Interview with Experian’s Maxine Sweet

I recently conducted an interview with Maxine Sweet, Vice President of Public Education at Experian. The interview was geared towards getting the low-down on the often misunderstood topic of Credit Reports and their use in hiring decisions. The article was published in our quarterly newsletter, The Verifier.

Hopefully, this sheds some light on what a credit check is and how it can be used to make an informed hiring decision.

State of Georgia Mandates Verification of Work Status

Another day, another state passing a law that requires employers to verifiy their employee’s work eligibility status. (Okay, this actually took place on June 29th, but I’ve been busy blogging about other topics) This time, the State of Georgia has enacted Senate Bill 529 that mandates that all businesses the contract with the state and have 500 or more employees must confirm their employees legal right to work status with the Social Security Administration or Department of Homeland Security (DHS)for residents of other countries who are legally permitted to work in this country.

In addition to enforcing federal immigration laws, the state feels that this measure will discourage those doing business with the state from human traffiking and taking state deductions for undocumented workers.

What I find interesting about this measure is that they only require this of those that employ over 500 employees. Why? Do they trust that small employers wouldn’t hire illegals and are they just starting somewhere? Also, this should be an interesting test case for the state. What if these contractors now cannot find enough legal workers to complete the jobs the state has contracted for? Do they rescind this measure? Do they look for out-of-state contractors? Can they require out-of-state contractors to do the same? Will they eventually mandate this for all employers in the state of Georgia?

Who knows? We’ll keep following this story and update you from time to time.

Interesting UK Study on Social Networking Sites Role in Hiring Decisions

Have you noticed a recent trend in this blog of chronicaling the role Social Networking sites play in the hiring process? This story isn’t going away and neither is the trend for employers to go on-line to learn about their candidates. This study conducted in the UK by Joslin Rowe, a financial services recruiter finds that 20% of the employers polled said that they used social networking such as myspace to find out more information about their job applicants. The poll says that 68% of respondants claim to have used search engines. While I question the sampling of employers used in this study, these numbers do suggest that more and more employers are using the internet as a means to qualify candidates. And while this study reflects employers in the UK, this trend no doubt exists throughout the industrialized world.

Here’s a question though. I don’t have numbers to support this assumption (although I hardly doubt that I am far off here), but I am guessing that most people over the age of 35 don’t not have a facebook or myspace account. Using this logic, that means that this practice is being used primarily for candidates just entering the workforce up to those looking for second and third jobs. What are these employers doing with the rest of their candidates? What qualifies as information that would prevent an individual from being employed? Who decides? How is the information found verified to ensure both that it is true and accurate?

All lot of questions. We don’t have the answers. I’m sure this won’t be the last entry on this topic.

Substance Abuse in The Workplace

Check out the findings of this study on Substance Abuse in the Workplace just released by the U.S. Substance Abuse and Mental Health Administration. The study concluded that 1 in 12 U.S. workers have used illegal drugs within the last month. It would only stand to reason then that a portion of these people are using these drugs at work, which can put employers at significant risk.

Employers should take this study to heart. While many require substance abuse screening prior to employment, it is important to develop a program for random testing throughout the year. Post accident testing is also a good idea for employers.

Applicant Release & Authorization: An FCRA Must

One of the most basic mandates outlined in the Fair Credit Reporting Act (FCRA) is the need to obtain a signed release from a job applicant before allowing a Consumer Reporting Agency to conduct a search for employment screening purposes. A compliant release informs the applicant about the scope of the search, who will be conducting the search and grants the employer with the waiver they need to execute a background check. It is a simple process, but when not followed can cause all sorts of trouble for employers, as illustrated in a recent Washington Post Report about large organizations in the rail road industry’s failure to do so.

Further complicating matters was these employers failure to notify candidates when they were not hired due to adverse information being found on reports and their failure to authenticate the records to ensure that they indeed belonged to the subjects of these reports. This is another big FCRA no-no. Those who are not hired due to adverse information found on their background check must be provided with a letter that states so, that provides information on disputing their record and includes a free copy of the background check. As you can see from this article, it appears that none of this was done.

