Colorado Employers are Now Limited in Using Consumer Credit Information for Employment Purposes

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A new law was passed in Colorado entitled the “Employment Opportunity Act”, Colo. Rev. St 8-2-126, which will drastically limit consumer credit information from being used for employment purposes. The law, which was signed on April 19, 2013, and which will go in effect on July 01, 2013, will be the ninth state law to significantly limit how employers may use consumer credit information to make employment decisions.

The law defines “employment purposes” to encompass evaluation of a person for “employment, hiring, promotion, demotion, reassignment, adjustment in compensation level, or retention.” Effective July 01, 2013, Colorado employers may only use consumer credit information for employment purposes if:

• “The employer is a bank or financial institution;
• The report is required by law; or
• The report is substantially related to the employee’s current or potential job and the employer has a bona fide purpose for requesting or using information in the credit report that is substantially related to the employee’s current or potential job and is disclosed in writing to the employee.”

According to the new law, if an employer takes adverse action against an employee in part or in whole because of employee credit information, the employer must disclose, in writing or in the same medium in which the application was made, the reason for the adverse action, as well as the particular information the employer used in making the adverse decision against the employee. Adverse action, as defined by this law, may include “demotion, reassignment to a lower-ranked position or to a position with a lower level of compensation, decrease in compensation level, denial of promotion, termination of employment, or any other decision for employment purposes that adversely affects an employee or applicant.”

Individuals who feel they are injured by violations of this law may file complaints with the Colorado Division of Labor. Investigation outcomes will be issued within 30 days of the complaint, and there is a maximum of $2,500 in civil penalties that can be awarded to complainants for injuries deemed to be caused from violations under this law.

Colorado employers may wish to re-evaluate all of their uses of consumer credit information in relation to employment purposes, in order to help ensure compliance with this law by July 01, 2013.   Additionally, eight other states have also enacted laws for responsible credit report use for employment purposes.  As of the publication date of this article, California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont, and Washington either prohibit or restrict employers from using such information at a certain time within the hiring process or restrict the use of credit reports based on position or industry.  Employers should refer to their corporate legal counsel and active legislation within their state for proper use. 

All information contained herein is provided by Employment Background Investigations solely for the convenience of its readers. EBI is not providing legal advice or counsel and nothing provided within should be deemed as legal guidance or advice.  Readers should consult with their own legal counsel to determine their legal responsibilities or if they have questions on any information provided by EBI.

Employment Background Investigations, Inc. (EBI) is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international mandatory requirements. If you found this information useful, select the button listed below and access more industry news, resources and tips from EBI, an NAPBS Accredited screening firm and global leader in the background screening industry.

EBI Commits to Advancing Global Standards in International Background Screening for Expertise and Efficiencies

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Employment Background Investigations, Inc. (EBI) announces its commitment to advance efforts for the expansion of standardized international background screening practices through its leadership on the NAPBS International Committee.

Robert Capwell, Chief Knowledge Officer of EBI, serves as Co-Chair of the NAPBS International Committee.  This committee was created to form a global alliance of professional background screening firms that focuses on professionalism, ethical behavior, operating within legal guidelines, and sharing a common set of values and goals.  Due to EBI’s commitment and Mr. Capwell’s leadership, along with others, NAPBS has established chapters and regional leadership throughout APAC, Canada, and Europe.  The NAPBS International Committee is also developing a questionnaire to assist HR professionals in assessing providers to perform international background checks.

International background screening brings forth a unique set of issues and challenges that are very different from standard practices in the United States. It is important that these differences are clearly understood before an international screening program is designed and implemented for companies screening outside of the US.  A recent article in HR Magazine published by The Society for Human Resources Management (SHRM) states that global screening requires more effort and more patience than domestic screening.

International screening is significantly more expensive and complex than U.S. background screening based on the following:

• Intricacy involved with developing domain knowledge and the infrastructure required to deliver these services in over 200 countries and territories worldwide;

• Necessity to have access to people with the ability to speak a wide variety of languages;

• Necessity to operate around the clock to accommodate time differences;

• Expertise required to provide the appropriate level of accuracy and quality while complying with the country-specific laws and restrictions;

• Necessity to address multiple currency exchanges and legitimate fees associated with accessing public information abroad;

• Significant difference in the amount of detailed, country-specific and product-specific information required from a prospective employee to complete the background check

EBI specializes in the development and implementation of international and global screening programs on behalf of its clients.  To ensure the highest quality screening information is provided across the globe, EBI has invested significant resources in establishing a network of knowledgeable international partners that are located in each country, and are well trained and competent in their investigative abilities.  EBI has established a data privacy policy which complies with the seven Safe Harbor principles administered by the United States Department of Commerce, in accordance with the European Commission’s Directive on Data Protection that went into effect in 1998. The Safe Harbor framework was created to bridge the different global geographical approaches to privacy and to ensure the uninterrupted and streamlined transfer of data between Europe and the United States. EBI strictly adheres to the standards established by the Safe Harbor policy and applies stringent privacy protocols through its networks enabling optimized global data security.

