At long last, we are finally posting the recorded version of our webinar, “Your Applicants Have Something to Hide: Why You’re Not Finding It”.  Check on our description below and click on any one of the hyperlinks to the webinar landing page.

A school teacher is accused of striking a child. The background check had reported no record of criminal activity; however, a school investigation following the incident reveals that the teacher had a pending assault and battery case..

Sadly, background check horror stories are more common than you think. Don’t let it happen to you!

Drawing from 13 years of experience, EmployeeScreenIQ’s webinar explains how to ensure accurate criminal background checks. You’ll also learn:

• Why taking “shortcuts” can lead to compromised background checks
• How companies can inadvertently hire violent criminals
• How to maintain a positive candidate experience, even if negative results are revealed

We are pleased to announce the appointment of Angela Bosworth to vice president of compliance and general counsel at EmployeeScreenIQ. In her new role, Angela will lead corporate compliance initiatives and help shape strategy that positions the fast-paced organization for future growth.

Angela joins EmployeeScreenIQ with broad industry experience including more than 20 years as a licensed attorney and over 10 years in the background screening industry, most recently as executive vice president of the national screening company OPENonline. She has extensive expertise in employment law, government affairs, compliance best practices and policy initiatives. She serves on the Board of Directors of the National Association of Professional Background Screeners (NAPBS), is a member of the NAPBS Background Screening Credentialing Council (BSCC), and is actively involved in the Society for Human Resource Management (SHRM) and ASIS International, the preeminent organization for security professionals. Bosworth, a frequent speaker and educator to the industry, is also a member of the Ohio State and Columbus Bar Associations.

In her role with EmployeeScreenIQ, Bosworth will have direct oversight and management of compliance programs, and will provide guidance in complex legal matters including state and federal legislation, EEO law, client education, adjudication, pre/adverse action process, NAPBS Accreditation and client and vendor contract management. Adding Bosworth to the leadership team allows the organization to expand on its commitment to best practices and provides a greater level of legal expertise to the company, clients and business partners.

Angela has an impressive track record in the background screening industry and we’re looking forward to her contributions. We anticipate much success as she takes charge of our existing compliance programs and develops new initiatives that reflect our ongoing commitment to excellence, innovation and high professional standards.

View Press Release

We just published The Verifier XXIV, Fall 2011 Edition, a publication intended as an educational tool and information resource for human resource professionals or anyone interested in keeping abreast of recent employment screening and background check industry developments.

Highlights of this issue include the following:

Articles:

• Time to Streamline Your Background Screening Process? Check Out Our Latest Video
• No Shortcuts. Smarter Screening Equals Intelligent Hiring.
• Top Commercial Airline Flies High With EmployeeScreenIQ
• 2011 Background Check Turkey Awards
• Background Checks Gone Wild Hurt Us All

Announcements and Legislative Updates

• EmployeeScreenIQ Rated Top 5 Screening Firm in U.S.
• California Governor Bans Use of Employment Credit Reports
• EmployeeScreenIQ Announces Integration with Taleo Business Edition
• EmployeeScreenIQ Recognized as Fastest Growing Company

Check it out!

We’ve been spending a lot of time talking about why shortcuts in the background screening process lead to trouble.  There are a number of consequences of doing so including not finding the things you should have and using bad information to make a hiring decision.  It is the latter, that get everybody into hot water: background screeners and employers alike.

This video, depicts why it is imperative to ensure you are using accurate and up to date information before making a hiring decision.

For those interested in this topic, don’t forget to sign up for our November 17th webinar entitled “Your Applicant’s Have Something to Hide: Why You’re Not Finding It” in which we’ll delve into how to find the most comprehensive and accurate data so that you can hire with confidence.   And as a bonus, you’ll earn HRCI credits for participating.

Horror stories about sloppy background checks fuel the perception that employment screeners don’t care about the accuracy of their reporting – and that employers blindly make hiring decisions.

EmployeeScreenIQ’s newest article explains why smarter screening equals intelligent hiring. Drawing from 13 years of experience, this article illustrates what to consider when developing an employment screening program.

Employers spend a lot of time, money and effort identifying the perfect candidate. A background screening provider shouldn’t jeopardize that hard work!

