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Legislative Alerts June 19, 2014

 
Federal Custody Contrtol Form

New Federal Forms

The Office of Management and Budget (OMB) approved the 2014 Federal Custody Control Form (CCF) for all federal agency and federally regulated drug testing programs.

While the CCF can be used in either a paper or electronic (eCCF) form for HHS testing, it is important to note that the DOT has not yet approved the use of the Federal eCCF.

With regard to testing HHS regulated specimens, an HHS-certified test facility has certain steps that it must take before it can utilize the Federal eCCF.  They must submit a detailed plan and proposed standard operating procedures (SOP) to the NLCP for review.  Once approved, an onsite inspection will be conducted.  It is only after these tasks are completed that the Federal eCCF form may be used in lieu of the paper CCF.

The new form went into effect on May 31st of this year and expires in 2017.

Subcommittee Eyes EEOC

The House Subcommittee on Workforce Protections held a hearing this week to take a closer look at the EEOC’s guidance on the use of criminal background checks. Several witnesses told the committee that the EEOC is overstepping its bounds when it comes to restrictions on background checks.

Federal law does not keep employers from asking about criminal history, but it does put restrictions on how the information is used.

President and CEO of the National Small Business Association, Todd McCracken, testified before the panel.  His main message was that more small businesses are giving up background checks so they can avoid the bureaucratic headaches that come with the EEOC guidance.

McCracken says the extensive, footnote-laden document does little more than make running a business more difficult and more expensive.  He said employers don’t use background checks to exclude minority employees, as the EEOC alleges, but to provide a safe environment for their workers and their customers.

Camille Olson, an attorney appearing on behalf of the US Chamber of Commerce, testified that EEOC lawsuits have been “frivolous, unreasonable and without foundation.”  She says the EEOC’s guidance is flawed and has strayed from the agency’s core mission.

In May, EEOC Chair Jacqueline Berrien testified before the same subcommittee.  She was asked about the Senate Appropriations Committee’s directive to fix the confusion about the 2012 guidelines.  Berrien says they still have a month to produce those changes, and neither she, nor any other representative of the EEOC, appeared for this most recent hearing.

BAN THE BOX

Illinois is about to add private employers to its Ban the Box regulations.  The “Job Opportunities for Qualified Applicants Act” is on Governor Pat Quinn’s desk.  There is little doubt the Governor will sign it since he has already banned criminal background questions from most state job applications. He did that by executive order in October 2013.

Illinois will now be the fifth state to ban the box for private employers.

The new law will require employment agencies and private employers with more than 15 workers to evaluate an applicant based on their job skills and qualifications before asking about criminal history.  State representatives have been working to get this passed since 2007.

Employment Background Investigations is a technology driven leader in domestic and global pre-employment background checks, drug testing, occupational healthcare and I-9 compliance. We specialize in development, implementation and management of customized employment screening programs for large and multi-national clients. We are dedicated to information security.  EBI is the only background screening company firm to hold an ISO 27001-2005 certification for information security and to be accredited by the National Association of Professional Background Screeners (NAPBS).

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 state laws and industry regulations.

what employers need to know about the FBI criminal databaseOther Great Employer Resources

Download our free whitepaper "What Employers Need To Know about the FBI Criminal Records Database"

EEOC: Suing Less—But Still Pushing Too Far

 

EEOC: Suing Less—But Still Pushing too FarOver the last couple of years, the EEOC has made it harder for employers to discriminate against job applicants with criminal pasts.  With the promise of protection, more workers have come forward with complaints of discrimination… everything from age discrimination to issues regarding past criminal records. On the surface, that’s how the new regulations presented by the EEOC in 2012 were meant to work.

But then the Commission started filing lawsuit after lawsuit, forcing companies of all sizes to defend themselves.  Obviously, having the federal government knocking on your door is intimidating, but two years into these regulations, it seems the Commission’s lawsuits are often not only over-zealous, but down right sloppy.

Over the last year and a half, the EEOC has suffered several high-profile losses, and is being accused by attorneys in the private sector of conducting overreaching and open-ended investigations, instead of focusing on the individual charges of discrimination.  The numbers show the Commission is filing fewer suits, but there is still plenty of money flowing into and out of the EEOC.

