Big Brother or Big Benefit? Weighing the Option of Microchipping Your Employees

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A Wisconsin tech company made news in August 2017 for implanting microchips into the hands of willing employees. While it’s certainly worth keeping an eye on this technology and its uses, early adopter employers face many technological unknowns, employee wariness and potential liabilities (not to mention the expense).

Benefits for Employers

Enhancing company security and employee safety. Implanted chips can’t easily be lost, stolen or loaned, making facilities more secure from outsiders. If they track location, chips can provide accurate employee location information to help resolve theft or misconduct investigations or to find employees in the event of a weather emergency or other workplace safety incident.

Refining time clock procedures and wellness programs. Chips could help ensure that employees are being paid for all time worked, because they could be more accurate than standard time clock or “badging” payroll approaches. Badging technologies leave open the possibility “tailgating” — entering a facility through a secured door by closely following someone who has “badged in” — which hinders accurate payroll information and attendance tracking. Properly used, the chip could offer employees feedback on health metrics as an enhancement to a company wellness program.

Improving recruiting competitiveness. Offering chip alternatives may enhance companies’ reputations and recruiting opportunities if candidates view them as being on the leading edge. In particular, tech-comfortable millennials may be drawn to the idea of entering facilities, paying for food in a company cafeteria and conducting other transactions without carrying separate badges, credit cards, etc.

Communicating With Employees

Before deciding whether to receive a chip, employers should clearly communicate:

  • That implantation is voluntary and those who do not participate will have the same employment privileges and conditions
  • When and how the chip will be implanted
  • How the chip could be removed (voluntarily) if the employee leaves the company and whether employees can ask for removal at any time, at company expense
  • Exactly what the chip can monitor and how information will be used
  • Security measures being taken to prevent outside access to data collected
  • Any health risks and whether to consult a health care provider first

Privacy Concerns

A chip program would need to address employees’ reasonable expectations of privacy. Employers should be forthright about whether and what monitoring would take place outside of work hours and activities, especially if the chips track location.

Medical information that chips could collect is a key privacy concern. The Americans With Disabilities Act (ADA) prohibits employers from making post-employment medical exams or inquiries without a specific, well-documented and job-related business necessity, so employers should not monitor individual medical information from chips. Even for purposes of employer-sponsored wellness programs, employers may only view employee medical information in aggregate form that does not disclose individuals’ identities. If the wellness program is part of the employer’s group health plan, Health Insurance Portability and Accountability Act (HIPAA) privacy, security and breach notification protections apply.

Other Employer Liabilities

In addition to data privacy concerns, including the possibility of data breaches, employers using such chips face the risk of knowing too much. If the chips collect data that is not relevant to employment decisions, and then actually or allegedly misuse that data, it could lead to discrimination claims. Microchipping could hurt recruiting if potential candidates perceive the company as a “big brother” employer. Employees who consent to implantation may later say they felt pressured to do so against their will or were not properly informed about the risks – and claim coercion.

The chips also present possible medical issues, such as infection or fear of cancer, as well as technological risks. How will an employer deal with chip malfunctions or technological advances that make the chips obsolete?

Alternative Options

Before jumping on the microchipping trend, employers should consider less invasive alternatives such as fingerprint recognition devices, “smart” badges that employees keep with them at work (which could also be used for wellness program activity tracking) and vehicle GPS tracking for field personnel.

Thomas J. Posey, Partner
Faegre Baker Daniels LLP
311 S. Wacker Drive, Suite 4300
Chicago, IL 60606, USA
Main:  (312) 212-5500
Direct:   (312) 212-2338

Susan Kline

Susan Kline focuses her practice in the area of employment law. She advises clients on a variety of employment-related matters and represents employers in state and federal court and before the EEOC and other state and local agencies. Susan also provides counseling, training, and policy advice and review services, including on issues of workplace privacy and protecting employee data. Susan previously worked as a chief financial officer and vice president of human resources for a trade association and its for-profit subsidiary, which included providing human resources management support for the association's member organizations. She gained hands-on experience in such matters as supervisor training, employee discipline and discharge, employee complaint resolution, personnel policies and procedures, and employee performance management.

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