Download your free copy of “No Shortcuts: Why Smarter Screening Matters,” by clicking the link below:

http://www.employeescreen.com/no_shortcuts_article.pdf

Oh don’t mind me.  I’m just playing word association with the following phrase “EEOC Meeting to Discuss Use of Criminal Records”.  Feel free to send in your own suggestion for my word cloud above.

Why the sarcasm?  Where to start?  We asked earlier this week if the EEOC was willing to have an honest and open dialogue on employers’ use of criminal background checks. We got our answer pretty quickly.  If the list of those who would testify wasn’t answer enough, check out the press release which the EEOC distributed just hours after the 4 hour meeting was concluded.  The key word here is “distributed” since it was clearly “written” well before the meeting.

Instead of listening to both sides of the issue, the EEOC paraded out a cadre of individuals damning the use of criminal records in the hiring process.  No one was there to talk about the liability employers face.  No one was asked to talk about the victims of violent criminal activity in the workplace.  No one was called on to talk about the mounting losses employers shoulder due to internal theft.  Oddly, no one was there to discuss the nation’s largest consumer of employment background checks, the U.S. government whom the last time I checked, the EEOC was a part of.

They favored testimony from the Department of Justice who offered the Blumstein study on the point of redemption as ironclad and unimpeachable rather than as a limited study, based on limited criminal activity, based on a limited geographical area.  They listened to testimony that the FBI’s database only includes about 50% of all criminal records.  Never mind that those in our industry use far more accurate methods to conduct criminal background checks.  They heard testimony that talked about employers running roughshod over applicants’ rights and ignored that fact the the FCRA and state laws provide protection.

According to those in attendance, here’s where it stands.  There are two EEOC commissioners who think that the commission should overhaul their guidance on employers use of criminal background checks.  There are two commissioners who either think that the current guidelines are sufficient or should be slightly modified.  And there is one commissioner who seems to be in the middle and will most likely be the ultimate deciding factor.

In the meantime, the EEOC has allowed a 15 day comment period on the issue.  Perhaps they’ll consider opinions counter to theirs’ then.  I’ll be holding my breath until then.

Stay tuned.  We have definitely not heard the last of this issue.

P.S. Once the smoke clears out of my ears, I’ll publish some of the materials that were provided to the EEOC in support of criminal background checks.

We just published The Verifier XXIII, Summer 2011 Edition, a publication intended as an educational tool and information resource for human resource professionals or anyone interested in keeping abreast of recent employment screening and background check industry developments.

Highlights of this issue include the following:

Articles:

• Trends in Employment Background Screening: 2011 Results
• Introducing iEmployeeScreen mobile: Background Screening News at Your Fingertips
• A Modest Proposal: Social Network Background Checks Still Concern Me
• Background Screening Under Fire by The EEOC and Others
• Background Screening and The Candidate Experience

Announcements and Legislative Updates

• EEOC Hearing Scheduled on Use of Criminal Background Checks
• Connecticut Passes Law to Curb Use of Credit Reports
• Maryland Gov. Enacts Law to Curb Use of Credit Reports
• EmployeeScreenIQ Gives Back to the Community

Check it out!

Effective July 21, 2011, Fair Credit Reporting Act (“FCRA”) adverse-action and risk-based pricing notices must disclose any numerical credit score that contributed to the: (1) adverse action; or (2) extension of credit on terms materially less favorable than those available to a substantial portion of customers.

If you are hearing this for the first time, you aren’t alone.  And here’s why most of you shouldn’t care.

These rules only apply if you are evaluating a credit score.  Remember that employment credit reports (most commonly used on employment background checks) do not include a credit score.

Why are we bothering you with this useless information if it doesn’t affect you?  Well, to let you know if you hear about it, that it most likely doesn’t affect you. If you are reviewing credit scores, you might want to read the information below provided by Seyfarth Shaw labor and employment attorney, Pam Devata.

The FCRA requires a person taking adverse action based in whole or in part on a consumer report to provide an adverse-action notice. Section 1100F of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act) amended Section 615(a) of the FCRA to require users of credit scores to include those scores, and related information, in adverse-action notices provided to consumers. The requirement to disclose credit score information in FCRA adverse-action notices also applies to adverse-action decisions not related to credit.

