New CA Law Aimed at Screening Firms Who Offshore

California SB 909 was just signed into law and will require background screening firms to be upfront about off-shoring personally identifiable consumer data.   The new law is set to go into effect on January 1, 2010.   As a reminder EmployeeScreenIQ DOES NOT off-shore any of our work, all work is conducted and maintained in the United States.

Another provision of the law requires a person who procures or causes to be prepared an investigative consumer report for employment purposes to provide a consumer with the Internet Web site address or telephone number of the investigative consumer reporting agency where the consumer may find additional information about the agency’s privacy practices.  This likely means that if you are a California employer, your applicant release will need updating. Stay tuned for more info on this.

According to attorney Pamela Devata of Seyfarth Shaw:

The Governor signed and secretary of state chaptered SB 909 yesterday.

In it’s final form, the bill will require a person who procures or causes to be prepared an investigative consumer report for employment purposes to provide a consumer with the Internet Web site address or telephone number of the investigative consumer reporting agency where the consumer may find additional information about the agency’s privacy practices.

This bill will also require an investigative consumer reporting agency to conspicuously post on its primary Internet Web site information describing its privacy practices with respect to its preparation and processing of investigative consumer reports, or, if it does not have an Internet Web site, to mail a written copy of the privacy statement to consumers upon request. The bill also makes an investigative consumer reporting agency liable to a consumer who is harmed by any unauthorized access of the consumer’s personally identifiable information, act, or omission that occurs outside the United States or its territories, as specified.

9/28/2010 Background Checking … Using Social Media (ERE.net)

September 28, 2010

Source: ERE.net

Employee referrals and social media have begun to blend together. Could background checks and social media be next?

A new company called “Social Intelligence” says it’ll “track the worldwide network of social media, including Facebook, Twitter, Flickr, YouTube, LinkedIn, individual blogs, and thousands of other sources.”

Social Intelligence will, within 24-48 hours, produce a report on a job candidate using both automation as well as humans, the latter there to make sure there aren’t “false positives.” It says it will weed out “protected class” information it finds, such as race and religion. The company is also offering a version to monitor what existing employees are up to.

As far as the hiring version, a screenshot, which you can click on to enlarge, shows that the employee profile screens for such things as: ”Gangs,” “Drugs/drug lingo,” “demonstrating potentially violent behavior,” and “poor judgment” — something we could all agree can be found in ample supply on social media.

I asked the company’s CEO, Max Drucker, whether this judgment thing is kind of subjective. “We err on the side of not flagging something,” he says, adding that “serious red-flag issues” are what they’re really looking for. He also notes that the firm has three people review information before the profile’s done. So, “Todd beat Sean in the 600-meter dash” shouldn’t show up as a Todd-beats-people flag. I hope.

Nick Fishman, the co-founder of EmployeeScreenIQ, doesn’t envision his or other similar companies going down the social-media background-checking road. “Not only are they not now, but I don’t foresee getting into it in the future,” he says. “It’s a hornet’s nest.” Awaiting employers in that nest, he says, are FCRA regulations and EEO rules.

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9/24/2010 Want to volunteer? Be sure your credit's good (CreditCards.com)

September 24, 2010

Source: CreditCards.com

Want to volunteer? Be sure your credit’s good

Volunteerism is on the rise, thanks in part to the recession. And more and more, volunteers are being asked to submit to the same background screening techniques that employers use to vet job candidates.

More parents are inside classrooms or on soccer fields, helping children. More Good Samaritans are in food banks, sorting and distributing food. More job-seekers are inside the offices of nonprofit organizations, hoping to network and maintain a fresh resume. Data from the Corporation for National & Community Service bears this out. So, to handle the onslaught of volunteers, some groups are using third-party screening companies that prepare “consumer reports,” which sometimes include credit checks.