EBI's Just-One Global Screening Platform enables international due diligence with a full range of legally compliant services around the world including criminal record checks, employment and education verifications, motor vehicle records, credit history reports, ID verifications, and drug testing solutions. “International and global background screening is complex and process consuming.  EBI is forging ahead in incorporating the most current country specific screening protocols, data collection requirements, on-demand forms, document management, mouse signatures and paperless processing, for efficient and effective optimization of business processes.  We are committed to the standardization of industry requirements and implementation of global best practices across our platforms,” stated Richard Kurland, President and CEO of EBI.

About Employment Background Investigations, Inc. (EBI):
EBI is a technology driven innovator and leader in providing domestic and global background employment screening, drug testing, and occupational healthcare and I-9 compliance solutions.  With emphasis on business process optimization, EBI services over 5,000 clients in over 200 countries and territories worldwide and specializes in the development, implementation and management of comprehensive and customized employment screening programs for large and multi-national clients.  EBI is among the two percent of background screening firms accredited by the NAPBS Background Screening Credentialing Council (BSCC).  EBI is also a founding member and an active participant within the National Association of Professional Background Screeners (NAPBS).

Legislative Alert - E-Verify and New Form I-9 Updates

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A notification from USCIS went out to subscribers yesterday, stating that in the USCIS’s initial release of the latest “E-Verify Connection”, March 2013 Issue XII, USCIS incorrectly stated the new Form I-9’s revision date and expiration date. Employers should note that the correct revision date for the new Form I-9, as issued by USCIS, is (03/08/2013 N) and the expiration date is 03/31/2016.

The U.S. Citizenship and Immigration Services (USCIS) has also issued a new “Handbook for Employers, Guidance for Completing the Form I-9 (M-274)”. This reference manual now contains updated information to reflect the new Form I-9 (Rev. 03/08/2013 N). The other modification is that the name of the handbook has changed slightly from “instructions” to “guidance”.

The deadline, as set forth by the USCIS, for use of the new Form I-9 by all employers, is May 07, 2013. The new Form I-9 contains a new format that is now two pages long, as well as additional fields in “Section 1” for an employee’s e-mail address and phone number. Employers have the ability to review and familiarize themselves with the new Form I-9 ahead of the May 07, 2013 deadline. After May 07, 2013, all employers must use the new Form I-9 or they risk potential fines and penalties from U.S. Immigration and Customs Enforcement (ICE).

Many accredited background screening companies offer electronic I-9 services that stay abreast of USCIS Form I-9 updates so that employers and Human Resources representatives don’t have to worry about updating paper documentation to distribute to new hires. Businesses that want to reduce paperwork and the costly labor expenses of keeping up-to-date with USCIS updates may want to consider inquiring about electronic I-9 services.

EBI is committed to providing employers with valuable education, news and resources around background screening, drug testing, occupational healthcare and employment eligibility. All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice. Always consult your legal counsel for specific advice on local laws and industry regulations.

EBI offers electronic Form I-9 and E-Verify solutions to employers. Start the I-9 process right with every new hire. EBI's Electronic Form I-9 Solution lets you complete, sign and store all the documents electronically, complete with error-checking and guidance. The system will also guide you through the requirements of collecting proper and compliant documentation to prove worker eligibility. Contact EBI to learn more about our employment eligibility solutions.

Background Screening May Help Prevent Workplace Violence

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Workplace homicides have increased by 50% in 2012, according to Dr. Larry Barton, Ph.D., an expert in threat management and a faculty member at the FBI Academy (Bailey, 2013). Barton calculates that on average, two people are murdered at work each workday in the United States (Bailey, 2013). According to a Bureau of Justice Statistics report, current and former work associates accounted for 21% of workplace homicide offenders between 2005 and 2009 (Harrell, 2011). Between 2005 and 2009, individuals employed in sales and office jobs accounted for a staggering 33% of workplace homicides, ranking higher than law enforcement workplace homicides at 17% (Harrell, 2011).

Comprehensive Background Checks on prospective employees may present employers with a chance to prevent individuals who have a propensity toward violence from endangering businesses’ employees, brand reputation, and clients.

The Federal Bureau of Investigation (FBI), in a recent Law Enforcement Bulletin, wrote:

• Prospective employers, when assessing a job applicant, need to consider that a comprehensive background check can be crucial in identifying past “behaviors of concern” and/or a pattern of criminal activity.
• “…it is critical to understand that workplace violence does not happen at random or ‘out of the blue’. Rather, perpetrators usually display some behaviors of concern.” (Romano, Levi-Minzi, Rugala, and Van Hasselt, 2011)

Professional references are just one critical tool for providing employers with insight into an applicant’s character and professional behavior.

