Year in Review: Hiring, Background Checks, and the Top 5 Legal Trends
December 11, 2014
I almost can’t believe it myself, but it’s already December. And this point in the year means it’s almost time to close the books on 2014. As the year comes to an end, I’ve spent some time looking back at the legal trends in hiring and employment screening throughout 2014. Here is a list of the top five background screening and employment issues from 2014 that are worth reflecting on as we get ready to raise a glass to ring in the New Year.
1. An Uptick in Job Growth
Let’s start with the good news. Hiring is up. Job growth for 2014 is ending on a strong note, and the government’s November jobs report was good. And I mean really good. The US economy had the biggest gain last month since January 2012, adding 321,000 jobs. Unemployment clocked in fairly low, at 5.8 percent. It all adds up to a report card in the A range, when all that was expected was a C or maybe a C+. November set a new record as the 50th consecutive month of job gains. As business analyst Jill Schlesinger put it, “2014 has become the best year for job creation since 1999!” (Cue the Prince music, please.)” That’s welcome news for job seekers and businesses.
2. FCRA Class Action Lawsuits
With more hiring comes more potential for litigation. Federal laws that regulate hiring and background checks are somewhat complex, to say the least. It was a year that set new records for Fair Credit Reporting Act (FCRA) class action claims and settlements. Perhaps employers got a little bit rusty during the slow years. But the more likely scenario is that plaintiffs’ attorneys got wise and turned to the courts to enforce the letter of the law. The blitz of class action suits caught many employers and background screening companies alike off guard. Record breaking settlements like the $6.8 M paid out by Publix and the $4M paid out by Dollar General announced in October tell the story. This is one trend that, unless checked by the courts, will continue into the New Year.
3. Ban the Box Laws Went Viral
Another huge legal trend that caught fire in 2014 is ban the box. In fact, 2014 will be remembered by some as the year that ban the box laws went viral. For those of you who are not familiar with the term, ban the box is a nationwide initiative to remove the check box from job applications asking about criminal history. Ban the box laws have been passing at the state, local, and even county level, creating a patchwork of laws that have become an unmanageable tangle for employers. The legal ramifications are still being sorted out, but in jurisdictions that have passed a ban the box related law, employers (either public, private or both) are not only required to take the checkbox off of applications, but are often precluded from asking about criminal history until post offer or at least after the initial interview. Some cities and states (San Francisco, for example) also throw special job-related tests and notice requirements into mix, raising preemption issues and overlap with the EEOC guidance. The result is a legal tangle for employers everywhere. I hope that 2015 is the year we sort out the mess.
4. Big Data Use in Screening and Hiring
Big Data might win my vote for the B.S. buzzword of the year of 2014. The term was thrown around in 2014 almost as much as “The Cloud” was in 2013. But overuse and occasional misuse of the term doesn’t make it any less important. In the past year, employers significantly increased their reliance on technology to parse information about job candidates or existing employees. Big Data is increasingly tapped by employers and recruiters to find candidates with the right skill set and experience, and to predict success in the workplace. Companies like Monster are using big data technologies to sift through millions of smaller data sets to produce results instantly. What used to take hundreds of individual queries is now being accomplished at an astonishing pace. A startup called Gild made a splash in 2014 with its technology platform that culls big data to score potential hires in the technology field. If all of this sounds too good to be true, you’re probably right. The use of Big Data has raised legal issues about consent, consumer privacy and data security. Not to mention ethical issues. It will be interesting to watch the Big Data debate continue, and see how the courts and regulators like the FTC will enforce consumer protections along the way.
5. Using Social Media to Recruit and Screen Employees
Social media showed no signs of slowing down in 2014. Employers have continued to experiment with using social media to recruit, screen and monitor employees. The EmployeeScreenIQ 2014 trend survey revealed that thirty eight percent (38%) of employers search online media for information about their candidates as part of the screening process. Eighty percent of those who do check online sites turn to LinkedIn for information, followed by search engines (63%) and Facebook (48%). The potential for legal issues when using social media has not diminished, which include EEOC and discrimination claims, accuracy issues, consent and privacy concerns. The seemingly innocent Google search can lead you down a risky rabbit hole if you’re not careful. Many of the legal issues that have been bubbling beneath the surface finally came to light in 2014, including a case against LinkedIn alleging FCRA violations. Social media will stay on the watch list for 2015 as well. Looking back overall, 2014 was a pretty darn good year. The legal challenges and trends that we followed have created a mixed bag for employers. If the economy continues in its current growth mode, I’m sure that new challenges will turn up as well. Hopefully we all learned a few things that will help us well into the next 12 months. Happy New Year–see you in 2015!
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