Several judges across the country have found for the defendants in these cases. An Iowa judge ordered the EEOC to pay $4.7 million in attorneys’ fees and court costs to a CRST Van Expedited Inc. after a lawsuit accused the company of failing to protect hundreds of female employees from sexual harassment.

In the summer of 2013, a judge ripped an EEOC case to shreds, calling the work shoddy, and saying much of the statistical analysis seemed “fudged.” 

Read more about the case EEOC vs Freeman

In another case, an Atlanta magistrate judge refused to enforce a subpoena against a Georgia nursing company.  The company was accused of discriminating against home health aides who were black, disabled or had pre-existing genetic conditions.  The judge accused the EEOC of conducting an FBI-like raid on the company… even though the complaint they received was filed by a worker who, “is not disabled, is under the age of 40, has no pre-existing genetic conditions and is Caucasian.”

The general counsel for the EEOC points out that there have been some very big wins on the Commission’s side. For example, Hill Country Farms paid $1.6 million after a jury decided the company subjected 32 “intellectually disabled” workers to lower pay and abuse. And last year the EEOC won $675,000 for a RadioShack manager who was fired after filing an age discrimination complaint.

The bottom line seems to be that both sides have reason to complain.  The EEOC does find and fix discrimination problems, but employers do have a valid argument about over-zealous prosecution.

The one big take-away for employers is that the EEOC is not infallible. Too often, fear leads companies to automatically settle.  Remember to always talk to your attorney before making any snap decisions.

Employment Background Investigations is a technology driven leader in domestic and global pre-employment background checks, drug testing, occupational healthcare and I-9 compliance. We specialize in development, implementation and management of customized employment screening programs for large and multi-national clients. We are dedicated to information security. EBI is the only background screening firm to hold an ISO27001:2005 certification for information security and to be accredited by the Background Screening Credentialing Council (BSCC) created by the National Association of Professional Background Screeners (NAPBS).

Discover how EBI can help you build the perfect screening program to fit your needs.

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 state laws and industry regulations.

 

Legislative Alert! San Francisco Bans the Box

 

ban the boxAs of this week, San Francisco contractors, employers and affordable housing providers have strict limits as to how they can use information about an applicant’s criminal history.  This Ban the Box legislation is different than most we have seen because it includes people applying not just for jobs… but for public housing.

On February 17, Mayor Edwin Lee (D) signed the Fair Chance Ordinance. The ordinance allows city employers and affordable housing landlords to neither ask questions about criminal records, nor do a background check, before applicants prove they meet the initial qualifications to do the job or rent the housing unit.

After the first live interview, the ordinance allows a background check to be completed.  But, even then, a criminal record cannot automatically kick someone out of the running.  The ordinance says decision makers can only use conviction information if it bears direct relationship to the housing or job. The employer or housing provider must decide if the position or rental unit gives the candidate the opportunity to commit a similar offense.

The ordinance only applies to employers with 20 or more employees doing work within the city of San Francisco.  It excludes contracts where less than $5,000 is earned in a fiscal year.  Property rentals for less than 30 days are also exempt. Arrests that do not result in a conviction cannot be considered at all.

According to the ordinance, almost one in four adults in California has an arrest or a conviction record.  The authors of the ordinance point to the proliferation of companies offering criminal background checks as one of the reasons why it is so difficult for some to get a fresh start after committing a crime.

San Francisco is just the latest municipality to institute a ban the box law. More than 50 cities have similar laws on the books.  Ten states have adopted legislation, some of which apply the rules to private employers as well as government agencies and their contractors.  Check out this link to see if your city or state has a Ban the Box law on the books.

According to EBI Chief Knowledge Officer Robert Capwell, Ban the Box laws are becoming the norm, but since they differ from place to place, they can cause some complicated issues for employers that have a multi-state footprint.  Capwell says such companies will have to process individual applications based on the location.  They will have to remove any language referring to past criminal history from those applications being used in cities or states with Ban the Box legislation that specifically applies to them.

