Prepared Remarks of CFPB Director Rohit Chopra at the Joint Field Hearing with the Department of Labor on Worker Tracking

Good morning. It’s a pleasure to be here in East Lansing with Acting Secretary Su and all of you. I’m especially grateful to Janella James and the Michigan Nurses Association for hosting us today.

Today, the Consumer Financial Protection Bureau is issuing a policy to deal with the tracking and surveillance of people in workplaces around the country. We are making clear that employers that traffic in data about workers and make decisions – including hiring and firing – using third-party scores based on tracking must adhere to federal protections.

Throughout the country, people have reported to me how they must wear a device or install an app that scrutinizes their every move. Many people wonder, “What is this being used for?” “Is the information being sold?” And so much more.

With the rise of artificial intelligence, the data harvested about us can be used to power models that score us and put us into different categories. This data, the dossiers assembled about us, and the algorithmic scores about us may be sold for profit.

I have serious concerns about how background dossiers and reputation scores can be used in hiring, promotion, and reassignment. If an employer purchases a report that details whether a worker was a steward in a union, utilized family leave, enrolled their spouse and children in benefits programs, was cited for poor performance, or was deemed to be productive, this can raise serious issues about privacy and fairness. And if this information is converted into some sort of score using an opaque algorithm, that makes it even more suspicious.

In the healthcare context, consider a nurse required to wear a badge that tracks their movement throughout their shift. A hospital might hire a monitoring company using AI to track metrics like time spent on patient care, by noting each time a nurse enters and exits a patient room. But that could fail to capture the reality and complexity of nursing – missing the time when the nurse is discussing symptoms with a colleague or when answering questions from a patient’s family. If those incomplete data points are transformed into a “performance score” by the tech company, it could create an inaccurate assessment that would affect the nurse’s career. The nurse might miss out on a promotion at the hospital. And if the nurse applies for a new job at a competing hospital that uses the same monitoring and tracking vendor, the nurse might get a lower salary offer – or may not get the job at all – if that vendor is using flawed data.

At the CFPB, we are no stranger to the big business of companies making big money on peoples’ data and the algorithmic scores they create about us. Our agency is responsible for policing big conglomerates like Equifax, Experian, and TransUnion, as well as other companies that sell background dossiers and scores. These companies must follow a law called the Fair Credit Reporting Act, which protects people from abuse and misuse of background dossiers and scores created about them.

But, guess what? The Fair Credit Reporting Act doesn’t just cover reports and scores assembled and sold for banking and lending. The same law protects us when it comes to many other types of background reports, checks, and scores, including employment background reports.

The CFPB’s issuance outlines how modern-day tracking reports used by employers must follow the Fair Credit Reporting Act. American workers have certain crucial rights when companies use employment dossiers.

• First, workers must consent when employers purchase these reports for use in employment contexts.
• Second, if an employer relies on these dossiers to take an adverse action against a worker—such as firing, denial of a promotion, or reassignment—they must provide a detailed explanation to the individual.
• Third, when a worker disputes inaccurate, incomplete, or unverifiable information, companies must delete or correct it.
• Finally, employers cannot misuse worker reports for illegal purposes, such as selling it on the open market or using it to market financial products to workers.

These transparency and accountability protections explicitly extend not only to hiring, but also to ongoing employment decisions such as demotions or reassignments.

In short, workers are protected not just by federal labor law, but other fair dealing laws. President Biden and Acting Secretary Su have urged federal agencies to use the laws on the books to make sure the economy is not rigged against workers. For example, the Federal Trade Commission is taking action to ban abusive non-compete agreements which can block people from better jobs with higher pay.

At the Consumer Financial Protection Bureau, we will be working to root out violations of consumer protection laws, including those that protect people while at work. In addition to today’s policy on protecting people when it comes to worker tracking, we are also working to end junk fees that drain paychecks and family budgets, and to address risks posed by so-called training repayment agreements, better known as TRAPs. We have put forth reforms to deal with paycheck advance loans. And we are watching for violations when it comes to protections on cards used to access payroll and tips.

In the last few years, the CFPB has taken actions that have recovered billions of dollars from companies that cheated American families and made people whole. We have more to do alongside Acting Secretary Su and her team to make sure that American workers are not coerced by spying and surveillance, are treated with respect, and can build a secure financial future for their families, particularly as new technology reshapes the workplace.

I know the Acting Secretary and I look forward to our discussion to identify more ways we can support workers using every law on the books.