Employers may be determined to keep a close eye on their employees, but the Consumer Financial Protection Bureau (CFPB) is keeping an even closer watch on the employers themselves. The CFPB has released a new guide on unchecked worker surveillance tactics, asking employers to prioritize full transparency in all its actions. The CFPB issued a warning on worker surveillance, encouraging employers to adhere to the Fair Credit Reporting Act (FCRA) rules diligently.
This means that while employers are allowed to monitor employees, they must keep workers informed on all the mechanisms being used and allow them the right to dispute inaccurate information. CFPB’s warning to snooping companies is well timed considering the recent rise in employee monitoring systems that have kept pace with the growth of the work-from-home model.
CFPB Takes on Unchecked Worker Surveillance–Lead with Consent and Transparency
The CFPB does not intend to curb employee monitoring entirely as these systems provide employers with some control over workers and help them ensure that they remain on track with their work. Instead, the CFPB takes issue with unchecked worker surveillance where employees are unaware of the monitoring and are tracked without their consent.
Secretive monitoring is a breach of trust between employers and employees that can cause irreparable damage to how the two work together. According to the report “companies using third-party consumer reports—including background dossiers and surveillance-based, “black box” AI or algorithmic scores about their workers—must follow Fair Credit Reporting Act (FCRA) rules.”
Third-party consumer reports can be beneficial to employers in terms of reassigning workers where they can be most efficient and simplifying a manager’s task of grading the employees’ performance and behavior, but these can also be misused. These reports, when used to predict worker behavior, may lead to inaccurate, incomplete results. Using them to monitor an employee’s social media activity could be construed as an invasion of privacy.
Decisions on hiring and job assignments based on these reports can put the worker at an unfair disadvantage, and that’s why the CFPB is warning companies against the callous use of these systems.
The CFPB Recommends Following the Fair Credit Reporting Act for Consumer Reports
Adding his thoughts on setting limits on workplace surveillance, CFPB Director Rohit Chopra said, “Workers shouldn’t be subject to unchecked surveillance or have their careers determined by opaque third-party reports without basic protections. The kind of scoring and profiling we’ve long seen in credit markets is now creeping into employment and other aspects of our lives. Our action today makes clear that longstanding consumer protections apply to these new domains just as they do to traditional credit reports.”
The FCRA provides very clear guidelines on points to consider when exploring workplace surveillance systems for any organization. The guidelines include:
- Seeking Consent: Workers should be aware of where, when, and what type of data is being collected on them. When employers purchase consumer reports on employees, they need to seek consent before making the purchase.
- Maintaining Transparency: Employees need to be allowed to access the information on their files and they also need to be made aware of how this information is to be used. When decisions are made based on the report, especially ones that will affect the employee adversely, they should be made aware of it.
- Accommodating Disputes: No data collection system is perfect and employees should be allowed to file a dispute when they feel the information is inaccurate or incomplete. Based on the employee’s feedback, employers should make a concerted effort to check and correct the report.
- Setting Limits on Data Collection: The data collected by the organization needs to be protected and used appropriately by the employer. Only authorized individuals should have access to the information and it should not be misused or shared externally.
The CFPB’s attention to unchecked worker surveillance should not be ignored and employers need to be very careful about how and when they monitor employees and what data they collect.
