A recent news piece by WBAL TV in Baltimore related the story about a background check company that suddenly went out of business – closing its doors with no notice and leaving job applicants in the lurch. The company Worldwide Management, partnered with the state of Maryland in doing fingerprints. The company collected the fees from persons who needed fingerprinting done, and paid a processing fee to the state. The company owes the state over $300,000.
And the people who were waiting on fingerprint results? Fortunately an update to the state of Maryland’s website, alerts customer that Worldwide Management no longer works with the state, and added “former customers with a receipt can be re-fingerprinted at no charge.” These consumers were the lucky ones, since there’s no guarantee that when a company closes and takes your money that you’ll get it back.
What you can do to protect yourself? We recommend you ask the following questions and consider the suggestions below when you’re interviewing a prospective background screening provider:
• How long has the company been in business? In general, established companies are more stable. An interview with another background vendor said he had “seen a number of similar fingerprinting businesses come and go” – ones that open then close down quickly, some even just days later.
• Is the company accredited? In order to become accredited, a background screening company must pass a demanding onsite audit of its policies and procedures as they relate to the following six areas: consumer protection, legal compliance, client education, product standards, service standards, and general business practices. Only about two percent of background screening companies in the U.S. are accredited. Accreditation demonstrates a company’s commitment to excellence in backgrounds.
• Check the Better Business Bureau (BBB). Most people are familiar with the BBB. Check the company’s rating as well as any customer complaints.
The events reported were unfortunate for the people who relied on this business to do what it promised to do. Following the above suggestions may one day save some people – possibly you – from having the same thing happen.
Earlier this month, we published a blog about proposed amendments to “ban the box” legislation in San Francisco. On February 17, 2014, Mayor Ed Lee signed the ordinance, which Bloomberg Law states will go into effect “30 days after signing and becomes operative in 180 days.” It affects employers with 20 or more employees in San Francisco. And as we shared in our initial blog, the ordinance does not prohibit criminal background checks, but employers cannot ask about criminal history on the application or during the first interview.
The article “San Francisco’s Board of Supervisors “bans the box” and further complicates criminal history checks by the city’s employers” states that the new “restrictions supplement those already imposed by the federal Fair Credit Reporting Act (FCRA) and arguably make San Francisco the toughest jurisdiction in the U.S. for employers to use criminal history.” While employers should familiarize themselves with the legislation, the following are some significant items they should be aware of.
Adverse Action Notice: If an employer rejects an applicant based on criminal history, a pre-adverse and a final adverse notice are required.
• The notice must be provided regardless of whether the employer obtains the criminal history information through the applicant’s self-disclosure or a background report provided by a consumer reporting agency (CRA),
• The notice must identify the specific criminal history that provides the basis for the adverse decision, and
• The employer must wait at least seven days from the date of the pre-adverse action notice before taking final adverse action. Note, under the FCRA, employers are required to wait for a “reasonable time,” further clarified by the Federal Trade Commission (FTC) in an opinion letter as at least five days.
In keeping with EEOC guidelines, San Francisco employers can consider criminal history information only if it has “a direct and specific negative bearing on [the applicant’s] ability to perform the duties or responsibilities necessarily related to the employment position.”
Posters: San Francisco’s Office of Labor Standards Enforcement (OLSE) is required to publish a poster within six months of when the new rules go into effect. Employers have to display the poster “in each San Francisco location where applicants or employees visit and send the poster to each labor union that represents employees in the employer’s workplace. The poster must provide the following information in English, Spanish and Mandarin:
“(a) the criminal history information that employers are prohibited from considering;
“(b) the restrictions on employers’ inquiry into criminal history;
“(c) the individual’s right to submit information about rehabilitation and mitigating factors, a list of those factors, and the timeline for providing the information; and
“(d) contact information for the OLSE to report suspected violations.”
Non-compliance: The article outlines the penalties for not complying with the ordinance, and these could be significant. “The City can pursue civil remedies for violation of the Ordinance, including an injunction, reinstatement of the employee, back pay, benefits, $50 per employee for each day the Ordinance was violated, and attorneys’ fees and costs. Alternatively, the OLSE can pursue administrative enforcement which, during the first 18 months after the Ordinance’s effective date and for a first violation, is limited to a warning and an offer of assistance with compliance. After the initial grace period, the OLSE can seek penalties of up to $50 per employee for a second violation and of up to $100 per employee for each subsequent violation. Employers must retain records related to the hiring process for three years and provide them to the OLSE for inspection upon request.”
We encourage employers doing business in the area to review their hiring practices and their application forms to comply with the new regulations. And if you have questions about compliance, Corporate Screening is here to assist you.
On February 12, 2014, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) announced that it is working to establish a drug and alcohol clearinghouse for all national commercial driver license (CDL) holders. Currently there is no single database of this type, and establishing one would make it easier for employers to find out if a driver is prohibited from operating a commercial vehicle due to failing to comply with federal drug and alcohol regulations.
