2020 has been less of a paradigm-shifting year than an accelerator. The COVID-19 pandemic accelerated underlying digitization and automation trends throughout our society. You can see the evidence of this in the healthcare industry and how routine doctors’ visits have moved online. Additionally, the explosion of online shopping, the growth of virtual learning, and the way we do business are no exceptions.

By now, you have seen countless headlines on how COVID-19 has altered the way we work. Most of those articles have focused on our mass exodus from the florescent bathed gray cubicles into converted workspaces that pull double duty as dinner tables and guest rooms. The move from the office to the home is one of the most dramatic and visible business transformations of 2020. There have been many more mundane changes that have left considerable implications in our businesses. One of those is the growth in the adoption of e-signatures.

E-signatures have been legally binding since 2000, but the adoption of the technology has been slow. The COVID-19 crisis has accelerated the implementation of e-signatures in many industries. However, many of our processes were designed for in-person interactions.

Since it is ill-advised to gather face to face due to the pandemic, obtaining signatures for contracts and forms became a massive challenge for businesses. Processes and platforms had to be updated to accommodate this new workflow. Luckily, we already had an underutilized technology and government standards ready before the onset of this crisis, making the move to e-signatures a lot easier for organizations and teams. This move has turned e-signatures from a technology many businesses never thought about into a necessity to stay competitive. Once integrated into a team’s process, organizations have found that it allows them to be more flexible. Also, it shortens the time it takes to process forms and finalize contracts.

E-signature compliance standards

The law governing interstate commerce is the E-Sign Act. The law passed by the U.S. Congress in 2000 established that electronic signatures carry the same legal status as physical signatures. This means that e-signatures also have the same legal scrutiny as paper signatures. This makes it essential to understand the standards delineated in the E-Sign Act, so your documents are legally binding.

Requirements and best practices

Intent to sign

Like paper signatures, e-signatures must show clear intent to sign. The signing parties must affirm their intention to sign the document electronically. This act can take the form of drawing with a mouse, typing in their name, or clicking a button that affirms their intent.

Consent to do business electronically

The signing parties must express or imply their intent to do business electronically. This is routinely done with an opt-in/opt-out dialogue box or by including verbiage in the document that, by signing, all parties agree to do business electronically and that e-signatures are as valid as a handwritten signature.

Clear signature attribution

The signature must be able to be attributed to the correct party. This is routinely done by capturing the metadata associated with the signing party, such as device IP and signature timestamp. Email communication records are also routinely stored as part of the audit trail.

Association of signature with the record

No matter what form the signature takes, it must become part of the document and always be associated with that record.

Record retention

The E-Sign Act requires that electronic signature records and documents be accessible to all parties entitled to access the record. The record must be in a form that accurately reproduces the record.

Once a technology has been adopted and processes created, procedures rarely go back to how they were. As more people experience the time saving and flexibility benefits that e-signatures provide, we can expect the adoption of e-signature technology to accelerate. The technology is easily accessible to most businesses, and the legal framework exists to make it a viable solution. This means that the competitive advantage offered by e-signatures will not last long. It will soon move to become an expected standard offering. To learn more about business trends and HR updates, sign up for our newsletter today.