Regardless of whether your region has banned the box or not, the EEOC recommends employers always keep the three-factor test from Green v. Missouri Pacific Railroad Company in their minds as they evaluate criminal history.  The Green factors are:

  1. The nature or gravity of the offense
  2. The length of time since the conviction or completion of the sentence
  3. The nature of the job in question

Be sure to check back regularly for additional Ban the Box news.

Employment Background Investigations is a technology driven leader in domestic and global pre-employment background checks, drug testing, occupational healthcare and I-9 compliance. We specialize in development, implementation and management of customized employment screening programs for large and multi-national clients. We are dedicated to information security.  EBI is the only background screening firm to hold an ISO27001:2005 certification for information security and to be accredited by the Background Screening Credentialing Council (BSCC) created by the NAPBS.

Click here to find out how EBI can help you build the perfect screening program to fit your needs.

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 state laws and industry regulations.

what employers need to know about the FBI criminal databaseOther Great Employer Resources

Download our free whitepaper "What Employers Need To Know about the FBI Criminal Records Database"

American Idol Contestants… Employees or Competitors?

 

Why the EEOC Cares

EEOC american idol caseAmerican Idol debuted its 13th season a couple weeks ago. How time flies. It seems like just yesterday, an unknown Kelly Clarkson was battling to win this fledging reality competition. Who knew this little talent show would become such a pop-culture icon?

But as a new crop of singers stumble around with stars in their eyes, the company that produces the monster hit is being sued by the EEOC. The whole case hinges on whether these superstars-in-training are employees or competitors.

The legal issue is the EEOC’s new policy that makes it harder for employers to disqualify applicants because of past criminal history. Ten former contestants are suing the show, claiming producers kicked them off because they had arrest records.

The ten African-American men faced a variety of charges ranging from assault to drunk driving and even identity theft. None were ever convicted of the crimes, but they were summarily dismissed from the show, and several say they faced ridicule in the media.

It might be easy to jump in and say it was discrimination. After all, no white contestant has ever been kicked off because of an arrest. But this kind of thing only violates the EEOC directives IF these men were applying to be EMPLOYEES of the show.

So… employee or competitor??

American Idol has said over and over that these competitors are doing just that… competing. They say none of them were ever employees under Title VII.

The lawyer representing the men says everything hinges on Corey Clark. Clark was disqualified from season two of the show, with only nine contestants left. When Clark and dozens of others got that Golden Ticket to Hollywood, they signed an agreement that clearly stated they were “volunteers.”

But, once Clark made it into the top ten he was asked to sign an I-9 employee eligibility verification form and an employment deal memo that referred to him as “the employee” several times.

The attorney also says once a singer makes it into the top 12 they must join the television performer’s union, AFTRA, and they sign a contract that says they will be paid up to $1,251 for each appearance.

So, if Clark was an “employee,” or even just an applicant, American Idol would have been breaking California law by asking about previous arrests.

A judge will decide the employment question, but can Clark and the others win the battle of public opinion?

The singers’ attorney points out that 31-percent of all black, male semi-finalists on the show were disqualified for something other than their singing… but thirty-one other African Americans were allowed to compete, even though they too had criminal records. Add that to the fact that one- third of all American Idol winners have been black or bi-racial… and you have a very interesting court battle brewing.

EEOC directives don’t just affect big fish like American Idol. Being in violation can land your company in the middle of a lawsuit. How can you avoid this kind of situation? The key is having a solid screening and compliance program, and working with a company that will keep you on the right track.

If you are an employer, we urge you to consult your legal counsel to review policies and procedures regularly to avoid discrimination cases. EBI does not provide legal advice or counsel and nothing provided in this publication should be deemed as such.

Employment Background Investigations is a technology driven leader in domestic and global pre-employment background checks, drug testing, occupational healthcare and I-9 compliance. We specialize in development, implementation and management of customized employment screening programs for large and multi-national clients. We are dedicated to information security. EBI is the only background screening firm to hold an ISO27001:2005 certification for information security and to be accredited by the Background Screening Credentialing Council (BSCC) created by the National Association of Professional Background Screeners (NAPBS).

learn about the overwhelming benefits of working with an accredited screening provider

what employers need to know about the FBI criminal databaseOther Great Employer Resources

Download our free whitepaper "What Employers Need To Know about the FBI Criminal Records Database"

 

EEOC’s Lawsuit Dismissed against Alleged Discriminatory Background Check Practices

 

EEOC’s Lawsuit Dismissed against Alleged Discriminatory Background Check PracticesOn August 9, 2013, The United States District Court for the District of Maryland dismissed the EEOC’s Title VII lawsuit, without a trial, against a national conference and exhibit services company. The EEOC alleged that the Company implemented a hiring policy that, though facially neutral, had a discriminatory effect on African-American and male applicants.