“Volunteers can do almost anything a paid worker can do,” said Tena Friery, a research specialist with the Privacy Rights Clearinghouse, a San Diego, Calif.-based nonprofit consumer organization. “And like employers, some volunteer organizations are using credit checksas a character assessment.”

Background checks spark controversy
Federal and some state laws passed in the wake of Sept. 11, 2001, require some nonprofit organizations to conduct criminal background checks on volunteers. While nonprofit leaders feel that the tougher standards offer valuable protection to the public, they say it places them in uncomfortable positions.

“It’s disruptive. It’s intrusive. And it puts the charity in a poor situation,” said Howard Dvorkin, CEO of the nonprofit Consolidated Credit Counseling Services, which conducts credit checks and fingerprint background checks on its volunteer board members, as well as some volunteers who may have access to clients’ financial information.

“These are volunteer positions and people are giving their time. And you’re, all of a sudden, asking people to go to the police department and go get their fingerprints done and to give us their Social Security numbers so we can do a credit check.”

Still, a credit check can reveal valuable information about a candidate, Dvorkin said.

“A credit report tells a lot more than if you pay your bills,” Dvorkin said. “It says whether this person is fiscally irresponsible and possibly shows desperation. If a person is falling far behind on their bills, they may try to get those bills paid by any means possible.”

Friery, with the Privacy Rights Clearinghouse, says organizations are legally required to ask permission before screening volunteer and employee applicants. Though few organizations check the credit histories of their volunteers, many will ask applicants to sign consent forms that allow the organization or a third-party screening company to perform consumer reports.

. . .

A growing trend
To address the increasing security concerns of groups like the NCVC and others, more nonprofit agencies are turning to third-party screening companies to vet candidates.

“Volunteer screening is definitely on the rise,” said Jason B. Morris, a spokesman for the National Association of Professional Background Screeners, as well as president and COO for EmployeeScreenIQ, a Cleveland-based background screening company.

“But you’re not seeing the same level of depth of the searches that you would see as an employer,” Morris said. “They don’t have the money, even though I would say that they have the same, if not greater, liability.”

And as the screening has increased, volunteers have raised questions about privacy and whether such inquiries would have a negative impact on credit scores. Though inquiries from employers and volunteer agencies appear on the reports of consumers, they are considered “soft pulls” and do not negatively affect credit scores.

“A lot of people get confused when they see the words consumer reports,” Morris said. “A lot of people confuse those words with credit reports. So they think automatically that by them signing that they can run a credit check. In many cases, that authorization does allow these companies to do that credit check, however, it usually is not the case that one gets done.”

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9/27/2010 Schwarzenegger Vetoes Credit Report Bill Again and Again

California Governor Arnold Schwarzenegger has vetoed a bill aimed to ban the use of credit reports when conducting employment background checks for a third time.  Come on people.  This is getting ridiculous already.  How many times does he have to do this for the state assembly to recognize that doing so would create great peril for employers and their clients/customers?

Schwarzenegger released the following statement concerning his decision to reject AB482:

“This bill is similar to legislation I have vetoed for the last two years on the basis that California’s employers and businesses have inherent needs to obtain information about applicants for employment and existing law already provides protections for employees from improper use of credit reports. As with the last two bills, this measure would also significantly increase the exposure for potential litigation over the use of credit checks.  For these reasons, I am unable to sign this bill.”

I recently posted a blog about the EEOC’s position on the use of credit checks and thought I’d list the high points below.

I understand that this [credit reports] is becoming a hot button issue, but I think our state and federal governments and agencies need to take a step back and analyze this information before abolishing the practice.  The states of Hawaii, Oregon, Washington and Illinois  have already passed legislation aimed at curbing the use of employment credit reports, with around 19 other states with proposed legislation.  There is a  federal effort to do the same and of course, the EEOC would be only so happy to see this measure pass.  It’s important to note that there are a number existing laws that provide protection for job candidates against those that would misuse employment credit reports.