The aforementioned FBI Bulletin cites that tardiness, absenteeism, decreased productivity, struggling co-worker relationships, and decreased work performance, can all be indicators of increased workplace violence potential (Romano, Levi-Minzi, Rugala, and Van Hasselt, 2011). Workplace violence extends beyond physical assaults and homicide – it also includes, but isn’t limited to, threatening behavior, intimidation, and bullying. The only information an employer obtains from a job applicant on a resume and job application is information the applicant is providing, and is therefore highly subjective.

Professional References are necessary to find out if a prospective employee has displayed concerning behaviors of tardiness, absences, bullying, and/or poor workplace relationships during previous periods of employment. Employers may want to obtain at least three professional references, in order to help provide more objective and accurate information, as well as to prevent scenarios in which a prospective employee may provide a fraudulent reference contact.

Extended Employment Verifications are also a vital tool employers can utilize in their background screening policy to make informed hiring decisions – decisions that could prevent a potential workplace violence offender from getting hired. Extended employment verifications involve obtaining questions specific to work performance and character from an applicant’s previous supervisor(s). Accredited background screening companies usually can accommodate a business’s request for business-specific and/or customized extended questions, and can likewise also usually provide a standardized set of extended questions as a suggestion to employers. Professional background screening companies can also consult with businesses to accommodate employers regarding the length of employment history they want checked on prospective applicants, the number of previous jobs they want verified, and/or the set points of contact to whom employers want the questions asked (for example, only applicants’ supervisors).

Naturally, a background screening program that contains professional references and extended employment verifications, as well as a thorough Criminal History Check, is a suggested best practice for employers to get the most insight into a prospective employee, as well as vital insight into what the FBI has termed “behaviors of concern”.  These searches should be used to supplement a comprehensive criminal background history check, as well as other business-pertinent verifications.

Employers may want to assess if their current background screening programs are being used to their maximum capacity to assist employers in preventing applicants who present workplace violence risk from entering the employer’s workplace.

As the statistics show, even professions that are misguidedly considered safe (ex. an office occupation) are not immune from workplace violence. Employers may wish to consult with their background screening firms about which additional tools, including but not limited to extended employment verifications and professional references, are available to further reduce the risk of violence in the workplace.

In 2011, The Society of Human Resource Management (SHRM) and ASIS International published the "Workplace Violence Prevention and Intervention Standard" in collaboration with the American National Standards Institute, Inc. This Standard provides an overview of protocols, procedures and policies that any organization can adopt to help identify and prevent threatening behavior and violence affecting the workplace; and outlines how to better address and resolve threats and violence that have already occurred. EBI’s Chief Knowledge Officer, Robert Capwell, was one of the contributing authors of this Standard. 

Employment Background Investigations, Inc. (EBI) is a single-source, premier provider of background screening, drug testing and occupational healthcare solutions. EBI specializes in the development and implementation of employment, contractor and volunteer screening programs. EBI offers a wide array of global and domestic screening initiatives that can be specifically tailored to securely meet each client’s screening objectives.  Through our investigative solutions, we provide due diligence and risk mitigation tools to help minimize negligent hiring, workplace violence and other risk factors associated with the hiring process.  Thousands of companies with national and international presence, including many Fortune recognized companies, trust EBI’s services to make better, safer and more cost-effective hiring decisions. 

EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international legal requirements.  All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice.  Always consult your legal counsel for specific advice on local laws and industry regulations. 

For more information on EBI Solutions or to request a demonstration of our products and services, select the button below.

Legislative Alert - USCIS Issues New Form I-9

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The United States Citizenship and Immigration Services released a new Form I-9 on March 08, 2013. Employers who require additional implementation time for use of the new Form I-9 may use the old Form I-9 until May 07, 2013. However, after May 07, 2013, all employers must use the new Form I-9, which is marked with the revision date of (Rev. 03/08/13)N in the lower right-hand portion of the form. 

The Federal Register (Vol. 78, No. 46 specifically acknowledged that electronic I-9 providers may require additional time to implement the new Form I-9 revisions, and so the 60 day grace period until May 07, 2013, applies to both employers and electronic I-9 providers. After May 07, 2013, electronic I-9 providers, along with all employers, must use the new Form I-9 (Rev. 03/08/2013)N to remain compliant with federal law.

Employers should note that it is not required for employees who already have a current, valid Form I-9 on file to complete a new Form I-9 using the revised form. However, if re-verification of a current employee’s I-9 information is required, then employers should use the new, revised Form I-9 (Rev. 03/08/2013)N.

The new Form I-9 consists of two pages (not including the instructions and list of Acceptable Documents), as well as a more-detailed set of instructions. The new form also contains field for a passport, e-mail address, and phone number in Section 1. Employers can obtain the new Form I-9 by visiting the USCIS website at www.uscis.gov.