The following is a summary of this case and key points considered by the Maryland District Court to issue its summary judgment in favor of the Defendant.  Although the EEOC failed to make its case due to flawed statistical data, the Court was very clear in its position that national statistics could not be used to support a disparate impact claim for a specific hiring practice.  The case shows that the EEOC must isolate and identify the step or steps in the hiring process that is the alleged cause of the disparate impact claims.  This case will most likely go through the appeals process; however, the outcome for employers that use employment background checks is a positive one.  Court’s position is that the EEOC cannot rely on their “bright-line” approach at using national statistics alone to prove disparate impact with the use of criminal and credit background checks.    

An Employer’s Right to Conduct Background Checks

The right to conduct criminal history checks or even credit history checks among other employment background screening components is viewed as a legitimate practice by the Court.  Employers continue to have a clear incentive to avoid hiring employees with the proven tendency to steal, commit fraud, appear untrustworthy, unreliable, or even have the potential to engage in workplace violence.  Based on this common practice used by many employers across the United States, the EEOC continues to challenge these practices as a violation of Title VII of the Civil Rights Act of 1964.  According to the EEOC, such screening practices and hiring policies may constitute an unlawful employment hiring practice if a company’s policies have a disparate impact on the basis of race, religion, sex, or national origin.  Employers are constantly challenged to demonstrate that conducting criminal background checks and/or credit history checks is job-related and consistent with business necessity.

The Company’s Goals and Policies Regarding Background Checks

The Defendant is a national provider of services for expositions, conventions, corporate meetings, and events.  The Company employs over 28,000 part and full-time employees and had experienced continued problems with embezzlement, theft, drug use, and workplace violence by its staff.  Like most employers, the Company created a background screening program with goals in mind to combat these issues and to avoid exposure to negligent hiring/retention lawsuits; increase the security of the Defendant’s assets and employees; reduce liability from inconsistent hiring or screening practices; proactively reduce the risk of employee-related loss; and mitigate the likelihood of an adverse incident occurring on company property that could jeopardize customer or employee confidence.

The Company also took a very prudent approach by creating a background screening program specifically tailored by employee type while utilizing screening components that made sense based on business necessity.  General employees that did not have credit sensitive jobs received a social security number trace along with a criminal background check.  For credit sensitive positions that included duties such as handling money, credit card information, budgetary authority, or accounting functions a credit history check was conducted.  Company executives, managers, and department heads received an education verification as well.  All levels of employment background checks were conducted on a post-hire basis as the last step in the hiring process.

The Company outsourced their employment background screening services to a consumer reporting agency/background screening firm and followed necessary FCRA protocols such as proper authorization and consent and followed adverse action procedures to protect the rights of consumers.    

The Company also required applicants to disclose their criminal conviction history in detail; however, provided a disclaimer on the application that states specifically that applications would not automatically be precluded from employment consideration with prior criminal history.  Each criminal record disclosure was also assessed on an individual basis and against business necessity before a final decision was made.

The Background Check Evaluation Process

The Company also followed a multi-step evaluation process to assess the screening results. The evaluation was first performed by considering the truthfulness about criminal history disclosures along with serious misrepresentation on the application would not be considered for employment.  Consideration was also given for the type of criminal history discovered along with the evaluation of outstanding arrest warrants.  Each was assessed on an individual basis and crimes that would generally disqualify an applicant including those involving violence, destruction of private property, sexual misconduct, felony drug convictions, or job-related misdemeanors.   These are all rational considerations for a company within the convention and meeting services industry.   