Much of this is a populist response to our current economic climate.  After all, people are struggling.  However, another important finding from the SHRM study is that employers aren’t just reviewing the last couple of years worth of credit history but rather looking at the entire report as a “body of work”.  Most employers understand that finding someone with perfect credit is near impossible, even in good times.  Today, if companies waited around for candidates with perfect credit, they wouldn’t be able to hire anyone.  They also know that unless regulated, that bad credit alone will not disqualify someone from employment.  Further, when derogatory information is found, a great majority are asking for an explanation before taking action.

It is important to consider that most companies are using this tool to gauge personal responsibility.  If a person has a history of mishandling their own finances, are they fit to manage the finances of their employer?  Can they be trusted with personal information on a company’s customers?

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Schwarzenegger Vetoes Credit Report Bill Again and Again

California Governor Arnold Schwarzenegger has vetoed a bill aimed to ban the use of credit reports when conducting employment background checks for a third time.  Come on people.  This is getting ridiculous already.  How many times does he have to do this for the state assembly to recognize that doing so would create great peril for employers and their clients/customers?

Schwarzenegger released the following statement concerning his decision to reject AB482:

“This bill is similar to legislation I have vetoed for the last two years on the basis that California’s employers and businesses have inherent needs to obtain information about applicants for employment and existing law already provides protections for employees from improper use of credit reports. As with the last two bills, this measure would also significantly increase the exposure for potential litigation over the use of credit checks.  For these reasons, I am unable to sign this bill.”

I recently posted a blog about the EEOC’s position on the use of credit checks and thought I’d list the high points below.

I understand that this [credit reports] is becoming a hot button issue, but I think our state and federal governments and agencies need to take a step back and analyze this information before abolishing the practice.  The states of Hawaii, Oregon, Washington and Illinois  have already passed legislation aimed at curbing the use of employment credit reports, with around 19 other states with proposed legislation.  There is a  federal effort to do the same and of course, the EEOC would be only so happy to see this measure pass.  It’s important to note that there are a number existing laws that provide protection for job candidates against those that would misuse employment credit reports.

Much of this is a populist response to our current economic climate.  After all, people are struggling.  However, another important finding from the SHRM study is that employers aren’t just reviewing the last couple of years worth of credit history but rather looking at the entire report as a “body of work”.  Most employers understand that finding someone with perfect credit is near impossible, even in good times.  Today, if companies waited around for candidates with perfect credit, they wouldn’t be able to hire anyone.  They also know that unless regulated, that bad credit alone will not disqualify someone from employment.  Further, when derogatory information is found, a great majority are asking for an explanation before taking action.

It is important to consider that most companies are using this tool to gauge personal responsibility.  If a person has a history of mishandling their own finances, are they fit to manage the finances of their employer?  Can they be trusted with personal information on a company’s customers?

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Michael Vick Rebounds: Becomes Model Employee After Conviction?

Then                                                                               Now

By now everyone knows the saga of Philadelphia Eagles quarterback, Michael Vick.  After being convicted on dog fighting charges, he served 2 years in federal prison, during which time he was dismissed by his current employer, the Atlanta Falcons.  Upon his release, many wondered if any NFL team would sign him and if so, would that team have enough faith in him to make him the focal point of their offense.  Many also wondered if he had truly changed and if he could stay out of trouble.  Now, I know athletes seeking employment bear very little resemblance to those of us in the regular working world.  After all, if I had been convicted of the same felonies, I can’t imagine how many employers would hiring me after conducting a background check.  But I thought that Vick’s transformation was worth looking at.

While Vick was in prison, he sought help from then-Indianapolis Colts head coach, Tony Dungy.  Dungy mentored him while in prison and helped him get his life in order after he was released.  He prepared Vick for the fact that most NFL teams would not be interested in his services and if so, most likely would not use him as a starter.  He also let Vick know that there would be no more second chances.  He had one opportunity to prove his past was behind him.

