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March 2023

Key Takeaways from the Consumer Financial Protection Bureau and National Labor Relations Board Recent Agreement

The Consumer Financial Protection Bureau ("CFPB") and the National Labor Relations Board ("NLRB") have signed a Memorandum of Understanding ("MOU") creating an information-sharing agreement between the two agencies to address what they state are two areas of immediate concern: employer surveillance and employer-driven debt.

The key takeaway for employers is that while the agreement creates no new obligations, it is aimed at helping the CFPB and NLRB to increase public awareness of potential work place violations of employee rights as well as enhance the enforcement of already existing federal consumer financial protection and labor regulations.

Specifically, the agencies are concerned about protecting employees who are required to pay for employment-related training and equipment. Second, is the use of tracking and work productivity software and how this data is disseminated and used, i.e., are the companies that collect data selling it to third parties such as financial institutions, retailers, insurers, and/or others?

As noted above, federal and state laws, including the Fair Labor Standards Act, Occupational Health and Safety Act, Fair Credit Reporting Act, and California's Wage Laws and Wage Orders, govern what equipment an employer must provide and maintain and what data can be collected and how it must be protected. 

As a practical matter, employers should already be in compliance with these rules. 

  • Tracking programs (for example, on delivery vehicles and handheld devices) should shut off at the end of the workday.
  • Employers should have policies and procedures protecting employee and consumer data, and data cannot be sold without the employee's knowledge or consent.
  • Employers providing mandatory training to their employees must pay for time spent by non-exempt employees in training. Time dedicated to training by exempt employees is also considered work time, but is not compensable separately from the employee's salary.
  • For mandatory training provided by an outside vendor, the employer has to pay non-exempt employees for the time they spend training as well as the cost of the training.
  • Employers should always pay for required Personal Protective Equipment ("PPE").  Other equipment needed, with few exceptions, should be paid for and maintained by the employer.  When an exception applies, prices charged to an employee for equipment purchased through the employer should be competitive, and related policies should be justifiable and fair.

Employers, particularly those in the rideshare, delivery, ARM, sales, distribution, building trades, and automotive repair sectors where employees may be required to buy some of their own tools or equipment, as well as employers using location and activity tracking software, even intermittently should carefully review their practices with experienced legal counsel to ensure that they do not run afoul of federal or state laws. Gordon Rees Scully Mansukhani's experienced labor and employment attorneys are particularly well suited to advising employers in all states and industries on those state and local variations through the firm's unique 50-State Platform.

The latest cooperative action of the CFPB and NLRB pursuant to their recent MOU will likely result in more information becoming available to workers about the nature and extent of the laws preventing employer abuses in these particular areas.  

Employment Law

Jim McMullen

Employment Law