Employers using EBI’s electronic Form I-9 platform should be aware that EBI’s system is currently being updated to reflect the new revisions issued by USCIS, and that all updates will be completed by the May 07, 2013 compliance deadline.

Link to the Federal Register Notice.

EBI is committed to providing employers with valuable education, news and resources around background screening, drug testing, occupational healthcare and employment eligibility. All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice. Always consult your legal counsel for specific advice on local laws and industry regulations.

Contact EBI to learn more about our employment eligibility solutions. EBI offers electronic Form I-9 and E-Verify solutions to employers. EBI is a proud supporter and an approved designated Employer Agent through the Department of Homeland Security.

“Good Enough” is Not Good Enough for Background Screening Programs

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Hire the Best Candidates and Mitigate Risk for Your Company

In pre-employment background screening, companies may misconstrue a minimal background screening policy as “good enough”.  Human Resources professionals and business owners should question if they want to hire employees who are good enough or if they want to hire employees who are the best.

Negligent hiring, employee theft, and employee retention are ever-present concerns for employers. Thorough, comprehensive backgrounds checks may mitigate the risks of bad hires, negligent hiring lawsuits, and unreliable employees. If an employer skimps on its background screening policy, the company may be subject to risk from under-informed hiring decisions including:

• costly litigation and  claim settlements
• potential security risks
• significant loss of production and profits
• higher costs of recruiting and training
• possible damage to a company’s brand and public image

Employment Background Screening Enhancements Lead to Intelligent Hiring Decisions 

• Standard Employment Verification vs. Extended Employment Verification

Standard employment verification confirms an applicant’s previous job title, place of employment, and the dates he/she worked.  This does not provide any insight into what a supervisor thought of the employee’s work performance.   And this does not provide information regarding the applicant’s job attitude, teamwork capability, and/or his job attendance. Upgrading from standard employment verification to extended employment verification, complete with supervisor extended questions that delve into an applicant’s work performance, is an easy way to reduce bad hires. While an applicant may be telling the truth about when and where he worked, he may not be disclosing that he is often sick on Mondays, or exhibits poor manners when interacting with customers.

• Using a SSN Trace to Capture Areas of Residence to Search for Criminal Records

Applicants may not include all areas in which they have lived on their employment applications, especially if they are hiding past criminal activity or negative information that could be uncovered on a comprehensive background check. Also, not all job applications ask for an applicant’s entire address history.

A thorough background screening program will include a SSN Trace Report to capture additional areas where an applicant has lived. This is critical information that a background screening company can use to search for criminal record hits in all areas of residence that were found on the applicant’s SSN Trace.  For example, an applicant may list that he has lived in Baltimore County, Maryland his entire life, but that may not be true.  If only that single county in Maryland is searched for criminal records on the applicant, the employer runs the high-stakes risk that its applicant’s felony conviction in New Jersey, for example, will go undiscovered.

This minimalist background screening policy of only having a single county and/or single state of residence searched for an applicant may be difficult to defend in a negligent hiring lawsuit as opposed to utilizing more comprehensive technology in running criminal record searches based on SSN Trace Report results.  Ensuring the safety of employees and consumers is invaluable - making a thorough criminal history check more preferable, safer, and more defensible, than a whimsical policy of “pick and choose”.

• Searching Aliases as Opposed to Just One Name

Searching alias names is an often-overlooked component of a comprehensive background screening program. It is often presumed that if an individual has a criminal record history, a university degree, and/or a professional license, that these can all be searched and verified using a single name. A thorough Criminal Background Check should always be conducted using any additional/alias names uncovered from the SSN Trace to mitigate adverse action, which may include:

• If an applicant provides multiple names, and/or aliases on a job application, and an employer’s background screening program only searches for one name, the hiring company may be missing out on valuable information.
• If an applicant has a sexual assault conviction under an alias, and this conviction went undiscovered during the pre-employment background check because an employer had only decided to order criminal searches on the applicant’s current name, the company has potentially opened itself, its other employees, and its consumers to immeasurable vulnerabilities.
• Furthermore, even if the defendant (the employer) in a negligent hiring case based on not running aliases were able to “win” the case, there would still be immense damage inflicted upon the employer’s reputation, and therefore upon its business as well.

• The Importance of a National Record Database Search

Even if a company is already running criminal record searches on applicants utilizing a SSN Trace, as well as running searches on applicant aliases, there is still room for improvement and enhanced due diligence.

A National Criminal Record Database Search (NCRD) is a solid (and necessary) complement to background screening programs. The National Criminal Record Database Search is a nationwide search that will locate criminal record hits across the United States, regardless of where the applicant has lived. For example, if an applicant has lived all of his life in Illinois, and his SSN Trace Report only shows Illinois counties of residence, then the theft conviction he had in Indiana while on vacation may go undiscovered because only areas of residence were searched based on the SSN Trace Report. The National Criminal Record Database Search should be viewed as a supplementary search, and should not be the only tool an employer uses to search criminal records; however, it should instead be used to fill in the gaps for a complete criminal records search.  A comprehensive criminal background check should include a search in all areas where a candidate has lived, worked, or even attended school along with a NCRD to complete the search. 

