CFPB Advises Employers to Comply With the FCRA When Using AI-Powered Employee Monitoring Reports
According to a recent policy statement issued by the Consumer Financial Protection Bureau (the CFPB), employers that purchase or use certain reports generated about current or prospective employees—including those using AI-powered technologies to assess employees’ productivity—are required to comply with various requirements of the Fair Credit Reporting Act (the FCRA), including obtaining consent from employees prior to purchasing such reports and providing notices to employees before taking adverse employment actions based on such reports. What does the CFPB’s policy statement say? On October 24, 2024, the CFPB issued its latest circular ( Circular 2024-06 ). Many employers are familiar with the FCRA’s requirements in the context of employee background checks and credit reports. Circular 2024-06 states that the FCRA also applies to the use of other types of third-party employee reports. S pecifically, Circular 2024-06 describes various types of reports generated and sold by thir...