protected against genetic discrimination due to predispositions for certain diseases. Legislation has also been introduced in the U.S. Congress that would forbid employers from requiring genetic testing of any potential employees. Inevitably, some form of this law will likely become law at the federal level.
Lie Detector Testing
The Employee Polygraph Protection Act ("EPPA") prohibits employers from requiring prospective employees to take lie detector tests, unless they would be regularly handling drugs or are in the security business (such as armed guards). Polygraphs aren't considered scientifically reliable, in any event.
There are no federal laws prohibiting employers from administering personality tests to prospective employees, but some states now limit the circumstances under which these tests can be required.
Under the Americans With Disabilities Act ("ADA"), an employer may not ask disability-related questions until after making a conditional job offer to the applicant. Employers may, however, ask an employee to perform specific job tasks as part of the job interview. A disability may or may not affect how well an employee can perform on the job.
In most states, employers can drug test prospective employees who would be hired into safety-conscious positions once the employee has been offered a job, as long as all applicants for that position are uniformly tested and a certified lab does the testing.
Drug testing for current employees is somewhat stricter. In some states, employers can't do random drug testing in positions that don't involve safety concerns, but must have a specific concern about a specific employee in order to test for drugs. Other states allow random testing of current employees, regardless of specific suspicions.
Questions Regarding Marital Status and Children
It's illegal for potential employers to ask about a prospective employee's spouse or children, but questions regarding availability to work specific hours and travel on business are appropriate, if asked properly.
E-mail and Computer File Monitoring
Many employers routinely monitor employees' e-mail messages, which is probably okay so long as written polices are in place that give the employer the specific right to do this.
Under the Electronic Communications Privacy Act ("ECPA"), an employer monitoring telephone calls for business purposes must hang up as soon as it becomes obvious that a call is personal, unless the employee knows the call is being monitored and consents to it.
Searches and Camera Surveillance
In some states, an employer may have the right to search an employee's desk if it isn't locked, especially if a policy is in place and employees have been given notice that searches may be conducted.
Some states prohibit camera surveillance in the workplace, unless there are specific security issues (such as in a bank).
Specific laws vary greatly by state, so you should consult with legal counsel before undertaking any actions that may infringe on an employee's privacy.