Currently, employers are required to screen a driver’s CDL qualifications based on that person’s driving record. Under the proposed rule, a clearinghouse would be established and employers would have to conduct pre-employment searches on new drivers, as well as annual searches on their employed drivers. The FMCSA release also stated that:
“FMCSA-regulated truck and bus companies, Medical Review Officers, Substance Abuse Professionals, and private, third party USDOT drug and alcohol testing laboratories would be required to record information about a driver who:
• Fails a drug and/or alcohol test;
• Refuses to submit to a drug and/or alcohol test; and
• Successfully completes a substance abuse program and is legally qualified to return to duty.
Private, third-party USDOT drug and alcohol testing laboratories also would be required to report summary information annually. This information would be used to help identify companies that do not have a testing program.
To ensure the privacy of drivers involved, each CDL holder would need to provide his or her consent, before an employer could access the clearinghouse.
Drivers who refuse to provide this information could still be employed by the truck or bus company; however, they could not occupy safety-sensitive positions, such as operating a commercial motor vehicle.”
A statement released by the American Trucking Association (ATA) praised the FMCSA for developing this proposal. Indeed, such a move is one that will help ensure safer roads for everyone.
In a recent client alert, Corporate Screening shared with clients that Whole Foods may be in a lot of trouble for allegedly violating the federal Fair Credit Reporting Act (FCRA). Here are the details contained in the alert:
On February 9, 2014, a class action lawsuit was filed in the U.S. District Court for the Northern District of California alleging that Whole Foods Market California, Inc. violated the FCRA because their disclosure form authorizing a background check (aka consumer report) did not comply with the FCRA statute that the document “consists solely of the disclosure.”
The complaint filed in Gezahegne v. Whole Foods Market California Inc., Case No. 4:14-cv-00592, contends that the online job application for Whole Foods contained a disclosure/authorization form that included language releasing those who obtained the consumer reports from all liability. The suit argues that this additional language made the form “facially invalid” as the form no longer constituted a “document that consists solely of the disclosure.”
The suit further alleges that the consent form contained several other paragraphs including an admission that the applicant has not knowingly withheld any information that might adversely affect his chances for employment; the application does not create an employment contract; the applicant waives receipt of a copy of any public record.
Please note, the FCRA considers the Disclosure and Authorization to be two separate notices and an FTC opinion letter states the notices can be in a single document. However, if the disclosure and authorization are in a single document neither the disclosure nor authorization should contain any extraneous information or notices.
The lawsuit seeks damages in the amount of $1,000.00 for each individual for whom Whole Foods obtained a consumer report between January 28, 2009 and the present. As you can imagine, this class could consist of thousands of individuals.
If you’ve read our past blogs and newsletters, you know that Corporate Screening has mentioned the importance of providing a “clear and conspicuous” form that “consists solely of the disclosure” prior to requesting a consumer report. This lawsuit serves as a stark reminder of the importance of adhering to this main tenant of the FCRA.
Employers, please review your disclosure and authorization forms to ensure that they comply with FCRA regulations. Any disclosures you wish to make to applicants regarding other aspects of the onboarding process should not be conflated with the FCRA disclosure.
If you have any questions relating to compliance with the FCRA or other laws or regulations, Corporate Screening is here to assist you. We offer a Screening Program Assessment (SPA) which will assess your current background screening program and measures your program against industry standards, best practice and legal compliance.
Corporate Screening wanted to share with employers that last week the Equal Employment Opportunity Commission (EEOC) released statistics on its 2013 enforcement and litigation. The data is available on the EEOC website at: http://www.eeoc.gov/eeoc/statistics/enforcement/index.cfm.
Employers may be interested to learn that in 2013 the EEOC recovered the most money ever through its administrative processes, taking in $372.1 million. In addition, of the 131 merit lawsuits filed in 2013 alleging discrimination, the most were under Title VII of the Civil Rights Act of 1964, with 78 of this type filed.
There are a myriad of statistics, with data grouped in various orders. For example, you can view the charge statistics by type for dates that range from Fiscal Year (FY) 1997 to FY 2013, and the information is also available broken down by state. Charges by specified type (such as ADA charges, color-based charges, harassment charges, etc.) are also provided.
A JD Supra post suggests that employers review this data “to take proactive steps to reduce the number of charges going forward” and to “compare their own statistics to the EEOC’s data, both on a regional and national basis.”
A recently published SF Gate article announced that on Tuesday, February 4, 2014 San Francisco’s Board of Supervisors unanimously passed new “ban the box” legislation that will affect most employers and housing providers in San Francisco. As with previous legislation, the new proposal would prohibit them from asking about criminal history on applications, and jobs where criminal history is relevant are exempt from it.
“Ban the box” law is not new in San Francisco, or in California. The current city law preventing public employers from asking about criminal history on applications has been in place since 2006, and in 2013, the state took the question off public employment applications. The new proposal would extend the law, and continues to permit background checks conducted later in the hiring process.
The proposal must be voted on once more before being sent to the mayor.
The Salt Lake City Weekly recently published a news blog about a proposed law in Utah that would prohibit employers from accessing information unrelated to convictions when performing background checks. “Current Utah law allows a company doing a background check on a potential hire to access information of an alleged crime even if an individual was later acquitted by a court or even if prosecutors declined to press charges.”