Consequently, when a user takes any adverse action based in whole or in part on information contained in a consumer report, regardless of the weight of the credit score in the decision, the user must provide the consumer with the following:

*          The credit score;

*          The range of possible credit scores under the model used;

*          All of the key factors that adversely affected the credit score

(not to exceed four factors, unless one factor is the number of inquiries made with respect to the report, in which case the key factors may not exceed five);

*          The date on which the credit score was created; and

*          The name of the person or entity that provided the credit score.

New Risk-Based Pricing Notice Requirements:

Risk-based pricing refers to the practice of setting or adjusting the price and other terms of credit offered or extended to a particular consumer to reflect the risk of nonpayment by that consumer. The FCRA also requires a creditor to provide a risk-based pricing notice to a consumer when the creditor uses a consumer report in connection with a credit application or review of an existing account and, based on the report, grants credit or amends existing credit on terms that are materially less favorable than the most favorable terms obtained by a substantial portion of consumers. The Federal Reserve Board (the

“Board”) and the Federal Trade Commission (“FTC”) recently amended their respective risk-based pricing rules to require disclosure of credit scores and information relating to credit scores in risk-based pricing notices if a credit score of the consumer is used in setting or adjusting the material terms of credit.

The Board’s and the FTC’s rules require the same additional information to be included in a risk-based pricing notice as is required for the adverse-action notices.  In addition, the risk-based pricing notices must include a prescribed statement explaining credit scores that includes a disclosure that the credit score was used in setting the credit terms. For example, a statement such as:

*          “Your credit score is a number that reflects the information in

your credit report.  We used your credit score to set the terms of credit we are offering you.  Your credit score can change, depending on how your credit history changes.”

The Board’s and the FTC’s rules also recommend that the risk-based pricing notices contain optional contact information for the entity that provided the credit score.

Common Questions:

The new rules raise a lot of questions, many of which are addressed in the commentary to the rules, such as: (1) whether credit score disclosures are required when only the credit score of a guarantor, co-signer, surety, or endorser is used (no disclosure is required); (2) whether there are safe-harbor model notices that can be used (yes there are); and (3) what to do when dealing with proprietary scores, three-party financing transactions, more than one applicant, no credit score, and multiple credit scores (the commentary addresses these questions as well).

Two of the more common questions, however, concern “what is a credit score” and “when is a credit score used.”  The commentary makes clear that a score that is not used to predict creditworthiness, such as an insurance score, is not a “credit score” and need not be disclosed.  The commentary also makes clear that “use” occurs at a very low threshold and if the credit score played any role in the decision (for example, if the credit score led the user of the credit score to investigate further and the results of that investigation played a role in the decision), then the credit score was used and must be disclosed.

Many of these same questions can also be answered by reviewing the “Forty Years of Experience with the Fair Credit Reporting Act” report that the FTC issued today and is available at http://www.ftc.gov/os/2011/07/110720fcrareport.pdf.  This report is the most up-to-date FTC guidance on interpreting the FCRA.

Philadelphia Mayor Michael Nutter has signed into law the “Fair Criminal Record Screening Standards” which will prohibit both public employers and private employers with 10 or more employees from asking applicants if they have been convicted of a crime on the job application.  The law also prohibits employers from making an adverse hiring decision based on an arrest that did not result in a conviction.

This “Ban the Box” legislation (Bill No. 110111-A) was signed into law on April 13, 2011 and will take effect on July 12, 2011.   It is designed to allow those convicted of criminal activity a chance to make it further into the process before an employer can make such inquiries.

Background checks are still permissible and given the fact that employers cannot ask about convictions, it is vitally important they are conducted to ensure an informed hiring decision.

“Ban the Box” legislation is picking up steam across the country as many cities, towns and states have passed or are considering laws which they say will allow those with criminal records to have a fair chance of finding employment.  Most of these laws only affect public employers.  However, the states of Massachusetts and Hawaii are similar to Philadelphia in that they also apply to the private sector as well.

For more information about this law, check out Seyfarth Shaw’s publication, Philadelphia Passes A New “Ban The Criminal Box” Law That Applies To Private Employers.

I think we’ve been fairly consistent with our message concerning the state of employment background checks in 2011.  There are many laws that govern their use and in truth, they’ve been around for quite some time.  However, we are seeing more and more legislation in this regard.

