Hidden decision-making system are also restricted under the rules
The Consumer Financial Protection Bureau (CFPB) wants to give workers some of the same protections they get as consumers, using new guidelines that protect workersfrom unfair digital tracking and hidden decision-making systems.
The guidelines remind companies that use third-party reportslike background checks and AI-based scoresto follow the Fair Credit Reporting Act (FCRA). This means employers must get workers' permission, explain how their data is used, and give workers the chance to correct any mistakes.
As companies increasingly use these tools to assess employees, the rules ensure workers have control over the data that affects their jobs and careers.
"Workers shouldn't face constant surveillance or have decisions made about their careers based on secret reports," said CFPB Director Rohit Chopra. "Just like in credit reports, protections apply to these new employment tools."
Third-party reports are restricted
The CFPBs guidelines focus on how employers use third-party reports to make decisions about workers, going beyond basic background checks. For example, some employers use apps to monitor workers' behavior, which can impact performance reviews.
Here are some ways these reports might be used:
- Predicting worker behavior: Some reports predict if a worker might join a union or quit, influencing managements decisions.
- Reassigning workers: Data on worker performance can be used to automatically assign new tasks or teams.
- Disciplinary actions: Reports may flag performance issues, leading to warnings or even firings without human oversight.
- Social media monitoring: Reports can analyze workers' social media activity, which may impact hiring or promotions.
While background checks have always been common, new technology has expanded how much data employers can track about workers. This data can be used in hiring, job assignments, or promotions without workers knowing it exists or having a chance to challenge mistakes.
Key protections for workers
The FCRA offers these key protections for workers:
- Consent: Employers must get workers' permission before using these reports.
- Transparency: If an employer takes negative action (like firing or demoting), they must inform the worker about the report and what data was used.
- Disputes: Workers have the right to correct mistakes in the reports.
- Limits: Employers can only use these reports for legal purposes and cannot sell or misuse this information.
These protections are important as more data is being collected and used to make important employment decisions, the CFPB said.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-10-24 15:38:10