The bill, SB 145, passed unanimously from committee. If made law, it would mean that in cases where people were arrested and acquitted, or if charges were dropped, “these records and the unforgiving stigma they bring with them would not be made available to employers and other entities seeking the information.”
Before becoming law, the bill will be discussed and voted on in the Utah Senate. Corporate Screening will continue to follow the progress of this bill and let you know how this may impact our clients.
In a recent CNN interview, the president announced that the White House is working with about 300 companies to establish “best practices” designed so that organizations “Do not screen people out of the hiring process just because they’ve been out of work for a long time.” Approximately four million people in the nation are considered long-term unemployed, which is defined as “out of work for 27 weeks or more.”
Businessweek.com quoted Gene Sperling, director of the White House National Economic Council who believes “the executive order and corporate commitments would make “a big difference” in improving job prospects for people who have been out of work for an extended period.” As support, he referred to a 2013 employment study that indicated people who had been unemployed for one month were 45% more likely to receive an interview for a job opportunity than people who had been unemployed for eight months.
Are unemployed workers being discriminated against? It appears to be a consideration, and one that has been referred to in the not so distant past. The CNN article reported that in 2011, the President wanted Congress to enact legislation that would “prohibit discrimination based on unemployment at companies with more than 15 workers. Bills were introduced in the Senate and House, but little progress was made.”
Additionally, in February 2011, the Equal Employment Opportunity Commission (EEOC) held a public meeting “to examine the practice by employers of excluding currently unemployed persons from applicant pools, including in job announcements” with topics that included “Unemployment Status Screening” and “Impact on Unemployed Persons.”
The economy has recovered since the recession, but the job market is still not strong. Not everyone who wants to work can get a job. Many others have jobs, but not in their field of choice, or they may be working at several part-time positions.
What do you think? Are the long-term unemployed being discriminated against? And will these types of efforts to create “best practices” in hiring help?
This week Massachusetts Senator Elizabeth Warren, along with six co-sponsors, introduced a bill that would ban companies from using credit reports in making hiring decisions. This bill is no surprise at all, as there has been a nationwide trend of limiting the use of credit reports in hiring since the economic crisis of 2008. Most of the 10 states that have passed this type of legislation have done so in the last couple of years.
The bill, named the Equal Employment for All Act, would amend the Fair Credit Reporting Act (FCRA) to prohibit credit reports as a basis for making hiring decisions with an exception for positions requiring national security clearance. State laws have much wider exceptions, especially for positions in the financial industry. Washington prognosticators do not give this bill much hope of becoming law and any law of this type would almost certainly have more exceptions than those in the initial bill.
This news does bring to light many misconceptions when it comes to credit reports and pre-employment background screening. Most news surrounding this bill sites a survey from the Society for Human Resource Management (SHRM) in 2012 which revealed that 47% of employers utilize credit reports on some or all of its potential employees. What the study does not reveal is that most companies do not run credit reports on a majority of their employees. It is our experience that, while many companies may run credit checks on some potential employees, the percentage of employees is very small. Most reserve the searches for executive level positions or those that will have access to large amounts of cash or have check writing authority. In fact, we’ve seen a trend where fewer and fewer companies run credit reports on a smaller and smaller percentage of their hires.
It has also been widely reported that employers are using a credit score to make hiring decisions. This is inaccurate information and, in fact, is not possible. What news reports have failed to mention is that a pre-employment credit check differs from a credit check that might be run for a loan, apartment, etc. A pre-employment credit check does NOT include a credit score. This is important because it prevents employers from establishing a bright-line policy to not hire individuals with a credit score below a certain number. If employers are using credit information to make employment decisions, at the least, they have to look closely at the report.
While a federal law banning the use of credit may not be imminent, we are likely to see more states pass laws limiting the use of credit reports in hiring decisions. The National Conference of State Legislatures (NCSL) reports that 45 bills in 25 states were introduced in 2013 alone. See: http://www.ncsl.org/research/financial-services-and-commerce/use-of-credit-info-in-employ-2013-legis.aspx
You can read the bill introduced by Senator Warren here
Corporate Screening will continue to monitor this legislation and keep you apprised of any updates.
E-Verify users should be aware of a new enhanced security feature. This recent update detects and prevents the potential fraudulent use of Social Security numbers (SSN) for employment eligibility verification, thus helping to combat identity fraud.
In a press release issued on November 18, 2013, U.S. Citizenship and Immigration Services (USCIS) announced that the new safeguard enables USCIS to lock a Social Security number that appears to be misused by an individual, protecting it from further potential misuse in E-Verify. If an employee attempts to use a locked Social Security number, E-Verify will generate a “Tentative Nonconfirmation” (TNC). The employee receiving the TNC will have the opportunity to contest the finding at a local Social Security Administration (SSA) field office.
If the employee contests the TNC and the SSA field office confirms the employee’s identity correctly matches the SSN, the TNC result will automatically be updated to an “Employment Authorized” status in E-Verify. USCIS encourages employees who successfully confirm their identities to call in order to find out about available resources on identity theft and fraud prevention.
E-Verify is offered by the Department of Homeland Security and allows employers to quickly verify the employment eligibility of new employees.