A Discrimination Complaint was Filed

In January of 2008, an applicant filed a discrimination complaint with the EEOC, asserting that the company violated Title VII by rejecting her for employment based on information regarding her credit history.  The EEOC then filed a complaint alleging that the employer violated Title VII of the Civil Rights Act of 1964.  In its complaint, the EEOC alleged since February of 2001, “the Defendant engaged in a “pattern or practice” of discrimination against African-American job applicants by using poor credit history as a hiring criterion (the “credit class”), and against African-American, Hispanic, and male job applicants by using criminal history as a hiring criterion (the “criminal class”). The EEOC asserted that these hiring criteria have a significant disparate impact on the identified suspect classes and are not job-related or consistent with business necessity.”

The EEOC’s Burden of Proof

For the EEOC to prevail on a claim of disparate impact, they must show that a certain class of applicants is disproportionately and adversely impacted by a particular employment practice on the basis of their race, color, religion, sex or national origin as stated in Title VII.  The EEOC ultimately bears the burden of proving discriminatory impact by showing statistical disparities between the number of protected class members in the qualified applicant group and those in the relevant segment of the work-force.  If shown, the burden then shifts to the employer to prove that the allegedly discriminatory policies or practices are job-related for the position in question and consistent with business necessity.

The EEOC attempted to make a sufficient statistical demonstration of disparate impact through two expert witnesses and their statistical reports.  By federal rule, expert statistics are unreliable if they are based on “incomplete data sets and inadequate statistical techniques” as stated in case.  The statistical evidence provided by the EEOC’s experts included several flaws.  The reports did not include a random sample of accurate data from the relevant applicant pool and time period. Experts only utilized a fraction of the applicant information provided to them and even included duplicate information; included only a few individuals cherry-picked for inclusion from the discovery material; and did not include data from half of the company’s branch offices.  As stated in the summary of the case, “the used database is so full of material flaws that any evidence of disparate impact derived from an analysis of its contents must necessarily be disregarded.” The second expert witness’s report added nothing significant to the first and replicated the analysis and confirmed the conclusion regarding disparate impact claim.

The Court’s Reliance on National Statistics to Prove Disparate Impact

Both reports included national statistics related to disparate impact which the EEOC attempted to justify as sufficient evidence to support their case, as the data used from the applicant analysis report was considered worthless.  The Court was very clear on their view that this national statistical data was still not a representation of the specific applicant pool under question.  The summary of the Court’s decision was clear.   To use general population statistics to create an inference of disparate impact, the general populace must be representative of the relevant applicant pool. (the “proper comparison is between the racial composition of the at-issue jobs and the racial composition of the qualified . . . population in the relevant labor market.”). Here, there is no indication that such is the case. The general population pool “cannot be used as a surrogate for the class of qualified job applicants, because it contains many persons who have not (and would not) be” applying for a job with the Defendant.  Moreover, the general statistics that the EEOC’s experts rely on relate to things that are not even considered under Defendant’s hiring criteria, such as arrest and incarceration rates.”    

Ultimately, the EEOC bears the burden to establish their case through usable and credible statistical evidence.  It is not the burden of the Defendant to conduct their own analysis; however, rebut the statistics provided by the EEOC.  Without the support of national statistics or reliable applicant data to support the EEOC’s case it could not survive. 

Conclusion

The important take-a-way from this case is that the EEOC must isolate and identify the step or steps in the hiring process which are the alleged cause of disparate impact.  General population statistics will not support the EEOC’s position on the use of criminal records and credit history data to prove that background checks alone create a disparate impact.

EBI, along with other industry experts will continue to weigh-in and keep you informed regarding developments regarding this topic.  We are committed to providing employers with valuable education and resources on changing legislation, cutting-edge, and compliant solutions to meet federal, state, local, and international mandatory legal guidelines.  EBI is not providing legal advice or counsel and nothing provided in this publication 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.

Employers are urged to consult with their employment legal counsel to review policies and procedures on an on-going basis to avoid discrimination claims along with keeping their background screening program current and compliant.

About EBI

EBI is a technology driven innovator and leader in providing domestic and global employment background checks, drug testing, occupational healthcare, and I-9 compliance solutions for employers.  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 a founding member and active participant within the National Association of Professional Background Screeners (NAPBS).  EBI is the only background screening firm to hold an ISO27001:2005 certification for information security and to be accredited by the Background Screening Credentialing Council (BSCC) created by the NAPBS.

