Employment Screening Firms MUST Be Licensed in Nevada

Jason Morris

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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Jason Morris

President & Chief Operating Officer at EmployeeScreenIQ
A veteran screening and risk management professional, Jason Morris founded EmployeeScreenIQ in 1999 and acts as the company’s chief operating officer and president. Morris is a frequent speaker delivering captivating, interactive discussions on background checks, global screening, recruitment and staffing. He educates audiences in best practice initiatives as they relate to organizational employment screening programs. Morris has been quoted in numerous business and industry publications including The Wall Street Journal, MSNBC.com, USA Today, New York Times, among others. He is also a licensed private investigator in the states of Ohio, Illinois, New Jersey, Texas, Arizona and Nevada.
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  • loramadona

    I was really agree to ballot issue in Nevada was a constitutional amendment, ….. to individuals other than temporary employees must be licensed whenever employment .
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    loramadona

    Addiction Recovery Nevada

    Addiction Recovery Nevada

  • This is indeed an interesting piece of information, which I guess would prove to be helpful for the private investigators who are seriously in the business.