Employment Background Investigations, Inc. (EBI) is a single-source, premier provider of background screening, drug testing and occupational healthcare solutions. EBI specializes in the development and implementation of employment, contractor and volunteer screening programs. EBI offers a wide array of global and domestic screening initiatives that can be specifically tailored to securely meet each client’s screening objectives.  Through our investigative solutions, we provide due diligence and risk mitigation tools to help minimize negligent hiring, workplace violence and other risk factors associated with the hiring process.  Thousands of companies with national and international presence, including many Fortune recognized companies, trust EBI’s services to make better, safer and more cost-effective hiring decisions. 

EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international legal requirements.  All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice.  Always consult your legal counsel for specific advice on local laws and industry regulations. 

For more information on EBI Solutions or to request a demonstration of our products and services, select the button below.

ICE is Issuing Steep Penalties - Are You Using an Electronic Form I-9 Solution?

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The United States Immigration and Customs Enforcement (ICE) recently penalized a clothing manufacturer based in New Jersey with a $625,000 fine for Form I-9 violations. Employers should take note that I-9 compliance audits are not out-of-the-ordinary for ICE, and that the penalties can be (and often are) quite steep. The United States Citizenship and Immigration Services (USCIS) has posted that penalties for Form I-9 violations can range from $110 to $1,100 per form. Furthermore, if a company is found to be hiring or continuing to employ a person that is not authorized to work in the United States, the penalties jump to a range of $375 to $16,000 per unauthorized worker.

Taking note that ICE audits are on the rise, and with employers suffering the consequences of large civil penalties, many employers are now choosing to take advantage of electronic I-9 platforms. United States Law 1986. 8 C.F.R. § 274a.2 mandates that employers are required to process and retain original Form I-9s for all current employees. Additionally, employers are required to retain Form I-9s for all former employees for a period of at least three years from the date of hire, or for a period of one year after the employee is no longer employed, whichever is longer.

Processing and storing paper Form I-9s may present many risks, challenges, and unnecessary labor expenditures to employers who want to be best-prepared to face an ICE audit. A good electronic I-9 system will prompt employers to complete all fields required on the Form I-9. A paper Form I-9 has no such prompts, and the employer is left having to utilize his own knowledge to complete the form. There is a huge perk of uniformity with a good electronic I-9 platform that is hard to match with a paper I-9 system. It may be difficult for employers who use paper Form I-9s to keep track of all of the documentation, and to know with a sense of certainty that all of their paper Form I-9s are in once place, and that there aren’t a dozen sitting in someone’s desk drawer the office down the hall, or that the HR rep who retired last week didn’t accidentally take one or two home with him. A solid electronic I-9 system keeps all Form I-9s in a single location, and allows customizable user access so that an employer can turn off/on and/or limit an employee’s access to the electronic Form I-9s as business needs necessitate.

It is also much easier for employers to search Form I-9s using an electronic storage system than it is for employers to search a paper Form I-9 archive. Employers who are told by the ICE to produce certain Form I-9s within 72 hours in the event of an audit would face a much less momentous task searching by name in an electronic interface than they would if they had to dig through hundreds and/or thousands of paper Form I-9s looking for the ones ICE has requested. Organizationally, electronic I-9 systems also have the upper hand. If business locations move, or if internal organizational changes have been made, it is much easier for a company to simply rearrange electronic user access with a few clicks of the mouse, than to have to physically move paper Form I-9s from one building to another, or even from one state to another. Another advantage electronic I-9s is that a reputable electronic I-9 system will alert employers when document expiration dates are approaching, and when re-verifications are necessary. There is also a reduced risk in document fraud, as well-rounded electronic I-9 systems will alert employers when a duplicate SSN has been entered. Overall, electronic I-9 systems present efficiency and compliance solutions that paper form I-9s, by their very physical limitations, simply cannot provide.

Whereas the aforementioned federal law exists regarding Form I-9s, there are also many state-specific laws that require the use of E-Verify to confirm an employee’s work eligibility within the United States.  Employment Background Investigations, Inc. offers an E-Verify State Legislation Map with an overview of state-specific E-Verify laws that may be of assistance to employers who are considering the use of E-Verify.  Employers seeking a comprehensive solution to their I-9 and E-Verify needs may consider choosing an electronic I-9 platform that seamlessly combines the electronic I-9 process with E-Verify case processing and management.

Employment Background Investigations, Inc. is committed to providing employers with valuable education, news and resources around background screening, drug testing, occupational healthcare and employment eligibility.  All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice.  Always consult your legal counsel for specific advice on local laws and industry regulations.

Contact EBI to learn more about our employment eligibility solutions. EBI offers electronic Form I-9 and E-Verify solutions to employers.  EBI is a proud supporter and an approved designated Employer Agent through the Department of Homeland Security.

