EmployeeScreenIQ Blog

I read a very interesting case yesterday that is impactful both for employment screening providers and the organizations they support.  A registered Sex Offender in the state of California sued a background screening provider for reporting such information it found on the Megan’s Law website which led to him getting denied for employment.  He didn’t sue because the information was inaccurate, but rather because he said the company violated the terms of the site which specified that it prohibits the use of such information for employment purposes.

The screening provider successfully argued on the basis on their First Amendment right to Free Speech.  They simply republished information found on a public website.  At no time, did they make a hiring recommendation or decision.  The court ruled in their favor.

According to Jones Day, the firm representing the provider, “In a case of first impression, trial court dismissed the case pursuant to California’s anti-SLAPP law, which prohibits suits challenging an exercise of free speech unless the plaintiff can show a likelihood of success on the merits.”

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Recently a long awaited study was published on the recidivism rates of ex-criminals in the United States.  This study known in our industry as the “Blumstein Study” examined New York State Arrest records for more than 88,000 individuals who were first arrested in 1980.  Their recidivism rates were followed for 27 years through 2007.  The study which was published in the Journal of Criminology was conducted by Carnegie Mellon Professor Alfred Blumstein and Co-Author Kiminori Nakamura.

To summarize the report, ex-offenders do in fact have a high rate of recidivism within the first five years after arrest.  However, the study suggests that for offenders who “stay clean” for five years or more are much less likely to get arrested.  They suggest that after five years they are almost as likely to commit a crime as the rest of the general population of the United States.

The study is timely and important for many reasons.  First, the Obama administration has made it a point to break down those barriers for individuals who have committed crimes to gain employment.  Secondly, the EEOC has a mission to ensure a disparate class of ex-offenders is not created in the Untied States.  The problem is that the study has a lot of holes.

Noted employment screening industry experts and members of the National Association of Professional Background Screeners (NAPBS)  have commented on this study for months.   This week  Security Management Magazine published a great article on the topic.  One well respected expert concluded that because the study was limited to New York state it fails to find those criminals who may have committed crimes in other states.  Blumstein acknowledges this and expects that might lead to a 10 percent increase in the risk findings after that data is added.  The same expert also notes that because the study only looks at arrests and not convictions the true sample size is greatly reduced.

In my opinion these industry experts are spot on! Having examined the findings of the study I find even more shortcomings.  First, what are the parallels between major crimes and minor ones.  Meaning, how does the recidivism rate for someone convicted of Armed Robbery compare to someone convicted of Petty Theft? Secondly, the study is only able to track the rate of crimes re-committed that the individual has been caught committing.  Many times employees are simply fired and never prosecuted for breaking the law.  Lastly, in the pre-employment screening world, many times we are very concerned with “white collar” crimes.  There is no data on crimes committed at the Federal District Court level.  These crimes could include embezzlement, bank fraud, kidnapping etc..  These are only three examples of where I feel the study falls short.  I will reserve further comments because I feel an article brewing in my head and I don’t want to give it all away here!

In conclusion, the study is very important.  It would have had a huge impact on the recent El Vs. SEPTA case, had it been published a few years back.  It’s also important because it could pose a great defense to employers being sued under the Negligent Hiring doctrine.  What we do know is this; the current administration has made the “ex-offender in the workplace” issue a priority to solve.  The question is do employers want the government telling them which perspective employees are a risk enough to take?

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As organizations continue to identify methods to streamline their hiring processes and to save money, they look to their various providers for solutions.  The emergence of applicant tracking and HRIS systems has accelerated this process, taking manual tasks and processes and automating them.  One such process is the ability to request a background check through these systems, thereby porting all of the necessary data to the screening provider with the click of a button.  No additional data entry is needed.

However, there’s one hitch in completely automating this process: the refusal of employers and academic institutions to accept an electronic signature from a job applicant as proof of consent to release information.  We highlighted this issue a couple months ago in the article Expediting Your Background Checks Through Electronic Signatures?

Further, we just released our study on the acceptance of electronic signatures.  See below.

