Microchipping employees: you could be next

Microchipping employees: you could be next
By Mike Toten on 9 August 2017
Microchipping cats and dogs works fine, but some employers have now started microchipping employees.

This article examines why they do it, and considers the issues it raises.

What’s involved

Two companies have received extensive media coverage for microchipping their employees.

Three Square Market, a US company that designs software and vending machines for work break rooms, has announced it will microchip employees on a voluntary basis from 1 August 2017. The microchips will be implanted underneath the skin between the employee’s thumb and forefinger. They are a similar size to a grain of rice. They use the same technology as for contactless credit cards and payments made via mobile devices, and will enable employees to do each of the following:
  • Open security doors at the workplace
  • Log into computers
  • Use office equipment such as photocopiers
  • Unlock phones
  • Pay for food and drinks sold at the workplace
  • Share business cards
  • Store medical and health information
Media reports have claimed that 50 of the company’s 80 employees agreed to be microchipped within the first week. The employer pays for the implant, which costs about $US300 per employee.

Swedish technology company Epicenter began microchipping employees in similar fashion about three years ago. It is mainly used to give employees access to buildings and work equipment without having to carry keys, ID cards, credit cards, etc, or to remember individual passwords and PINs, but reports say that it can also be used for booking/paying airfares, access to local gymnasiums, etc. About 150 employees volunteered to be microchipped. 

The Epicenter chips can also be programmed to hold contact information and interact with smartphone apps.

Microchipping humans has also been used outside workplaces. Some examples:
  • A UK bank has introduced iris recognition on its mobile banking app.
  • A European railway gives customers the choice between a chip implanted into their hands or a normal paper ticket.
The technology could also be extended to other purchases, and in theory could become a replacement for passports. 

Concerns about misuse

Supporters and installers of the technology argue that it is more convenient than having to carry around and/or remember multiple access tools and data (eg keys, passwords). Because access to buildings and work equipment is quicker, requiring only a hand wave, it can also be argued that productivity and efficiency will be improved via better time management and fewer delays.

However, critics of microchipping employees have also emerged. Their concerns usually have a “big brother” theme, expressing fears that employers will become tempted to misuse the technology despite the assurances of adequate “encryption” and other safeguards.

The main concerns can be summarised as follows:
  • There have been reports of successful hackings of the same type of technology used to microchip employees. It has allowed phones to be unlocked without passwords, scanners to be bypassed and fingerprints to be copied.
  • Although the purposes the technology is intended for have so far been “legitimate”, the potential appears to exist for it to be extended to cover more invasive functions such as tracking employees, for example monitoring the length of employees’ lunch breaks and bathroom visits. It is claimed, however, that the employee chips currently used do not contain any GPS function.
  • Employees’ privacy may be breached by the chips’ ability to collect and store a large amount of personal information about employees that should be irrelevant to their jobs, but nevertheless could be accessed by unscrupulous employers. 
  • The US Food & Drug Administration (a US Government authority) has also noted “rare” cases of microchipping humans resulting in infections, although the FDA has approved the use of microchipping for medical purposes. 

What about Australia?

Historically, the law has usually played catch-up with developments in technology, and that appears to be the case again here.

If an employer was to microchip employees, even if they genuinely volunteered to have it done, the employer would have to comply with legislation covering the use of surveillance devices and protection of employees’ privacy.

For example, the provisions of the NSW Surveillance Devices Act 2007 apply to installation and maintenance of “tracking devices”, which includes “any electronic device capable of being used to determine or monitor the geographical location of a person or an object”. However, an employer can use such a device for a “lawful purpose”. From this, it could be argued that microchipping an employee to allow access to a workplace or work equipment would be a lawful purpose, but tracking the movements and location of an employee would not be lawful.

For any employer contemplating microchipping employees, the following steps are recommended:
  • Conduct a cost/benefit analysis. Are the benefits likely to exceed the cost of implementation? Note that if the process is voluntary (which it should be), you will still need to maintain the “old” systems for employees who decline.
  • Seek employees’ views on the issue before making a decision. Assess whether the organisation culture is robust enough, eg there is a high degree of trust between management and employees.
  • Be upfront with employees about what the technology will be used for, and ensure the scope of data collection and use cannot go beyond that. Otherwise, trust will be quickly undermined and legal exposure may arise.
  • Ensure there are adequate protections against misuse, eg by hackers.
  • Ensure the installation process cannot pose any risks to employees’ health and safety. Similarly, ensure there is a safe removal process if an employee leaves the organisation or changes his/her mind.


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