Because of new federal laws, anonymous employee complaints are now more important than ever
Sarbanes-Oxley and the new found importance of anonymous employee complaints
An anonymous employee complaint used to be easily dismissed– because they’re hard to follow-up, the unsigned employee complaint in the suggestion boxes, you don’t know who left it there, you can’t follow-up with them. However, the Sarbanes-Oxley act created some more credibility for them.
Technology-enabled whistle blowing
There is now a requirement( Sarbanes-Oxley Act) that publicly traded companies to establish a mechanism for anonymous employee complaints to their audit committees about anything to do with accounting improprieties. There now are third party telephone hotlines and internet enabled services. These hotlines and web services allow you to follow-up with the person making the employee complaint.
If somebody sends in an email, the provider will send back a code saying, “We received your email. Please check back on this site and please enter this code and we may have follow-up questions for you.” The employee will know that they’re the only one who has that code, that their anonymity is still protected. They may feel protected from retaliation.
So what’s interesting is that technology now is enabling some back and forth with anonymous whistleblowers that was not really possible before these hotlines and web-enabled services came into being.
Some privately held entities are establishing anonymous employee complaint mechanisms even though they’re not subject to Sarbanes-Oxley. For example, think of a non-profit that is dependent on donor support for its existence.
Well, it may want to be able to say to its donors, “We protect your money so carefully that we have set up this anonymous procedure for anybody who has a concern about abuse of donations to raise it”. And that can go a long way towards helping donors feel good about the money they’re donating.
Overseas whistle blowing and employee complaints
Overseas issues, bear in mind everything I’ve just talked about is about the US. Foreign countries have privacy laws which changed almost everything. Those privacy laws govern the collection and processing of personal data which includes employee data. So the European Union, Canada and Argentina — these are just some of the many countries that now have privacy regimes that you need to be careful about.
So very important caveat if you’re dealing with an overseas employee, you need to get guidance from a lawyer well versed in the laws of that overseas place because you can inadvertently run afoul over some privacy laws just doing what would be a routine investigation in the United States.
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