Struggle to Find a Job Can Increase When Schools and Employers Don’t Recognize Law

Global employment screening company finds shocking non-compliance rates with legislation signed 10 years ago

Cleveland (PRWEB) March 24, 2009 — An alarming 57 percent of requests for employment and education verifications were rejected when an electronically signed consent form was used, according to research conducted by the Quality Service division of employeescreenIQ, a global screening company. This verification of previous employment and degree is a critical step in the hiring process. Human Resource professionals rely on this information to make informed hiring decisions and with resume fraud at an all-time high accuracy and timeliness of information is essential. “Even though the Electronic Signature Act of 1999 expressly recognizes such signatures as legally binding consent, we find that most employers and academic institutions still want to see an actual signature before releasing information,” said employeescreenIQ’s Vice President of Quality Service, Kevin Bachman. “If an HR Manager can’t get the information they need to make a hiring decision, there’s the likelihood they could simply move onto another candidate.” employeescreenIQ’s research also revealed these interesting facts:

• Academic institutions rejected the request for information 59% of the time when an electronic signature was used
• Employers rejected the request for information 55% of the time when an electronic signature was used
• Turnaround time increased if the company wanted to try again once they obtained an actual signature

This is a case where technology may not be the panacea it’s intended to be. As we released in our 2009 background screening trends, integrating the employment background check process into Applicant Tracking Systems and HRIS platforms is on the rise. And while this can streamline the process, saving both time and money, it doesn’t completely eliminate roadblocks. “Companies that leverage technology find themselves making a choice. Either they exit their automated system half the time to obtain handwritten signatures, decreasing the benefits of integration, or they receive less information, said Bachman. “It’s also a risk for the candidate who may not get a job because their former school or employer doesn’t follow a law passed 10 years ago.”

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A new study conducted by The Pew Center sheds light on how much States spend to house inmates in correctional facilities.  The study also asks the questions: Do certain crimes really warrant jail time?  Can punishment for non-violent crimes be left up to the community instead cutting costs significantly?  These are very intriguing questions which I’m sure impels much debate among those in the criminal justice field. 

If sentencing laws were changed so that less offenders ended up serving jail time, how might this affect the offenders’ ability to obtain work?  Is there less stigma attached to offenders that are sentenced to probation or electronic monitoring than those who carry out their sentence in jail? 

For example:  You have two applicants with disorderly conduct convictions on their background check.  One of those applicants was sentenced to 10 days in jail.  The other was sentenced to 6 months probation and 30 hours of community service.  Does the applicant that didn’t spend time in the slammer seem more appealing because of the way society looks at those who have been incarcerated?  Or do you look at them the same way because of the type of crime committed, disregarding the sentencing?  I would love to hear some HR professionals’ opinions on this one!

Cost of locking up Americans too high: Pew study

WASHINGTON (Reuters) – One in every 31 U.S. adults is in the corrections system, which includes jail, prison, probation and supervision, more than double the rate of a quarter century ago, according to a report released on Monday by the Pew Center on the States. 

The study, which said the current rate compares to one in 77 in 1982, concluded that with declining resources, more emphasis should be put on community supervision, not jail or prison. 

“Violent and career criminals need to be locked up, and for a long time. But our research shows that prisons are housing too many people who can be managed safely and held accountable in the community at far lower cost,” said Adam Gelb, director of the Center’s Public Safety Performance Project, which produced the report. 

The United States has the highest incarceration rate and the biggest prison population of any country in the world, according to figures from the U.S. Department of Justice.

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Well color me surprised!  OJ Simpson is in trouble again.  This time, he was convicted of kidnapping and robbery in a Nevada court.  Now, he faces life in prison; something that comes about 13 years too late.  Evidently, this time the glove fit.  Gone are the good old days of the Juice dashing through airports for Hertz and reporting from the sidelines of a football game for NBC.

What would these companies find of they conducted a background check on Mr. Simpson today?  If they ran a Civil Records Search they would find a wrongful death judgment against him by Ronald Goldman’s family.  They might also find several liens and judgments if they ran a credit report.  Mind you, they would not find a conviction for murder in the LA courts because, well, he had the best attorneys money could by and some opined even the best jury money could buy.  Also noteworthy is the fact that arrest records greater than 7 years cannot be reported or used in a hiring decision.  However, if they conducted a Criminal Records Search in Clark County, Nevada they would find the aforementioned felony convictions for kidnapping and robbery.

Now on to Employment Verifications.  Very soon, Mr. Simpson might have the following experience on his resume: License Plate Engineer for the Nevada Department of Corrections.  That has a nice ring to it.  That would be a fun supervisor interview.  Reference Interview?  Where’s AC Cowlings these days?  Unfortunately, Simpson’s original defender, Robert Kardashian (father of Kim Kardashian, girlfriend of Reggie Bush), has passed away and can no longer vouch for his good friend.  I guess that just leaves Kato Kaelin.