Ban the Box Legislation Points to a Greater Need for Background Screening

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Many who have filled out a job application have encountered “the box” -- it’s a little square, usually located toward the end of an employment application, next to a question that asks, “Have you ever been convicted of a criminal offense?”

A spreading “ban the box” legislative push across the nation posits that asking an applicant if he/she has had a criminal history in the initial stages of hiring causes unfair discrimination toward those with previous criminal convictions. Proponents of “ban the box” legislation argue that a standard employment policy of asking if an applicant has committed a crime, in the initial stages of the application process, indirectly contributes to recidivism, and potentially causes disparate impact on protected classes under Title VII of the Civil Rights Act of 1964. Supporters contend that “ban the box” legislation will directly contribute to more equal hiring practices and, in turn, potentially lead to better communities.

The movement to enact “ban the box” legislation is growing along with federal pressure from the U.S. Equal Employment Opportunity Commission’s (EEOC) enforcement guidance report entitled, “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964”. The EEOC recommends in the aforementioned guidance report that companies proceed with caution when evaluating an applicant’s hire eligibility based on criminal record history. When assessing the criminal records history of an applicant’s background report, employers are advised by the EEOC to consider the job for which the applicant has applied, the amount of time that has since elapsed from the date of the criminal offense(s), as well as the nature, gravity, and scope of the criminal offense(s).            

Additionally, many counties and cities have also enacted “ban the box” legislation, or similar legislation that restricts and/or limits what employers can and cannot include on an initial employment application. The National Employment Law Project has a resource guide, updated as of November, 2012, that highlights county and city legislation.

Employers Still at Risk for Negligent Hiring Claims
Pre-employment background screening plays a more important role than ever in the hiring process now that “ban the box” legislation is sweeping the United States. It is important for employers to note that active “ban the box” legislation does not exempt employers from claims of negligent hiring -- it is certainly not a green light to remove background screening from the hiring process. Conversely, employers now have to be even more thorough in their pre-employment background screening programs because there will not be a possibility to know of an applicant’s criminal history until after the initial stages of the hiring process. Although an employer may not be able to ask an applicant up-front about his/her criminal history in the state in which the employer is hiring, that does not mean that a criminal background check should not be performed.

Background Checks more Important than Ever
Employers are given, now more than ever, the role of assessing each job position in individual terms, and of creating an individualized assessment policy that incorporates and determines which background investigation searches will need to be ordered and reviewed for each job position for which the employer recruits. It may be advisable for employers who want to maintain compliance with their jurisdiction’s “ban the box” legislation, and for employers who desire to take the lead from the EEOC’s guidance report,  to consult with accredited background screening companies to develop customized background screening packages which meet employers’ business needs for each job position.

Employment Background Investigations (EBI) works with employers globally to provide a full range of comprehensive and legally compliant criminal background check solutions.  Our "Just One Solution" suite of background screening, drug testing, occupational healthcare, and electronic form I-9 services will help reduce the risks and liabilities of a bad hire!  EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local, and international mandatory requirements.  EBI is not providing legal advice or counsel and nothing provided in this document should be deemed as legal guidance or advice.  Readers should consult with their own legal counsel to determine their responsibilities or if they have questions on any information provided by EBI.

Use of Credit Reports not Proven to be Discriminatory in Case Filed by the EEOC

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Kaplan’s recent victory in obtaining summary judgment against the EEOC in Equal Opportunity Employment Commission Vs. Kaplan Higher Learning Edu. Corp., et al should serve as  a reminder to businesses that employment background screening, a standard pre-employment practice, can no longer be approached with umbrella-like, “one-size-fits-all” adjudication metrics.

Although the EEOC lost in this case, it is important to note that the EEOC lost on a matter of technicality regarding admissible expert testimony.  If the EEOC had been able to statistically present a disparately-affected protected class in an admissible manner, the outcome for Kaplan might have been much less favorable. Arguably, employers can avoid being brought to court in the first place if they utilize a holistic, EEOC-recommended approach to assessing background screening reports: the individualized assessment. The EEOC advises against hiring practices that do not take into consideration the entirety of an applicant’s background report, as well as the job-specific relevance of an applicant’s background report.

The Equal Employment Opportunity Commission (EEOC) brought a lawsuit against Kaplan in 2010, alleging that Kaplan’s use of credit reports in its hiring process had a disparate impact on African American applicants.

A disparate impact can be especially challenging for employers to defend, as the plaintiff in a “disparate impact” case does not have to prove a discriminatory motive; in many cases only discriminatory consequences must be established. An employment policy that is facially neutral, but in its effect or application, has an adverse impact on populations that are protected under Title VII of the Civil Rights Act of 1964, is termed legally as causing a “disparate impact”.