The good news is that the process for following these mandates is extremely easy. A couple quick forms and some best practices advice from your counsel and, or your employment screening provider and the problem can be fixed. Remember though that the process is supposed to fair to all parties. Employers must protect the rights of their candidates so that their right to seek a background check is also protected.

Social Networking Sites and Employment Screening Continued

The debate about the use of social networking sites as an acceptable means for evaluating potential employees continues to grow. We remain opposed to this practice, but rather than write volumes on why we reject it, thought it made sense to provide a quick illustration.

Amy Polumbo was recently crowned Ms. New Jersey and seeks to become Miss America. As most young adults do, she posted non-pornographic pictures of herself with her friends on her private Facebook site. Yes, some were a bit risque, but overall they were benign pictures of a college aged woman having fun with her friends. Someone has gained access to these photos and threatened to blackmail her with them. Rather than give in, she decided to release them herself as you will see in her interview with Matt Lauer from the Today Show.

No, she wasn’t being considered for a job, but one person putting their own spin on these photos and attempting to portray Polumbo in a negative light threatened her ability to attain the position of Ms. America. It’s easy to draw a correlation to how such a thing can happen in the employment environment. It doesn’t even have to be a blackmail situation. All it takes is an Internet savvy individual browsing a social networking site and then whatever is found can be interpreted in many different ways.

Social Security Number Trace (Address History Searches)

First, let’s dispel a commonly held misconception: A Social Security Number Trace is not conducted through the Social Security Administration, nor is it a service that can definitively indicate if the subject of your search is “legal”.

The Social Security Number Trace should really be referred to as an “Address History Search”. This important screening tool provides a roadmap to a thorough and effective background check by revealing the addresses at which your applicant has been presumed to live and every name they have been presumed to use over at least the past seven to ten years. Completing this search gives you the greatest opportunity to commence a thorough, extensive criminal record search.

Social Security Number Traces are offered through a variety of sources. The most common sources are the credit bureaus. Companies such as Experian and TransUnion aggregate address and name history by identifying information reported by lending institutions such as banks, credit companies, utilities companies, cable operators, etc. If you have applied for any type of credit, chances are the credit bureaus will have a record of that. Of course when you apply for credit, you provide your name, address and social security number. This information is passed on to the credit bureaus and Voila! A credit event has been recorded. Another source for traces is through other commercially aggregated databases. Like all databases, some are better than others. Some will include aggregate information from credit bureaus as well as additional sources such as magazine subscription databases, customer affinity programs (e.g. frequent flier accounts), grocery accounts, etc.

We have conducted exhaustive testing of both credit bureau and aggregate database traces. While it would be irresponsible to suggest that these tests or any others draw a conclusive result, our preference is for Experian traces on the credit bureau side and a database called “PASST”.

Clients often ask, “What source is the best?” Unfortunately, there is no such thing as a best method of identifying address history. Information can vary from database to database, so you choose the one you are most comfortable with. One thing is certain, there is not a single source that can guarantee the information it provides is 100% accurate. For instance, let’s say that you lived with a friend for a period of time and never applied for credit while there. There’s nothing to tie you to that location. Therefore, a Social Security Number Trace will not reveal that address. Another issue occurs when tracing a number that belongs to an individual who has never applied for credit. Most commonly, this occurs with younger individuals. Most often, the number will not trace. The same logic applies to an individual who has recently moved to the United States. Even though they may be in this country lawfully, they have not established a history of credit. The lack of information on an address history search does not mean that the individual is illegal. It simply means that the credit bureau has not aggregated any data on the individual.