I’m thinking Mr. Simpson will no longer qualify for employment.  Perhaps he was a visionary who saw his 401K plummet and decided that he would rather be a guest of the government until the market comes back.

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Hurricane Ike

In early September 2008 Southeast Texas was hit with one of the worst hurricanes in its history.  Hurricane Ike, making landfall as a category two hurricane peaked at a 5.1 hurricane while still out in the Gulf of Mexico.   In total, Hurricane Ike was blamed for 153 deaths, 71 in the United States.  According to Wikipedia, Damages from Ike in US coastal areas are estimated at $27 billion.

At this point you are probably saying to yourself “What does this have to do with background checks?” Well, I’m glad you asked.  Marketwatch.com had an article yesterday titled; “Hurricane Ike Victims Should be Wary When Hiring to Rebuild.”  Hurricane Ike will bring many out of state builders and contractors to Texas to help rebuild the areas most damaged by the storm.  According to the Texas Association of Builders (TAB):

“Our industry understands that people want to quickly put their homes and their lives back together,” said Bill Pittman, president of the Galveston County Builders Association. “But the State sets stringent requirements for building and remodeling in Texas that are designed to protect homeowners. Using a builder or remodeler who has met these requirements will help safeguard a homeowner’s rebuilding investment.”

Under state law, home builders and remodelers must register with the Texas Residential Construction Commission (TRCC) in order to do business in Texas. Registration assures homeowners that their builder or remodeler has passed a background check and maintains a Texas business address. In addition, work performed by that builder or remodeler must meet specific building standards and be covered by a warranty.

“Using an out-of-state builder, remodeler or contractor is risky,” said Beaumont builder Bill Little, a director of both TAB and the Home Builders Association of Southeast Texas. “Neither they nor their work is held accountable to standards set by the State of Texas. Hurricane Ike victims run the risk of being re-victimized as they try and rebuild their lives.”

Homeowners or anyone looking to hire a contractor should check their registration status via the TRCC online database at www.texascc.org or by calling 1-877-651-TRCC.

We can only learn from past experiences.  August 27, 2001, Sue Weaver was brutally raped and beaten to death by a twice convicted sex-offender hired to do service work in her home. Sue had contracted with a major department store to have the air ducts in her home cleaned.  Burdine’s did not conduct criminal background checks on those workers they sent into their clients’ homes.  Sue’s life is over. Had a criminal background check been done, Sue might still be alive today.  The Sue Weaver C.A.U.S.E. was created to promote Consumer Awareness of Unsafe Service Employment.

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Security precautions in the Canadian retail market are on the rise according to a new study by PricewaterhouseCoopers and the Retail Council of Canada. More and more retail stores are employing the use of video surveillance and alarms in their stores in addition to strategically placing more employees on the floor to spot those who suffer from the “sticky finger syndrome.” These measures are being utilized to combat both internal and external theft.

I was a little disappointed to see only a sentence or two about conducting background checks on store employees as the study indicates that 33% of retail theft results from inside jobs. Of course, I understand that that wasn’t the intent of the article written about this study but if retail employers want to decrease the instances of theft in the workplace, it is important that they have information on what constitutes a good background check on a employee. You cannot go wrong with an address history search coupled with a comprehensive criminal records check. Throw a credit report into the mix if the person will be handling money. And don’t forget the sex offender registry search if your employee will be working closely with the public (especially children). Depending on the job type and/or job responsibility, there are always additional services you can add. Retail employers should want to make sure that the person they are hiring does not have theft conviction in their past. If 100% of retailers conducted comprehensive background checks on all of their employees (and not just the 48% that stated in this survey they conduct a criminal check before they hire a new employee), I’d bet you’d see the percentage of employee thefts drop considerably.

Click here to read the article

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Does your employment screening firm hold the appropriate licensing in states such as Nevada? There are over twenty (20) states that arguably have Private Investigators licensing laws related to employment screening. Many don’t require you to be licensed if you don’t operate your business or have an office in their state. While others only require you to have a license in the state(s) where you do operate. Nevada is a rare exception. They require screening firms to be licensed by their state if you have any clients there and,or if you are performing any research there. This research could include contacting a University or Employer in Nevada by telephone for a verification. The law in Nevada is very specific:

In Nevada, no unlicensed person may “engage in the business of private investigator” or “advertise his business as such, irrespective of the name or title actually used.” N.R.S. § 648.060. Compliance with the statute and regulations is monitored by the Private Investigator’s Licensing Board (“Board”). N.R.S. § 648.030. The penalties for engaging in the business of private investigator without a license are stiff: (1) a first offense is a misdemeanor; and (2) second or subsequent offenses are gross misdemeanors. N.R.S. § 648.210. Accompanying fines range from $2,500 (first offense) to $10,000 (three or more offenses) per violation. N.R.S. § 648.165. Even a single act of private investigatory work by an unlicensed individual is considered a violation of the statute. N.R.S. § 648.063.

