Federal Credit Reporting Law Covers Worker Data, CFPB Says (1)

Employers must get permission from workers when using external consumer reports about them—including “black box” AI or algorithmic scores—and allow employees to dispute information used in background checks, the Consumer Financial Protection Bureau said.

Companies have increased their surveillance of workers, including using credit reports and third-party background checks, when making decisions whether to hire, demote, or fire them, the CFPB said. Companies also provide data about worker performance to third parties such as consumer credit reporting companies, the agency noted in a Thursday circular.

The new guidance is part of the Biden administration’s broader efforts to scrutinize the ...