Attorney Generals from Nine States Oppose the EEOC’s Overreaching Guidance on Use of Criminal Background Checks

 

EEOCThe Attorney Generals of Alabama, Colorado, Georgia, Kansas, Montana, Nebraska, South Carolina, Utah, and West Virginia are speaking out against the EEOC’s overreaching guidance issued in April of 2012 on the use of arrest and conviction records used by employers within the hiring process.  In a communication dated July 24, 2013, the Attorney Generals expressed their concerns regarding the substantive position the agency is taking against a well known discount national retailer and global automotive manufacturer filed in June of 2013. The EEOC has filed suit against both employers alleging their use of bright-line criminal background checks in the hiring process which violates Title VII of the 1964 Civil Rights Act. 

The Attorney Generals collectively state, “we believe that these lawsuits and your application of the law, as articulated through your enforcement guidance, are misguided and a quintessential example of gross federal overreach.  Our states urge you to consider your position and these law suits.”  They further wrote, “We are troubled that the EEOC’s real true purpose may not be the correct enforcement of the law, but rather the illegitimate expansion of Title VII to former criminals.”  Both law suits are still in the early stages and it is unclear if the EEOC’s claims will ultimately prevail. 

Since the passage of the EEOC’s guidance in April of 2012, employers, government agencies, states, the background screening industry, along with other affected stakeholders have voiced their dismay over the guidance.  Employers should ultimately be aware that the EEOC has identified eliminating barriers to hiring as one of its highest priorities in its strategic enforcement plan.

As an employer, you need to be heard and remind the EEOC about why you utilize criminal background checks in your employment decisions.  They need to clearly understand the significant risks and costs of workplace violence, fraud, theft and a need to protect vulnerable populations within the workplace.  It’s an employer’s duty to provide a safe and productive workplace for their employees.

Employer Resources for Criminal Background Checks

For now, employers can reference the “Enforcement Guidance” on the EEOC’s website along with a Q&A section available for employers as a resource.  The Enforcement Guidance also offers examples of individualized assessments that are consistent with meeting Title VII regulations.  “Section VIII. Employer Best Practices” also provides insight into general considerations, developing policy, questions regarding criminal records, and confidentiality of such information.  Employers should also revisit compliance measures throughout the process to ensure appropriate disclosure and authorization to conduct background checks, along with the inclusion of specific state notifications for proper compliance.  The Fair Credit Reporting Act - FCRA provides the rules and responsibilities that must be followed by employers and also consumer reporting agencies (background screening companies) to ensure full compliance with the law. Employers are also urged to consult with their employment counsel to review policies and procedures on an on-going basis.  EBI, along with other industry experts will continue to weigh-in and keep you informed regarding developments regarding this topic.

Employment Background Investigations Inc., (EBI) is committed to providing employers with valuable education and resources on changing legislation, 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 publication 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.

EBI is a technology driven innovator and leader in providing domestic and global pre employment background checks, drug testing, occupational healthcare, and I-9 compliance solutions for employers.  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 a founding member and active participant within the National Association of Professional Background Screeners (NAPBS).  EBI is the only background screening firm to hold an ISO27001:2005 certification for information security and to be accredited by the Background Screening Credentialing Council (BSCC) created by the NAPBS.

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

 

Ban the box legislationMany 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).            

Six States have Currently Enacted Statewide Ban the Box Legislation

Colorado

House Bill 1263 states that employers may not inquire about an applicant’s criminal history until a conditional offer of employment has been made.

Minnesota

State law H. F. 1301 states that a public employer may not inquire into an applicant’s criminal history until the applicant has been selected for an interview by the employer.

New Mexico

Senate Bill 254 states that a board, department, or agency of the state may not make an inquiry regarding an applicant’s criminal history on an initial employment application. The law further mandates that the aforementioned state agencies are prohibited from taking an applicant’s criminal conviction history into consideration unless that applicant has been selected as a finalist for the position.

Hawaii

House Bill 3528 states that an employer, employment agency and/or labor organization cannot discriminate against an applicant due to an applicant’s “court and arrest record”.

