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In response to the use of “unmonitored digital tracking and opaque decision-making systems,” the Consumer Financial Protection Bureau issued guidance Thursday warning companies that any third-party consumer reports they use to monitor the workers. must be used with the consent of the worker.

The reports criticized by the CFPB “increasingly go beyond background checks,” the federal agency said. This could include, for example, requiring workers to download an app on their phone to monitor their behavior and evaluate their performance.

Other examples provided included reports purporting to predict worker behavior, such as the likelihood of organizing a union or leaving a job; programs to reassign workers based on performance, availability and historical data; automated warnings for disciplinary actions that may not be subject to direct human oversight; and reports that analyze workers’ social media accounts.

The guidance reminds employers to follow the rules of the Fair Credit Reporting Act, which require transparency about the data used by these tools in any adverse decisions and allow workers to challenge inaccurate information.

Consent and transparency are key aspects of FCRA compliance. Workers may not even know that this information is used by employers, the CFPB said, and many are unaware of exactly what is being collected.

“These protections are essential in an era where worker data is increasingly commodified and used to make critical employment decisions,” the office said.

Notably, critical information provided by these reports “is often false,” the office said.

While the CFPB’s new guidance focuses on new digital tracking systems, background checks – which are an integral part of many employment processes and are also subject to the FCRA – can also often be inaccurateaccording to a study published in Criminology This year. According to the study, credit checking companies tend to be lightly regulated and often include errors in their reports due to incorrect spelling of names, transposed date of birth numbers, or the existence of common aliases. .

ADP, in particular, was confronted multiple lawsuits alleging that its background checks contained wildly incorrect information that derailed job offers and opportunities for candidates. TransUnion also settled a lawsuit in October following an improper background check.