Agency Flags Compliance Issues For Employers Using Third-Party Worker Data

New guidance from the Consumer Financial Protection Bureau (CFPB) broadens when employer-collected data may be considered a consumer report under the Fair Credit Reporting Act (FCRA). Employers using third parties to track performance should be cautious of how they use and store this information to avoid FCRA violations.

Recent technological advances and the rise of remote work have led to a rapid increase in worker monitoring. Third-party technology companies now make it easier and more cost-effective for employers to track, assess and evaluate workers.

But the CFPB's reading of the FCRA highlights the growing complexity of data usage in employment decisions. Per the CFPB, data compiled by third-party applications could be classified as FCRA-governed consumer reports. This classification would impose significant obligations on employers, including obtaining employee consent and providing opportunities to challenge data before any adverse employment actions are