EmployeeScreenIQ Blog

There have been a myriad of questions that have arise since Massachusetts governor Deval Patrick signed into law new reforms to the Commonwealth’s Criminal Offender Record Information (CORI) law that will have a significant impact on the state’s employers who conduct criminal background checks. To sort through the mess, we enlisted the help of Seyfarth Shaw labor and employment attorney, Pam Devata. Clearly, these reforms represent an effort to help those with criminal records find employment, but will this come at the expense of employers ability to make an informed hiring decision?

Check out our podcast below.

Listed below are some of the most critical changes that will take effect February 6, 2012:

• Employers can no longer ask if an individual has been convicted of a crime on the initial job application (please note that this requirement is set to take effect November 4, 2010)
• Felony convictions older than or prison sentences completed more than 10 years ago will be removed from the system as will misdemeanors older the 5 years
• An employers can only take adverse action after they have presented the candidate with the CORI report
• Any employer that conducts five or more background checks on an annual basis must have a written criminal offender record policy
• Employers must dispose of an individual’s CORI report not more than 7 years after their last date of employment

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The FTC has announced that they are proposing revisions to the notices that consumer reporting agencies (such as employment screening firms) provide to consumers, and to users and furnishers of credit report information under the Fair Credit Reporting Act (FCRA).

The proposed changes seek to alter the consent and authorization form needed to conduct an employee check as well as the “Summary of Your Rights” document which must be provided to the job applicants before a background check can be conducted.

See notice from FTC below.

The Federal Trade Commission is proposing revisions to the notices that consumer reporting agencies provide to consumers, and to users and furnishers of credit report information under the Fair Credit Reporting Act (FCRA). The FCRA requires the FTC to publish model notices for several forms that must be provided by consumer reporting agencies. The proposed changes are designed to reflect new rules that the FTC and other financial regulators have enacted under the Fair and Accurate Credit Transactions Act of 2003, and to make the notices more useful and easier to understand.

In addition to revising the general Summary of Rights notice, which informs consumers about their FCRA rights, such as how to obtain a free credit report and dispute inaccurate information in credit reports, the FTC also is proposing improvements to the notices that credit reporting agencies provide to users and furnishers of credit report information. The User Notice and Furnisher Notice inform users and furnishers of their obligation to provide certain protections to consumers. The model notices were originally issued in 1997 and revised in 2004. The FTC is accepting public comments on the proposed changes until September 21, 2010. The Commission vote authorizing the Federal Register notice was 5-0. (The staff contact is Pavneet Singh, Bureau of Consumer Protection, 202-326-2252.)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

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We just published our 21st quarterly newsletter, The Verifier, an educational tool and information resource for human resource professionals or anyone interested in keeping abreast of recent employment background screening industry developments. We’ve got some great new content including:

Articles:

• Trends in Employment Screening: 2010 Results
• Background Check Urban Legends
• Credit Reports and the Hiring Process

Legislative Updates:

• Illinois law which severly restricts the use of credit report
• New Reforms to the state of Massachusetts’ CORI background screening system

Multimedia

• EmployeeScreenIQ’s podcasts from the 2010 Annual SHRM Conference

And much, much more. Check it out.

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On August 6, 2010 Massachusetts governor Deval Patrick signed into law new reforms to the Commonwealth’s Criminal Offender Record Information (CORI) law that will have a significant impact on the state’s employers who conduct criminal background checks.  Clearly, these reforms represent an effort to help those with criminal records find employment, but will this come at the expense of employers ability to make an informed hiring decision?

Listed below are some of the most critical changes that will take effect February 6, 2012:

• Employers can no longer ask if an individual has been convicted of a crime on the initial job application (i.e. Ban the Box programs)
• Felony convictions older than or prison sentences completed more than 10 years ago will be removed from the system as will misdemeanors older the 5 years
• An employers can only take adverse action after they have presented the candidate with the CORI report
• Any employer that conducts five or more background checks on an annual basis must have a written criminal offender record policy
• Employers must dispose of an individual’s CORI report not more than 7 years after their last date of employment

For more depth of information about these reforms please check out Seyfarth Shaw attorney, Pam Devata’s legal alert.

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The folks at HR.BLR just published “Smart Practice for Screening Job Candidates” that is worth checking out.  See list below.

Tips for Background Checks

To minimize your liability and still be thorough, follow these smart practices regarding background checks:

1.    Follow a clear policy that requires background checks for all staff. Don’t forget to include background checks for part-time workers, temps, contractors, and volunteers. All checks do not have to be equally extensive, though. High-risk positions, such as those involving financial responsibility, require more extensive checks. Certain positions, such as truck drivers, security guards, law enforcement officers, healthcare providers, and childcare workers, are governed by special laws with their own background check requirements.

