The Consumer Financial Protection Bureau (CFPB) has begun cracking down on companies using workplace surveillance tools. According to the Bureau, many companies relying on such means during the hiring and firing processes must comply with the Fair Credit Reporting Act (FCRA). However, a comment from the CFPB suggested that many companies have not complied.

The White House’s Office of Science and Technology Policy recently issued an informational request to the CFPB. The Office sought clarification about the automated tools employers used when monitoring and evaluating their workers. In March 2023, the CFPB suggested that the FCRA applies to today’s data surveillance tools. This comment indicates that their position remains steady.

Many know the FCRA for protecting consumer reports. In this situation, the FCRA defines consumer reports as “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for… employment purposes.” Thus, the FCRA does become relevant in workplace surveillance.

Many companies started using surveillance tools to measure employees’ efforts since the recent increase in remote work. For example, employers use these results when deciding to retain and promote employees. However, the CFPB warns that “automated technologies may produce incomplete or inaccurate information or exacerbate biases.”

The CFPB consequently maintained that the FCRA applies to workplace surveillance tools. As such, the FCRA applies to the data that leads to choices affecting hiring, firing, promotions, transfers, compensation, and retention. The CFPB also voiced concerns about the data reaching the data broker market. The Bureau believes that could impact consumers in various ways, such as background screenings for employment.

These concerns led to the CFPB’s interest in ensuring workplaces comply with the FCRA. As such, companies must remember their responsibility to comply with all applicable laws concerning these workplace surveillance tools. The Bureau also worried about whether the suppliers of these tools have made continued efforts to comply.

Employers should review their hiring and workplace surveillance tool policies to ensure compliance. This review should include how they run background checks, which the FCRA considers a consumer report. The best way to ensure compliance in performing background checks for employment is to work with an experienced screening provider.

JDP makes background checks easy and reliable. Speak with a sales representative today.

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