Dungy was right.  The Philadelphia Eagles signed him as a third string quarterback before the 2009 season where Vick earned very little playing time.  However, the former star quarterback didn’t complain.  He became a good teammate by all accounts.  He also stayed out of trouble.

Fast forward to the 2010 season where the Eagles traded away their starting quarterback Donovan McNabb to the Washington Redskins so they could promote his heir-apparent, Kevin Kolb.  Vick would be moved up to the second string, but it was made clear that he would not be competing for the starting job.  Until now . . .

Kolb sustained a concussion in the season opener against the Green Bay Packers and Vick mounted a great comeback that fell just short.  Vick started this week against the Detroit Lions after Kolb was scratched due to his injury.  Vick dazzled with 284 yards passing and a victory.

On Monday morning, I sat stunned to hear that Vick supported coach Andy Reid’s decision to go back to Kolb as soon as he was healthy.  Vick said that it was Kolb’s job and that he would continue to prepare in the event the team needed him.  Was this Reid’s way of testing him?  Maybe.  Because on Tuesday, the team announced that Vick would be the starter for the remainder of the season (and it had nothing to do with Kolb’s injury).

Okay, I know I’ve gotten long-winded, but the point of retelling the story is to show how someone with a felony conviction has been able to transform his life.  He did it by finding a mentor and committing himself to living a clean life.  He took a job (the only one that was offered), even though it was clearly beneath him.  He became a good employee and waited for the team to trust him.  And when they gave him the opportunity, he shined.

Now, the story isn’t over on two fronts.  Many still wonder if he can continue to stay out of trouble.  Further, if his performance on the field doesn’t continue to meet expectation, how will he handle the adversity?  But as of right now, he’s doing all the things he needs to regain the trust of his current and future employers.

P.S. Do you know how much SEO love I just gave to all those NFL teams? Do you think they’ll return the favor? 🙂

Dissecting the EEOC’s Position on Criminal Background Checks

Last week we started to discuss the EEOC’s official position on employment background checks and how it affects employers.  We listed three areas of focus that we wanted to dissect in further detail (see below).  Today, we’ll focus on the criminal background check. And I soon began to realize that this specific area of focus would need to be broken into separate segments in order to avoid an Illiad-like post.  That said, let’s just address the EEOC concerns, who is using criminal background checks and how they are using them.

The EEOC is concerned that using criminal records in the hiring process creates a disparate impact on minorities since they are arrested and convicted with much greater frequency than others.  This might be true, but does it outweigh an employers right to know in order to make an informed hiring decision?

In a study conducted by EmployeeScreenIQ earlier this year, we found that 92% of employers indicated that they conduct employment background checks.  Of those organizations:

  • 90% of them check for criminal records at the county level
  • 84% do so through a national database and
  • 35% search for criminal records by submitting fingerprints to their state and, or the FBI
  • Nearly all of those who used them indicated that this practice was a high priority in the hiring process

However, we should have followed up and asked how influential specific types of criminal record were when making a hiring decision.

Thankfully, the folks at SHRM did just that (see below).  Their study released earlier this year echoed the usage numbers above.  However, they also found the following information in regards to adverse hiring decisions based on criminal records:

  • 97% said that the the severity of the criminal record was somewhat to very influential
  • 95% are influenced by the number of convictions
  • 93% consider the relevancy to the position the candidate was applying for
  • 95% are influenced by the length of time since the criminal activity
  • 81% considered the age of the person at the time the crime took place
So clearly, criminal background checks are important to employers and for good reason. The SHRM study also asked why employers these checks as part of their employment screening program.
  • 61% want to ensure a safe working environment
  • 51% want to insulate themselves claims of negligent hiring
  • 39% want to reduce the opportunity of theft, embezzlement, etc.
  • 20% want to comply with state or licensing requirements
  • 12% want to evaluate the overall trustworthiness of a candidate

These statistics are important because they show that employers are taking responsible steps to ensure they make responsible hiring decisions when it comes to criminal records. An area of concern though is that 26% of those polled said they were somewhat influenced by arrest records that did not result in a conviction and 5% were to heavily influenced by the same.