2.    Use a job application that requires the applicant to detail all employment, certifications, licenses, education, and other relevant qualifications for the job. The application should require that the applicant sign a certification that the information is accurate.

3.    Use a background check authorization and release form. This form must be separate from the application. In California, whether you conduct the background check yourself or hire an outside agency, you must obtain the individual’s written permission in a separate document.

4.    Don’t rely solely on online research. Conducting Internet research, such as Googling the applicant or looking at the person’s Facebook page, runs the risk not only of being incomplete but also of supplying erroneous information. You might also learn information that you are not permitted to consider without violating discrimination laws, such as whether an applicant is pregnant. Although you may disregard that information when deciding not to hire someone, it could be hard to prove that the information was not a factor if your decision is challenged.

5.    Provide applicants all required notifications. California law has stricter notice requirements than federal law. You must notify the applicant that he or she has a right to know the scope of the investigation and to get a copy of the report. If you use an outside agency, you must supply its contact information. If you rely on information in an agency’s report to decide against the applicant, you must tell the applicant about it before taking the adverse action. You must provide the applicant a copy of the report as well as notice of how to dispute it. If you conducted the check yourself, you must give the applicant copies of public records that you relied on and a notice of his or her rights within a reasonable time.

6.    Know the limits of what you can ask about an applicant’s history. In general, California follows federal law in permitting screening services to report negative information (for example, low credit scores, poor references, and court cases) for only the previous 7 years and bankruptcies for the previous 10 years. Under federal law, criminal convictions can be reported indefinitely, but in California, criminal convictions can be reported only for 7 years (2 years for marijuana convictions), except for certain jobs. You can’t ask applicants if they have ever been arrested, but you can ask if they have been convicted of a crime or have a pending criminal case.

7.    Document your employment decisions. Regardless of whether the material in the background check was key to your decision, if your decision is challenged, you will be in a better position to defend yourself if you have documented the process well.

8.    Store and dispose of all records related to the background check properly. Records containing confidential information gained during background investigations should be stored separately, and access to those files should be limited. Federal law requires the proper disposal of background check information. Paper files should be shredded. When your company disposes of old computers, you must ensure that the information has been erased in such a way that it cannot be reconstructed.

View Full Article

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Utah-based employers with 15 or more employees should take note that effective July 1, 2010 they must use a “status verification system” to verify the employment eligibility of new employees. Utah S.B. 251 makes mandatory the use of the government’s E-Verify portal which determines legal right to work status through the Social Security Administration and Department of Homeland Security.

For more information on the Electronic Employment Eligibility process, please visit us at http://employeescreen.com/employmenti9.asp

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This is a reminder to all employers in the state of Oregon that Senate Bill 1045 that restricts an employer’s use of credit history in employment screening decisions goes into effect July 1, 2010.

Seyfarth Shaw labor and employment attorney, Pam Devata was kind enough to pass on an important guide on who this law affects and how to comply.  See below.

You may recall that Oregon Revised Statute 659A.885 specifically prohibits an employer from obtaining or using credit history for employment purposes of an applicant or employee unless that credit history information is “substantially job-related, and the employer’s reasons for the use of such information are disclosed to the employee orprospective employee in writing.”

The regulations provide guidance on the following:

- The regulations define “employer” to mean “any person who in this state, directly or through and agent, engages or uses the personal service of one or more employees, reserving the right to control the means by which such service is or will be performed.”  Thus, the law likely only applies to employers in Oregon.

-The burden of proving that the employer disclosed its reasons for the use of credit information is solely on the employer.

-”Substantially job-related” is defined as:

(a) An essential function of the position at issue requires access to financial information

not customarily provided in a retail transaction that is not a loan or extension of credit;

(b) Financial information customarily provided in a retail transaction includes

information related to the exchange of cash, checks and credit or debit card numbers; or

(c) The position at issue is one for which an employer is required to obtain credit history

as a condition of obtaining insurance or a surety or fidelity bond.

-Employers may not retaliate against applicants or employees claiming a violation of the law

-It is also an unlawful employment practice for any person to “aid, abet, incite, compel or coerce the doing of any of the acts in violation of OL 2010. Ch. 102.”  As such, CRAs should be careful about assisting employers with adjudication guidelines or hiring criteria dealing with the use of credit information in Oregon.

Interestingly, the regulations do not give any guidance on when an employer has to give the required disclosure of the reasons for the use of credit information, only that the employer bears the burden of doing so.