Connecticut

House Bill 5207 states that, “a person shall not be disqualified from employment by the state [of Connecticut] or any of its agencies, nor shall a person be disqualified to practice, pursue or engage in any occupation, trade, vocation, profession or business for which a license, permit, certificate or registration is required to be issued by the state [of Connecticut] or any of its agencies solely because of a prior conviction of a crime.”

Massachusetts

Massachusetts General Laws Chapter 151B, Section 4, 804 CMR 3.01 places restrictions and limitations on what an employer can and cannot ask on an initial employment application regarding criminal record histories.

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

 

employment credit reportsKaplan’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.

Background Checks Continue To Influence Key Factors In Hiring Decisions

 

Background CheckA recent survey of randomly selected HR professionals conducted by the Society of Human Resource Management (SHRM) asked the question.  “In general, when making a hiring decision about a job candidate, which are the most important factors influencing the final decision to hire a particular candidate over another?”   The survey revealed 9 key factors, of which 8 are directly supported by a comprehensive background check.  Responses to this question confirm the critical role that background checks play in the decision making process for new hires.


The following are responses based on order of influence within the final decision making process:

  • 87% - Previous work experience directly applicable to the job
  • 86% - A good fit with the job and organization
  • 78% - Specific skills expertise needed for the job (e.g., technical skills, communication skills)
  • 78% - Performance during the interview (e.g., professional demeanor, good communication skills)
  • 60% - Favorable reference background check results (e.g., verification of employment history)
  • 60% - Education directly applicable to the job
  • 59% - Favorable criminal background check results (e.g., criminal history)
  • 51% - Certifications directly applicable to the job (e.g., CPA, PHR, PMP)
  • 19% - Favorable credit background check results (e.g., credit history)

Two-thirds of the most influential factors are supported and can be properly assessed through conducting a comprehensive background check on potential new hires.  Knowing more about your candidate up front is critical to determining proper qualifications, experience, skill level, and even potential security or safety risks for a complete candidate evaluation.  A comprehensive background check will take a closer look into the following core areas:


Past Employment Experience

Previous employment experience and performance can be a great indicator of future performance.  A thorough employment verification should never be taken lightly and employers should never rely on a candidate’s resume or job application for this information.  Connecting the employment history dots and looking for potential fraud is critical and a thorough verification should be conducted with all relevant past or even current employers.

In a down economy or within a competitive job market, pressure on job-seekers is even higher as record numbers of candidates are vying for a significantly reduced number of jobs. Candidates typically use creative methods to enhance their work experiences: create longer work histories with a particular employer; stretch position titles such as Administrative Assistant into Operations Manager; and expand work responsibilities to separate them from the competition.

Here are a few ways candidates are getting more creative with providing previous work history:  

  • Providing only the year of a start and end date creates the perception of longevity at a past employer or eliminates a "gap" in employment
  • Stretching the dates of employment at one employer to cover employment at an undisclosed company that may not provide a favorable reference
  • Lying about the reason for separation from a past employer
  • Exaggerating job titles to reflect greater job responsibilities and work experience
  • Failing to disclose the nature of employment as an intern or a part-time position
  • Using the name of recognized global brands as an employer where the candidate was employed under an affiliate contract or through a part-time staffing firm
  • Providing exaggerated levels of income to obtain a higher starting pay rate
  • Listing fictitious overseas employment in hopes that it will not be verified

Candidate fraud is costly to a company’s bottom line from: loss of productivity due to unqualified employees; additional recruiting and on boarding costs for replacement hires; and the cost in training, time and effort for your staff to verify each candidate’s employment history.  Thorough and detailed interviews need to be conducted for all relevant employers and supervisor references for potential employers to get the complete facts around candidate experience.  This will help ensure that the candidate is a good fit for the job and your organization.


