CFPB speaks up on employee surveillance

Employers that want to digitally track employees better watch themselves.

Oh, and employees? Hold on to your mouse jigglers.

The Consumer Financial Protection Bureau (CFPB) said in late October that companies using algorithm scores and surveillance-based AI to keep tabs on employees must treat the tech like a third-party consumer report and follow Fair Credit Reporting Act (FCRA) rules.

“Workers shouldn’t be subject to unchecked surveillance or have their careers determined by opaque third-party reports without basic protections,” CFPB Director Rohit Chopra said in an agency statement on Thursday, Oct. 24. “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 long-standing consumer protections apply to these new domains just as they do to traditional credit reports.”

What’s FCRA? FCRA, enacted in 1970, regulates privacy and fairness practices for credit reporting agencies gathering personal information. Under FCRA:

• You must be told if information in your file has been used against you.
• You have the right to dispute incomplete or inaccurate information.
• You must give your consent for reports to be provided to employers.
• A consumer reporting agency has limited access and may provide information about you only to people with a valid need.

The same protections of transparency, limitation, and consent are “essential in an era where worker data is increasingly commodified and used to make critical employment decisions,” the CFPB said last Thursday.

Reporting remotely. The CFPB’s Thursday memo cited an example of some employers requiring workers to install behavior-monitoring apps on their personal phones. The New York Times in 2022 studied how digital productivity monitoring had expanded to a range of industries and professions, including radiologists, architects, lawyers, and grocery cashiers. The Times listed Amazon, Kroger, JP Morgan, and UPS among others who use monitoring tech on its employees.

A February 2024 study from Forbes Advisor and market research company OnePoll surveyed 1,000 remote and hybrid employed Americans and found that 43% of workers acknowledged that their employers track their online activities during work hours. Twenty seven percent of respondents said they would likely quit their job if their employer decided to monitor their online activity.

The Harvard Business Review shared results that same month from its study determining that employee monitoring “for control purposes” led to greater instances of “deviant behavior” like tardiness and inattentiveness. (The deviance diminished when supervisors used the data in developmental, non-punitive purposes like for feedback, however.)

The CFPB’s guidance is to minimize employer encroachment, writing, “These protections are essential in an era where worker data is increasingly commodified and used to make critical employment decisions. By enforcing these rights, the CFPB aims to ensure that workers have control over their personal information and are protected from abuses. The CFPB will be working with other federal agencies and state regulators to ensure the responsible use of worker data.”