There are two definitive reasons as to why a Social Security Number Trace cannot be conducted through the Social Security Administration (SSA). First, the SSA does not maintain such address history information for commercial purposes. Secondly, only an employer can contact the SSA for information and only after the individual has become an employee. Contacting the SSA is something that an employer can do to determine Right to Work Eligibility Status, which applies to the I-9 process.

Since we are performing an in-depth dissection of the Social Security Number Trace, it is important to address some of the inherent “flaws” contained within. However also noteworthy is that none of these “flaws” or “anomalies” whether contemplated individually or together make a compelling argument for foregoing this search. Bear in mind that the data contained in a trace is done so by human beings over the course of time. The old saying of “garbage in, garbage out” applies. Since the information for each credit event must have been keyed in at some point by hand, it is inevitable that entry errors will occur, such as incorrect spelling of an individual’s name, the wrong address or a transposed social security number. This can and does happen and often, it is difficult to pinpoint when or where the error happened. The other commonly “flawed” information relates to the date of birth contained on the Social Security Number Trace. The best way to explain this anomaly is by posing a question. When was the last time you were asked to provide your birth date when you applied for credit? Even if you were asked, what is the likelihood that you were asked to prove it? This is the most commonly misreported information on a trace and we often tell clients to disregard the date provided. The SSN Trace is simply not a reliable resource to validate date of birth. Ultimately, the date of birth has no bearing on the information that is being used in the trace anyway.

Now that we have dealt with the “what” and “who” let’s consider the “why”. What can an employer do with this information? A trace can be conducted for only a few dollars. However, the low cost doesn’t diminish its importance. As mentioned earlier, the trace will provide a roadmap for conducting a thorough criminal record search. Failing to perform this search virtually guarantees that your goal of an effective and reliable background check will not be accomplished. Another useful aspect of the SSN Trace, when conducted through certain providers, is related to security. As an example, Experian offers a “Fraud Shield”. This feature cross references the social security number with more than 20 different databases to ensure that the number hasn’t been used in conjunction with reported identity theft, that the number does not belong to a deceased person, that the number was assigned during an appropriate birth date range, etc. Obviously, if an alert is offered in this regard, a background check should be taken with a grain of salt and more information must be sought from the applicant.

The address history and alias names identified by a SSN Trace represent an inexpensive and objective roadmap for conducting criminal history research. Without this objective resource, you must rely on your applicant to tell you where to search for criminal history, which can lead to obvious consequences. A dishonest applicant could easily conceal the fact that they moved 3 years ago to get away from a felony conviction. While the precise content of the SSN Trace cannot be considered 100% conclusive, no criminal background check should be considered complete without referencing this important tool.

State of Arizona Set to Mandate Tougher Regs for Employment Eligibility

Some trends take longer than others. Take for instance beanie babies, bell bottom pants, swatch watches, or cabbage patch kids. These things took off like wild fire. For better or worse, it seemed like everyone couldn’t wait to participate. Okay so maybe the trend for states to enforce employment eligibility laws isn’t setting world records for speed, but Arizona is now set to be the second state to pass a law that puts teeth into the enforcement of only hiring legal U.S. citizens and it is believed that Georgia is close behind. Arizona house bill #2779 threatens to suspend the business license of first time offenders and even includes a “death penalty”, permanent revocation of a business license for failing to verify work status on all employees. Of course, so far the state’s efforts are only being bolstered with a $100,000 budget, but if these efforts actually do take shape, employers in the state of Arizona better take note, and fast!

I was recently speaking with an employment attorney about states adopting such laws for the enforcement of a federal statute and she questioned whether the state could actually adopt legislation that mandates the enforcement. It’s a question I still haven’t been able to answer but one that we should most definitely follow up on.

In the meantime, should this trend continue, it puts further onus on the employer to ensure that their employees are working legally in this country. It dictates that they must spend more time making sure that I-9 documentation is filled out correctly, that identification be scrutinized and that the employer confirm the employees eligibility status with the Social Security Administration. With the threat of the aforementioned sanctions, failure to do this could really hurt . . . now.