Oregon has provided a Technical Assistance for Employers hotline at 971-673-0824. The new rules are available online at http://www.oregon.gov/BOLI/LEGAL/docs/RulesSoS0052010.pdf.

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Greenberg Traurig labor and employment attorney, Dan Pasterternak just posted a story about an employer who lost a multimillion dollar judgement over a negative job reference/employment verification which deviated from company policy.  See Dan’s post below which includes his advice for providing employment verifications.

Like most employers, Credit Agricole’s policy is only to confirm dates of employment in response to a request for employment verification, without providing any information about a former employee’s job performance. But that didn’t happen to William Raedle.

Instead, according to court testimony reported in the press,his former supervisor told a prospective boss at Dreyfus Corp. that William had difficulty working with others and had mental issues. Raedle didn’t get the job at Dreyfus. What he did get, however, was a big verdict in his favor against Credit Agricole. After a weeklong trial, a jury in a New York federal court deliberated only five hours to award Raedle $2.4 million in lost earnings, damage to his reputation, and punitive damages, including $200,000 in punitive damages against his former supervisor for interfering with his efforts to get a job at Dreyfus.  (The trial judge vacated the punitive damage awards on the defendants’ post-trial motions, reducing the judgment amount to just over $1.6 million.)

What does this case tell us?

It’s not just what your policy says on paper, but what actually happens that really matters. No policy – whether it’s an employment reference policy, an anti-discrimination or anti-harassment policy, a leave policy, etc. – will amount to a hill of beans if you aren’t following it. The key is making sure that all employees are trained, and, if appropriate, periodically retrained, to comply with company policy. As the case shows, the consequences of failing to actually do what your policy says can be enormous.

The moral of the story is not to stop performing employment verifications.  In fact, we seen and written about instances where an employer failed to provide adverse information and was later successfully sued for not warning the prospective employer, Employment Verifications: Less May No Longer Be More.  Employers must be consistent and must reinforce company policies again and again.

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EmployeeScreenIQ’s newest article explains how to use credit reports fairly, legally, and effectively.

Nearly 50 percent of employers use credit checks for relevant jobs . . . but in these challenging economic times, many have been accused of using credit reports to unfairly deny people work. Legislators are listening to these concerns and some states are passing or proposing legislation designed to limit or ban the use of credit histories. A new article from background screening provider EmployeeScreenIQ is designed to help you:

• Determine when credit reports are relevant to the job.
• Identify red flags among applicants.
• Know what to do when a red flag is discovered.
• Evaluate each applicant or employee on an individual basis.

Download your free copy of “Credit Reports and the Hiring Process: The Value (and Risk) to HR Professionals” by clicking the link below:

Download Here

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Got FCRA?  This letter from a census bureau employee who was terminated due to misinformation on his background check was published in the Minneapolis Star Tribune.  I have highlighted the areas I think deserve special attention and will explain each.  BTW, we’re generally happy that background checks are being conducted.  We just think that they might want to evaluate their screening practices.

“I was excited to have the opportunity to be a part of the Census staff giving me the chance to create the change that I seek in the accuracy of the official count of current US residents. As a part of the training process for US Census Enumerator I was required to submit my finger prints to the FBI for a thorough criminal background check. I was swiftly contacted to have my census materials taken away due to the fact that my finger prints matched an federal arrest record. Of course upon review of the case I was approved for work with the census the news, however came conveniently after someone had already taken over my responsibilities for census work.

Since I am eligible for work in the next round of census jobs I just have to sit tight until I am contacted again by the local main office.

Unfortunately the census bureau has no authority to share any information with me regarding my background check and when or what I was arrested for, or what crime I was guilty of. So, now I have to pay to request my own background check, get finger printed again, and speak directly with the FBI.

Why do I suddenly feel like the FBI owes me lost wages and pain & suffering?”

FBI Database and Thorough Criminal Record Search- These two phrases contradict each other.  Just ask the FBI.  They’ll tell you that their database is far from comprehensive and was designed as a law enforcement tool.

Swiftly Contacted to Have Materials Taken Away- Interesting.  Sounds as if the person wasn’t given a Pre-Adverse Action notice with a copy of their record as mandated by the FACT Act.  That said, they probably weren’t provided with an Adverse Action notice either.

Approved for Work After They Gave Someone Else the Job- Just asking, but wasn’t the census bureau supposed to hold the position open or offer a similar position in case the employee successfully disputed the findings of the background check?

Census Bureau Can’t Share Findings of the Background Check- Seriously? I think somebody forgot to read the latest edition of “Employment Background Checks for Dummies”.  Okay, it’s not a real book, but maybe I’ve found a second career (as a dummy and an author).

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