CFPB Issues Guidance With Aggressive Interpretation of FCRA Applicability to Employee Monitoring and Screening Tools
The Consumer Financial Protection Bureau (CFPB) recently issued guidance that takes an aggressive position regarding the scope of the Fair Credit Reporting Act (FCRA) as covering certain employee monitoring and assessment tools used for hiring and to gauge employee productivity. This development affects virtually every employer using third-party vendors for employee screening, monitoring, or assessment. Quick Hits The CFPB’s recently issued guidance on the Fair Credit Reporting Act affects virtually every employer using third-party vendors for employee screening, monitoring, or assessment. The guidance serves as a reminder for employers that gather third-party information to vet job applicants to consider whether their third-party vendors’ practices trigger FCRA requirements. This guidance also highlights ongoing regulatory trends toward increased scrutiny of workplace monitoring and AI-powered assessment tools. What Makes a Tool Subject to the FCRA? The CFPB provides a (facially...