Legal precedent has provided that in order to establish a disparate impact claim, a plaintiff must:

“(1) identify a specific employment practice that is being challenged”

                        and

“(2) establish, through statistical means, that the identified employment practice,  'caused   the exclusion of applicants... because of their membership in a protected group’”

(Equal Opportunity Employment Commission Vs. Kaplan Higher Learning Edu.  Corp.,et al.)

The Court ruled that the EEOC failed to establish, “through statistical means” that Kaplan’s hiring practice created a disparate impact on the African American population. The EEOC used a practice of “race rating” in its efforts to establish the disparate impact statistics. The method of “race rating” involved Dr. Kevin R. Murphy assembling a team of five designated “race raters” who individually determined the race of individuals in 891 DMV photos. The Court ruled that the “race rating” technique employed by EEOC expert Kevin R. Murphy did not fulfill any of the admissible testimony requirements, as set forth in the case, Daubert v. Merrell Dow Pharmaceuticals. The requirements from Daubert, while not comprehensive, require that an expert’s theory can be tested, that the theory has a known error rate, and that the theory has been generally accepted by the scientific community. The judgment of the Court held that assembling teams to guess individuals’ races from DMV photographs was not scientifically established and was not a court-admissible method for determining disparate impact on a protected class.

Although the case against Kaplan was a loss for the EEOC, employers should feel encouraged to reassess their assessment protocols with credit reports. An umbrella hiring assessment policy for all job applicants could potentially leave an employer open to a “disparate impact” lawsuit. Evaluation of all information in the applicant’s background screening report, including but not limited to the credit history, should be assessed individually. Such hiring evaluations should remain consistent, job-specific, and a matter of business necessity.

Employment Background Investigations (EBI), professionally-accredited employment screening company, works with employers globally to provide a full range of comprehensive and legally compliant employment background check, drug testing, occupational healthcare and electronic form I-9 solutions.  EBI provides employers with the options they need to perform an individualized hiring assessment that will help reduce the risks and liabilities of a bad hire! Our "Just One Solution" suite of services  EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local, and international mandatory requirements.  EBI is not providing legal advice or counsel and nothing provided in this document should be deemed as legal guidance or advice.  Readers should consult with their own legal counsel to determine their responsibilities or if they have questions on any information provided by EBI.

Make a Commitment to Background Screening Compliance and Efficiency in 2013

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In retrospect, 2012 was a year of slow economic growth, tighter budgets, state law changes, revised EEOC guidelines, and the stark reminder of workplace and public violence.  These concerns and challenges are at the forefront for every HR and Security Professional responsible for talent management, workplace safety, and security.  A new year and perspective brings an opportunity for companies to reassess current policies.  Enhanced security, leveraged technology, return-on-investment, and compliance are always key factors that should be reassessed on an annual basis and are critical aspects of a comprehensive screening program. 

At EBI, we are committed to the highest level of security, integrity, accuracy, and compliance in the products and services we deliver to our clients.  Our industry experts work diligently to keep you informed of background screening, drug testing and occupational healthcare changes throughout the year.  Through our weekly blog posts, articles, and legislative alerts, many of our clients have found it easy to stay up-to-date as the information we provide is in real-time.   With the start of a new year, we would like to point out a few key areas that employers should revisit as a matter of best practice.

A Commitment to Completeness and Accuracy
Conducting a comprehensive and accurate background check should always be a matter of policy and best practice within any screening program.   Using only limited information from an online database does not sufficiently cover employers from the risks of negligent hiring or retention litigation.   A criminal records database search is an excellent tool that can be used to fill in the gaps; however, it should never replace a comprehensive court search of where a subject has lived, worked, or even went to school.  Fast and cheap won’t cut it when you are trying to achieve a high level of due diligence.

Employers should demand that their screening vendor provide current and accurate information when utilizing all data sources.  Section 607 of the Fair Credit Reporting Act (FCRA) requires that consumer reporting agencies follow reasonable procedures to assure maximum possible accuracy of the information provided within a consumer report.  In most cases, only the original reporting court of jurisdiction will have the most current and complete criminal record information.  In addition, subject identifiers are limited in many electronic databases as they have been removed due to concerns of identity theft, which leaves companies with incomplete information.  Without proper subject identifiers, your screening vendor cannot ensure that the information reported is actually for the right candidate, especially if it involves a common name.

Be Consistent with Your Screening Program
Having a documented, consistent, and well thought-out screening program will mitigate risk levels and the potential of discrimination as it relates to candidate evaluation.  You should never pick and chose screening components at random or based on a hunch.  Evaluate your screening program based on job function and be consistent, especially when dealing with similar positions.  Job functions that bring an elevated level of risk to fellow employees or even the public should undergo a more in-depth screening.  In addition, employees dealing directly with the elderly, mentally challenged, or children and/or those working intimately with others should be screened more intensely as well.

