Getting Under Employees' Skin

A few innovative tech companies have begun implanting microchips into willing workers. Will this trend catch on in other industries and eventually replace the employee ID badge?

Wednesday, August 2, 2017
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At the beginning of this month, Three Square Market in River Falls, Wis., christened approximately 50 of its employees into the world of sci-fi. The global software design company implanted a tiny microchip between the workers' thumb and forefinger, for free, to make it easier for them to log into computers, access secure parts of the building and pay for onsite snacks.

Several months ago, the company's CEO, Todd Westby, began soliciting employee opinions about the radio-frequency identification chip that stores personal data, says Tony Danna, vice president of international development at the technology company which specializes in converting employee break rooms into mini-convenience stores by using self-checkout kiosks.

"Todd walked around and asked employees what they thought," he says, adding that the chip implants were only made available to the 85 employees at its corporate office.  "As he educated them about the chip, the number who agreed grew from two to 10 to 20 to 30 to 50."

Danna explains that the chip, which has been approved by the Federal Drug Administration, has three purposes: Employees can purchase food in the company break room using a kiosk that scans their hand to access personal account or credit card information; access secure rooms by placing their chipped hand up to a RFID reader and, in the near future, log on to their computer and password-protected sites.

According to state law, employees had to sign a notarized consent form, he says. While these chips are as easy to remove as a splinter, employees also have the option of wearing a bracelet or ring embedded with a microchip.

Although HR played a small role in the process -- gathering and storing consent forms -- transparency and education was very important when he introduced the chips via a memo, he says. The opportunity was voluntary, he says, adding that those who declined are very excited about discovering other workplace functions such chips can perform.

The chips are also boosting the company's brand by attracting techies who want to work for a company that is "pushing the boundaries with technology and trying new things," says Danna. "They love the idea that the company is thinking out of the box, even though they may not want to participate."

Although this may be the first U.S. company to microchip its employees, it's not the first overall. Danna learned about implants when traveling to Epicenter Stockholm in Sweden, a digital hub of innovation and collaboration for more than 2,000 employees at more than 300 companies.

Earlier this year, nine of Epicenter's 12 employees and another 75 from the other companies volunteered to be microchipped, says Patrick Mesterton, Epicenter's CEO and cofounder.

"Microchips is just one technology we experiment with," he says, adding that chips are the size of a small grain of rice. "The purpose of having microchips inserted is to simplify daily life by replacing frequently-used items, such as keys, key fobs, passage cards, gym cards, business cards . . . ."

This practice is so new that, besides employee consent laws, there aren't other laws governing or prohibiting the use of implants, says C.R. Wright, partner at Fisher & Phillips in Atlanta.

However, if implants grow in popularity, he believes state lawmakers will pass legislation containing employer conditions.

"Other than a potential breach of contract, there's nothing necessarily that will hold [employers] to their promises that it won't be used for other things," he says, pointing to tracking employees in the workplace as an example.

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Legislators may create laws with teeth, says Wright, mandating that microchip implants are voluntary, only perform functions identified to staff and make companies responsible for adverse consequences.

"We've seen crime where people kidnap [employees] to let them into the office," he says. "How much easier would it be to chop off someone's hand? It's just going to get worse with technology advancing as fast as it is. There are lots of areas for potential abuse and for individuals to be scared of this technology."

As a partner and head of the national labor and employment group at Drinker Biddle & Reath law firm in San Francisco, Cheryl Orr envisions cases where employees claim they were pressured into implants by co-workers or management.

"On the front end, you need to think through what types of data you'll be collecting, have a clear understanding of what will be done with that data and, just as important, how that data will be stored and safeguarded," she says. "If your safeguards aren't good and information is somehow misused or hacked, that's a potential problem."

She says no one knows how these microchips will evolve or possibly invade employee privacy.

Meanwhile, she says, bracelets or rings may make the most sense, especially for employees who object to implants due to religious reasons.

"I'm not sure it has to be under the skin," Orr says. "A bracelet or ring seems to be a nice, happy medium."

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