The Nevada board interprets the statute to require that a corporation obtain a license even if it operates through a licensed private investigator with whom it has entered into an independent contractor agreement. When posed with this scenario, a board official stated that the corporation would still be regarded as engaging in investigative activity subject to the licensing requirements. Many States have adopted statues specifically excluding Consumer Reporting Agencies (CRA’s). Ohio, our home state, is a great example:

Ohio Revised Code; Title XLVII, Chapter 4749; § 4749.01. Definitions (H) “Private investigator,” “business of private investigation,” “security guard provider,” and “business of security services” do not include: (3) A consumer reporting agency, as defined in the “Fair Credit Reporting Act,” 84 Stat. 1128, 15 U.S.C.A. 1681a, as amended, provided that the consumer reporting agency is in compliance with the requirements of that act and that the agency’s activities are confined to any of the following: (a) The issuance of consumer credit reports; (b) The conducting of limited background investigations that pertain only to a client’s prospective tenant and that are engaged in with the prior written consent of the prospective tenant; (c) The business of pre-employment background investigation. As used in division (H)(3)(c) of this section, “business of pre-employment background investigation” means, and is limited to, furnishing for hire, in person or through a partner or employees, the conducting of limited background investigations, in-person interviews, telephone interviews, or written inquiries that pertain only to a client’s prospective employee and the employee’s employment and that are engaged in with the prior written consent of the prospective employee.

When doing RFP’s for background screening companies or when you are simply giving your process a “chest x-ray” (Thank you Thomas Friedman – The World is Flat) , be sure to inquire if the proper licensing is in place. While we don’t agree with the law, and either does the industry association NAPBS, we have been unable to challenge it. In 2005, NAPBS did a position paper on the subject. The general consensus was that they agree with PI licensing laws for those in the field of Private Investigations. We don’t believe employment screening should fall under this umbrella. Without getting too technical, PI’s develop information about subjects. CRA’s are given written authority and verify information that is provided. employeescreenIQ is licensed in the state of Nevada to perform Private Investigations and thus Employment Screening. Is your provider?

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If this study doesn’t convince you to randomly screen your employees for alcohol use (or drug use, for that matter), I don’t know what will. This UK study provides some staggering information on employee alcohol use in the workplace that may leave some of you surprised. While it is great that employers are conducting pre-employment alcohol and drug tests on their employees, it is equally important to continually screen your employees to make sure they are not drinking before work and habitually using illegal substances. Alcohol and drug use are the predominant factors in decreased productivity, absenteeism, and workplace accidents.

Your employee was clean when they started the job, but how about now?

Click here for the study

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More often than not we write our blog articles about background checks in relation to employment. In my opinion one of the most important laws we have in place today is the Brady Bill. The Brady Bill while still flawed in many ways has brought the concept of background checks to the forefront. Officially called The Brady Handgun Violence Prevention Act of 1993, it was signed into law by President Clinton in November of 1993. The act was named after James Brady, who was shot by John Hinckley, Jr. during an attempted assassination of President Ronald Reagan on March 30, 1981.

According to bradycampaign.org, a group devoted to prevent gun violence, the US Department of Justice has released some new figures.

The U.S. Department of Justice just released Brady background check figures for 2006, and they show continued success for this life-saving law:

• Almost 1.5 million prohibited purchasers have been denied at the point of sale since 1994.

• Between 1999 and 2006, 11,058 denied purchasers were arrested by the authorities after they attempted to purchase a gun, with 1,314 arrests in 2006 alone.

• Nearly 40% of the denials in 2006 involved individuals with felony records attempting to purchase firearms. (In fact, 6 out of every 1,000 applications in 2006 were made by felons.)

• From 1999-2006, 183,714 NICS denials were appealed, or 15.5% of total denials during that period (almost 1.2 million), and of those appeals, only 65,695, or about 5.5% of total denials, were reversed.

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