The location and/or the employee’s access to information should also play a key role in deciding your level of due diligence. Employees working in highly secured or safety sensitive areas and/or accessing confidential information, cash, or credit information provide a specific set of risks that a screening program should cover.  In addition, a candidate’s prior job performance, education, skill set, and experience should be properly vetted based on corporate need and job requirements.   Consistency is always a benchmark when minimizing risk and assessing candidates.

Reduce the Potential of Employment Discrimination
In April of 2012, the Equal Opportunity Employment Commission (EEOC) approved guidance on the “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”  Employers are urged to take a fresh look at their job applications and assessment protocols when dealing with arrest and conviction information in hiring decisions.  Employers need to understand that the EEOC’s guidance does not prohibit the use of such information as part of their pre-employment screening process; however, employers will need to take a much closer look at their procedures when inquiring about and assessing the use of arrest and conviction information as it relates to job-relatedness and business necessity.  A neutral or an across-the-board assessment policy for all candidates could leave you open to a potential discrimination lawsuit.  Evaluation of arrest and criminal conviction information should be consistent, job-related, and a matter of business necessity, as well as assessed individually to avoid potential discrimination.

In December of 2012, the EEOC released its Strategic Enforcement Plan for 2013.  The plan outlines several initiatives that are of importance to the EEOC.  Eliminating barriers in recruiting and hiring is a high-level initiative of the agency.  Their focus for this specific initiative includes facially neutral recruiting and hiring practices that adversely affect candidates based on race, ethnicity, religion, age, gender, and disability.  Recruiting, restrictive application processes, and tools such as pre-employment testing and background checks will continue to be a focus for the agency.

Employers need to be aware of the initiatives of the EEOC as they may have an effect on your current screening program.  EBI will keep you informed of any specific initiatives or agency updates as they progress throughout the year.

Revisit State Specific Compliance Mandates
State legislation, as it relates to the screening industry, is ever-changing, and HR professionals need to stay on top of legal changes for proper compliance.  Over the past year, states have changed specific notifications and policies on the use of criminal records, as well as made restrictions that limit or even prohibit the use of credit information for certain positions.  A sluggish economy and tighter state budgets have changed the focus of state lawmakers to look for ways to cut costs which have a profound effect on employers and pre-employment and post-hire screening solutions. In some cases, state legislation has set tighter controls on illegal immigration and the use of state mandated e-verify programs.  There has also been a focus on the reduction of inmates in state prisons along with ex-offenders re-integration into public and private sector jobs.  As a result, there has been an increase in the adoption of laws addressing the exclusion of inquires about prior criminal history on job applications.  Many of us know this as the “ban-the-box” initiative being adopted at the city, county, and state levels.  This trend can be a compliance nightmare.

If that is not enough, states passing medical marijuana laws continue to be on the rise, so revisiting your drug testing program certainly makes sense to ensure proper state compliance.  Employers must be vigilant in keeping up with ever-changing laws to stay compliant.  Taking a fresh look into these areas on a state basis is worth the legal legwork and appropriate throughout the entire year.

Build Efficiencies into Your Screening Program
The age of a paperless process for recruiting, talent management, screening, and on-boarding is here for employers to capitalize on and optimize business efficiencies.   Electronic job-boards, paperless applications, and secure candidate portals provide a seamless, confidential, and efficient way to gather and exchange sensitive candidate data.    The days of paper forms, chasing down an applicant for a required signature, or manually sending sensitive information to your screening provider is over as many tools and resources have been created to streamline these processes.  In addition, obtaining a candidate’s personal data outside of the application process can assist in providing legally required federal, state, or even international disclosures forms to be served up automatically to ensure you capture the right information up-front and stay compliant while information is exchanged in real-time and in a secure manner.

You should evaluate your entire application, screening, and on-boarding process to identify for further efficiencies, such as a consolidation of services to one vendor verse multiple vendors to reduce reconciliation time with invoices.  Working with an integrated screening provider that can meet all of your background screening, drug testing, and global screening needs can save you substantial time.     Efficiency is key during a time when we all must do a lot more with less staff and tighter budgets.

It’s Worth Taking a Fresh Look
Taking a fresh look at your overall screening program can help keep you out of court, reduce hidden risks, decrease costly turnover, and ultimately create a positive candidate and HR experience while providing significant ROI to your screening program and bottom-line.  Contact EBI today and let one of our industry experts share their knowledge and demonstrate how the use of SMART Technology can ultimately keep you compliant and build critical efficiencies into your screening program.

Employment Background Investigations (EBI) works with employers globally to provide a full range of comprehensive and legally compliant employment background check, drug testing, occupational healthcare, and electronic form I-9 solutions.  Our "Just One Solution" suite of services will help reduce the risks and liabilities of a bad hire!  EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local, and international mandatory requirements.  EBI is not providing legal advice or counsel and nothing provided in this document should be deemed as legal guidance or advice.  Readers should consult with their own legal counsel to determine their responsibilities or if they have questions on any information provided by EBI.