Here’s where I imagine the EEOC is going to be particularly concerned.  In most states, employers can consider arrests that took place over the last 7 years. And certainly employers will be concerned about arrests with pending cases.  However, this gray area is where employers can get into trouble.  Employers have to walk a fine line here in determining if a not guilty finding or dismissal should be used in the hiring decision.

That issue aside, you cannot argue that a criminal background check is an important factor in the hiring process.  It is one that is widely used and further, widely expected to be used.  In many cases employers are mandated by their state or regulatory requirements to conduct these checks. And employers who choose not to conduct these searches open themselves to significant liability and loss.

In subsequent posts, we’ll discuss how employers can/should make their decisions when they identify a criminal record and some tools in the marketplace that are designed to make this decisions consistently.

Response to EEOC’s Background Check Concerns About Credit Reports

Yesterday, we posted the AP story which detailed the EEOC’s concerns about employment background checks.  And, we listed three topics that we would dissect in further detail.  Today, I wanted to focus on credit reports.

  • Are organizations misusing credit reports to make hiring decisions?
  • Are organizations misusing criminal background checks to make hiring decisions?
  • Where do we agree/disagree with the EEOC?

I would tend to agree that a company should not indiscriminately run credit reports on all candidates unless required to do so by regulation or necessitated by job responsibility.  And when you analyze the statistics from SHRM’s Background Checking Survey (on Credit Reports), businesses in general seem to support that statement.

They found that only 13% of all organizations were running credit reports on all candidates, 47% were checking credit on select candidates and the remainder of respondents were not using them at all.  Of those that review credit reports on select workers, 91% do so because the candidate would have fiduciary and financial responsibilities.  46% do so because the person was an executive level candidate.

EmployeeScreenIQ’s Screening Trends survey found that only 1/3rd of respondents thought credit checks were a high priority in the hiring process.  15% said they evaluated credit on all candidates, 45% said they did so on select candidates and 39% said they never reviewed credit when making a hiring decision.

I understand that this is becoming a hot button issue, but I think our state and federal governments and agencies need to take a step back and analyze this information before abolishing the practice.  The states of Hawaii, Oregon, Washington and Illinois  have already passed legislation aimed at curbing the use of employment credit reports, with around 19 other states with proposed legislation.  There is a  federal effort to do the same and of course, the EEOC would be only so happy to see this measure pass.  It’s important to note that there are a number existing laws that provide protection for job candidates against those that would misuse employment credit reports.

Much of this is a populist response to our current economic climate.  After all, people are struggling.  However, another important finding from the SHRM study is that employers aren’t just reviewing the last couple of years worth of credit history but rather looking at the entire report as a “body of work”.  Most employers understand that finding someone with perfect credit is near impossible, even in good times.  Today, if companies waited around for candidates with perfect credit, they wouldn’t be able to hire anyone.  They also know that unless regulated, that bad credit alone will not disqualify someone from employment.  Further, when derogatory information is found, a great majority are asking for an explanation before taking action.

It is important to consider that most companies are using this tool to gauge personal responsibility.  If a person has a history of mishandling their own finances, are they fit to manage the finances of their employer?  Can they be trusted with personal information on a company’s customers?

California governor Arnold Schwarzenegger has twice vetoed a state bill aimed to ban employment credit reports.  His rationale the second time around was as follows:

“I am returning Assembly Bill 943 without my signature. This bill would prohibit the use of consumer credit reports for employment purposes unless the information is either substantially job related, as defined, or required by law to be disclosed to or obtained by the user of the report.

This bill is similar to legislation I vetoed last year on the basis that California’s employers and businesses have inherent needs to obtain information about applicants for employment and existing law already provides protections for employees from improper use of credit reports.

