Employers Using Continuous Monitoring Services Have Important Compliance Considerations

Employers using continuous monitoring services that alert them to changes in the credit and criminal histories of their employees may have potential liability under the Fair Credit Reporting Act (FCRA), according to the article “Employers Need to Grasp Risks of Continuous Monitoring Services” on the Bloomberg Law® website.

The article on the Bloomberg Law® Daily Labor Report® written by Sidley Austin LLP attorneys Margaret Hope Allen and Tiffanie N. Limbrick examined when the FCRA might apply to employers who use continuous monitoring services and what these employers should consider before contracting for these services.

“Employers are increasingly exploring continuous monitoring services that address workforce risk by providing alerts on changes in an employee’s credit history, criminal background, arrest history, litigation history, and even the employee’s inclusion on a terrorist watch list,” Allen and Limbrick explained in their article.

“On first blush, this type of service may appear to implicate the Fair Credit Reporting Act (FCRA) and related state laws. But some continuous monitoring services take the position that they are not subject to the FCRA and prohibit employers from using their services in ways that implicate the FCRA,” Allen and Limbrick wrote.

The article examined whether the FCRA, a federal law regulating background checks for employment purposes in the United States, applies to continuous monitoring services and whether these services are considered a “consumer report,” the official term for a background check report under the FCRA. FULL ARTICLE