Are embedded microchips the future?

More than 50 workers at U.S. vending machine company try out devices
By Marcel Vander Wier
|Canadian HR Reporter|Last Updated: 09/15/2017
Microchips
The microchips implanted into 32M employees’ hands were similar in size to a grain of rice. Credit: Chip East (Reuters File Photo)

In August, a River Falls, Wis.-based vending machine company Three Square Market held a “chip party” that saw more than 50 workers voluntarily have microchips implanted in their hands.

The rice-sized chips were inserted between each individual’s thumb and forefinger — enabling staffers to open doors, log onto computers, run a photocopier, and purchase company snacks with a swipe of their hand.

Also known as 32M, Three Square Market has 85 workers and may be the first in North America to offer the technology already being used in Europe.

The devices come from Sweden’s BioHax International, which began selling the microchips at tech fairs in 2015.

“We want to be on the forefront of this,” 32M president Curt Giles told the Associated Press. “This is something that’s coming.”

While intrigued, HR tech experts do not expect the practice to go mainstream anytime soon in either the United States or Canada.

“I love tech but, to be honest with you, HR’s not known to be early adopters,” said Ward Christman, founder of HR Tech Advisor in West Chester, Pa.

“So the chances of it being adopted by employers — if it does — would come through finance or IT to support initiatives like lowering theft from employees or data security breaches, but not through HR... I just don’t see it.”

Background

The microchips being used by 32M operate via radio-frequency identification (RFID), using electromagnetic fields to identify stored information, according to the company’s website. The data stored on the microchip is encrypted.

The chips use near-field communication (NFC), the same technology featured in tap-functioning credit cards, and are not trackable as they are not outfitted with GPS capabilities.

In fact, the microchips can only be read within a few inches of an appropriate device, according to the company. They essentially equate to the use of a proximity card, where a unique serial number is accessed when held up to a device reader, prompting the software to perform a desired function.

The microchips are not permanent, and can be removed like a wood sliver. They reportedly cost US$300 each.

Employees wary of the implants but still desiring the RFID technology were offered wearable wristbands or rings.

Current trends

At present, microchips are not nearly as popular as biometrics — the verification of personal identity through physical attributes such as fingerprints or voice scans, according to Bianca Lopes, chief identity officer at BioConnect in Toronto.

Biometric options include facial or voice recognition, as well as iris or fingerprint scans.

Large corporations such as banks are using biometrics to take the “friction” out of employees’ lives while maintaining certainty of identity, especially when exchanging highly sensitive information, she said.

“Where we’re seeing people use biometrics is to prove the identity of the human while protecting the privacy and security of that exchange of value,” said Lopes.

If employers are concerned about security, biometric solutions are much more readily available on the HR tech market, said Christman.

“I’m sure there’s some great hardware that is cheap — that could run on Android or iPhones — that could do the same thing without having to permanently embed something,” he said.

“I just don’t see the advantages over that.”

However, the reduction of employee theft or fraud could be a benefit of embedded microchips, said Christman.

“What employers should be thinking about really isn’t how, but why,” he said.

“And whether it’s implanted or it’s a smartwatch they can clock in with... the advantage of an implant is it’s not something you’d be passing around just like a watch: ‘Hey, clock me in’ like the old-days punch cards.”

“Sometimes, people will go out of the way if it helps them with convenience. If there’s a value to the employee rather than the employer, they’ll have more likely adoption.”

But using an embedded microchip for tasks as simple as tracking the number of photocopies made by an individual just “ain’t going to sell it,” said Christman.

Privacy issues

Microchips’ continued advancement into Canada would undoubtedly face legal hurdles presented by the 2012 Ontario court case of R. v. Cole, or the Saskatchewan case of R. v. Morelli in 2010, where it was concluded that privacy is a matter of reasonable expectation in the workplace, said Ron Minken, a senior lawyer at Minken Employment Lawyers in Markham, Ont.

Other roadblocks include a possible violation of the Charter of Rights and Freedoms regarding security of person. At issue would be the invasion of employees’ privacy rights, he said.

“(In terms of) justification for security purposes, microchipping doesn’t relate to personal identifiers such as fingerprint scans or iris scans,” said Minken. “The concern is the use of it for potentially surveillance and also collection of personal information.”

“Even if that’s not the intention, that could still be the consequence.”

Future employee-related microchips could contain personal information that is meaningful, intimate and touching on the user’s biographical core. Surveillance and collection of personal data could also extend outside of the office, he said.

“It would be a tough sell to make this mandatory. Employers would have a very uphill battle to convince one that it is reasonable. I suppose if the employment agreement did provide for that before the employee began… then the employee may have a tough time to say no.

“It’d have to be a company where the consensus was that this is necessary and reasonable for the company, and it’s very tough to think of a situation where that does apply... I can’t think of one.”

Accommodation issues could also enter the equation if a worker refused to have a microchip embedded for medical reasons, said Minken.

Human resources technology should always work to protect individuals’ privacy and only be used following consent from the employee in question, said Lopes.

“I really struggle with the privacy, consent and even health (issues associated with embedded microchips),” she said. “You look at implants — people have reactions to things. I’ll be honest with you — when I read about microchips, it freaks me out.”

Embedding a microchip in someone is akin to turning them into a “walking, trackable thing,” said Lopes.

“That’s what we do to prisoners… That’s where my brain goes to. That notion really bothers me,” she said.

Way of the future?

32M does deserve recognition for its creative attempt to reduce friction in typical day-to-day actions conducted by employees, such as buying snacks or entering the office, said Lopes.

“None of us likes password cards, fobs or keys,” she said.

“Do I fundamentally believe that enterprises and HR practices are going to find ways of eliminating friction and better understanding their people (by) making their lives easier or more streamlined? For sure.”

“I think you’re going to see that happen in wearables, in biometrics. I think that’s where the industry will go.”

Microchips have not yet been tagged as the “latest, greatest” technological option for human resources professionals, according to Christman.

Artificial intelligence, bots, and machine learning remain the hot-button topics of the day as organizations ponder automation amidst the intelligence revolution, he said.

“Is it the next wave? The answer’s no. Is it a future wave? Yes. But not the next wave by any means,” said Christman.

“I don’t see any employers hoping to implement (embedded microchips). Most would be hoping to avoid it because it just sounds messy.”

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