As with last year’s bill, this measure would also significantly increase the exposure for potential litigation over the use of credit checks. For these reasons, I am unable to sign this bill.”

So, I have no problem with the EEOC (and the states) going after those that abuse the use of employment credit reports. But don’t let a small number of isolated incidents ruin everyone else’s ability to protect themselves, their employees and their customers.

EmployeeScreenIQ’s Jason Morris to Speak at Annual PIHRA Conference

EmployeeScreenIQ’s Jason B. Morris will be speaking at the 53rd Annual PIHRA Conference in Pasadena, CA at the Pasadena Convention Center on September 21, 2010 at 2:00 pm pst.

Recruiting and Hiring Liabilities: Protecting Your Organization from the Harmful Effects of Web 2.0

Technology has dramatically changed the way we compete for talent and screen prospective employees, but nothing approaches the impact of social networking.  With the widespread use of Facebook, LinkedIn, and other sites comes a new wave of legal liabilities for both recruiters and screeners. Other emerging technology threats include online diploma fraud, employment mills that manufacture work experience, screen scraping, and more.  Employers need to develop best practices and policies in order to successfully manage Web 2.0 technologies.

Join EmployeeScreenIQ’s President and Chief Operating Officer,  Jason B. Morris for an informative session about how to protect your company in the age of Facebook.  You’ll learn which social networking sites are most popular with recruiters and applicants, and their impact on employment screening and the hiring process.  Attendees will also learn how to develop a social media policy and spot the warning signs of diploma and employment mills.  Finally, you’ll examine other Web 2.0 trends such as screen scraping and instant screening.

Please stop by and say hello if you plan to attend.

EEOC Weighs in on Employment Background Checks

Last month, the EEOC who had been largely silent on issues related to employment background checks, made a statement that has and will continue to have ripple affects across the human resources and legal community for the foreseeable future.

“A blanket refusal to hire workers based on criminal records or credit problems can be illegal if it has a disparate impact on racial minorities, according to the Equal Employment Opportunity Commission.”

“Our sense is that the problem is snowballing because of the technology allowing these checks to be done with a fair amount of ease,” said Carol Miaskoff, assistant legal counsel at the EEOC.

Admittedly, I am way late to the party on this one.  Why?  I’ve been trying to digest it all and contemplating how best to respond.

What I think makes the most sense is to bullet-point topics that we will examine and dissect in a series of posts.  So here goes:

First, check out the the article below and we’ll go from there.

Some Job Screening Tactics Challenged as Illegal

Companies using criminal records or bad credit reports to screen out job applicants might run afoul of anti-discrimination laws as the government steps up scrutiny of hiring policies that can hurt blacks and Hispanics.

A blanket refusal to hire workers based on criminal records or credit problems can be illegal if it has a disparate impact on racial minorities, according to the Equal Employment Opportunity Commission. The agency enforces the nation’s employment discrimination laws.

“Our sense is that the problem is snowballing because of the technology allowing these checks to be done with a fair amount of ease,” said Carol Miaskoff, assistant legal counsel at the EEOC.

With millions of adults having criminal records — anything from underage drinking to homicide — a growing number of job seekers are having a rough time finding work. And more companies are trying to screen out people with bankruptcies, court judgments or other credit problems just as those numbers have swollen during the recession.

Just ask Adrienne Hudson, a single mother who says she was fired from her new job as a bus driver at First Transit in Oakland, Calif., when the company found out she had been convicted seven years earlier for welfare fraud.

Hudson, 44, is fighting back with a lawsuit alleging the company’s hiring practice discriminates against black and Latino job seekers, who have arrest and conviction rates far greater than whites. A spokesman for First Transit said the company does not comment on pending litigation.

“People make mistakes,” said Hudson, who is black, “but when they correct their mistake, they should not be punished again outside of the court system.”

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