Labor and employment attorneys Dani Sanchez-Gleason at BMC Software Inc. and Richard Greenberg at Jackson Lewis recently published a must-read article about the top laws that employers need to know about background checks. I picked out a few highlights below but definitely encourage you to read their entire article, ” Top 10 State Background Issues”.

Compliance with State-Mandated Background Checks

Some industries, such as health care and education, often are required by state law to conduct specific background checks on industry employees.   In some instances, these checks can be conducted by a consumer reporting agency; in other circumstances, these checks need to be conducted by a state agency with access to the FBI or a similar database (in the case of criminal checks).   Employers must ensure compliance with such requirements.   There is not a level of consistency across the states as to these requirements, so a state-specific analysis is necessary.  For example, in some states but not others, an employer is required to conduct specified background checks on any individual who will be entering a home to provide service, such as a repair technician.

Compliance with State Background Check Procedural Requirements

Often, in developing compliant processes for background checks conducted through consumer reporting agencies, employers only consider the federal Fair Credit Reporting Act.  However, there are approximately a dozen states which have promulgated state mini Fair Credit Reporting Acts.  These mini-FCRA laws often track the FCRA’s consent and disclosure, pre-adverse action and adverse action requirements.   However, in certain instances, additional disclosure and/or language is required.  For example, California law requires an employer to disclose the specific checks being conducted as well as to provide information regarding the individual’s right to inspect the file maintained by the consumer reporting agency.  Other states like Minnesota and Oklahoma mandate that employers notify individuals of their right to obtain a copy of a report in all circumstances.  Further, in New York, depending on the scope of the check, a disclosure of the state’s limitations on use of criminal record information may be required.

Understand Reporting Limitations Imposed on CRA’s by State Laws

To avoid frustration, it is vital that all employers understand the limitations imposed on consumer reporting agencies by applicable state law.  Under the FCRA, a consumer reporting agency is not limited from reporting any convictions, but is generally limited to reporting other adverse information that is more than seven years old unless the individual’s compensation would be in excess of $75,000 per annum.   However, some state laws restrict reporting of convictions over seven years old unless certain salary thresholds are satisfied.  For example, in New York, criminal conviction information over seven years old may not be reported unless the individual is expected to earn over $25,000 per year.  Further, some state laws prohibit reporting of any arrest information and/or information regarding pending arrests.  While there is an argument that some of these reporting limitations are preempted by the FCRA, the available caselaw on this issue is limited.  These limitations reiterate the importance of a broad inquiry on the employment application regarding criminal history.

Follow State Limitations on Use of Convictions for Disqualification

While federal law does not impose any per se prohibitions on an employer’s ability to make job-related decisions based on an applicant’s or employee’s criminal conviction history, certain state laws impose such restrictions.  A handful of states specifically prohibit an employer from disqualifying an applicant/employee unless the conviction is job-related based on an individualized analysis.  In fact, New York imposes the strictest standard and requires an employer to consider numerous factors prior to making a disqualification decision, including the length of time since the offense and the individual’s rehabilitation.  Simply put, in New York, absent a conversation with the individual prior to disqualifying, there is a strong argument that the employer has not complied with the statute.  Again, industry requirements must be considered.  For example, in many states, alcohol beverage control law restrictions often require employers to disqualify applicants/employees with certain convictions from positions in which the establishment maintains a liquor license.

Of course, due to the EEOC’s focus on the adverse impact of employers’ use of information regarding criminal history, it is strongly recommended that all decisions be made based on an individualized, job-related analysis and that employer policies do not contain per se disqualification standards.

Analyze the Propriety of Internet Checks

Employers are increasingly turning to social media for information about job applicants. So long as the employer does not violate state or federal discrimination laws, nothing currently prohibits an employment decision based on information an applicant places in the public domain.  Nevertheless, employers should balance the need to obtain information against the risks associated with such searches.  Federal and/or state laws prohibit employers from basing employment decision in whole or in part on protected characteristics, such as race, age, sexual orientation, marital status, disability, genetic information sexual orientation and political affiliation.  Employers also should avoid circumventing a potential employee’s privacy settings by pretending to be someone else in order to gain access to a restricted network. A best practice is to obtain consent or at least disclose to individuals such checks are conducted.

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