Proper Education and Credentials

For many positions, education credentials play a key factor in the domain knowledge a candidate possesses in a particular area of study.   Think about an unqualified engineer responsible for designing airplanes or at the controls of a nuclear plant; or a physician with no professional medical education diagnosing patients.  This seems pretty outrageous; however, there are over 2,615 known diploma and accreditation mills identified by Verifile Limited within a 2011 Accredibase Report.  These diploma mills provide fraudulent or unaccredited degrees to individuals for just a few dollars and include little to no course work.  Padding or manufacturing education credentials provide a way for candidates to separate themselves on their application in hopes of being more competitive or even to qualify for a higher salary.  Here are a few tactics that candidates use to pad or even embellish their education credentials:

  • Lying about obtaining a high school diploma or GED certificate
  • Providing a degree from post-secondary school where a candidate only attended and never graduated
  • Listing a different or additional degree from an institution to pad credentials
  • Padding transcripts or grade point averages
  • Providing a fraudulent degree from a well-known institution
  • Obtaining a degree from a diploma mill that offers unaccredited degrees with little to no course work
  • Padding honorarium certifications or extracurricular involvement while attending school
  • Listing a fictitious overseas education in hopes that it will not be verified

The practice of lying about education credentials leads to higher turnover, production loss, concerns for public safety and even higher wages.  Education credentials should always be verified directly by the institution, no matter if an applicant provides a copy of their diploma or even a transcript.

Applicable Certifications
Certain positions may require certification, continuing education or a license issued by a governing body or association that represents a particular industry or profession.   Certifications can range from a commercial driver’s license (CDL), certified public accountant (CPA), successful completion of a professional engineering exam (PE), holding a certain rank from the military or obtaining a certificate in Human Resources such as Senior Professional in Human Resources (SPHR) or other credentials.  These types of certifications may be a requirement of federal or state law to practice professionally, work in a certain industry, or obtained as part of experience or tenure in a professional career or required continuing education to maintain their professional certification.  Certifications provide an additional level of education, training and professional commitment to support a candidate’s expertise and technical skills.  All are supported by a professional governing body where an individual’s license or certification can be verified.  Employers should never take an applicant’s certification or license credentials at face value and should always verify its existence through the issuing body.  Hiring professionals in certain security and safety sensitive positions may be required by law and hiring such individuals without proper verification could result in heavy fines, sanctions or even criminal penalties to employers, if not verified.   Applicants looking to elevate themselves on their application or resume may use such credentials as separating factors for professional experience.

Here are a few things that employers need to keep in mind when verifying credentials or a license held by an individual:

  • Understand that a professional license may be required by government law to practice in certain professions
  • Never rely on a candidate’s title or professional designation at face value
  • Only verify the validity and accuracy of an applicant’s credentials/license directly through the issuing body or originating source
  • Verify if the date of issue matches the candidate’s claims along with noting the expiration date of the certification or license
  • Note current status and type of license obtained through the issuing body
  • Obtain any disciplinary actions taken against an individual or license

Criminal Background Checks
Criminal background checks are a vital part of the screening process for employers striving to achieve due diligence for the purposes of increasing workplace security, safety, and reducing the potential of negligent hiring litigation.  Criminal background checks that support this goal should be comprehensive and comply with all international, federal, state and local laws.  A comprehensive background check should include a thorough search of criminal records within all areas where a candidate has lived, worked and even attended school.  A thorough search should also include an electronic criminal database search to uncover potential criminal offenses committed outside of a subject’s residential movement patterns.  An electronic criminal database includes records from all 50 states and includes information from the Department of Corrections, Department of Public Safety and Multi-state Sex Offender databases.  Additional information such as FBI, U.S. Marshal, U.S. Customs, U.S. Department of Justice, U.S. Secret Service, DEA fugitive and most wanted files is also included.  All information reported from the database needs to be verified from its original reporting source for proper compliance with the Fair Credit Reporting Act (FCRA).

When analyzing criminal information as part of the decision making process, employers should always be mindful of the following factors associated with the crime and the position being applied for.  Employers are encouraged by the Equal Opportunity Employment Commission (EEOC) to consider the “green factors” when analyzing criminal data as it relates to employment decisions. 

  1. The nature or gravity of the offense or conduct;
  2. The time elapsed since the conviction and/or completion of the sentence; and
  3. The nature of the job sought or held

On April 25, 2012, the EEOC issued enforcement guidance through its publication titled “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”  Employers using criminal history information within their decision making process should develop a documented policy and process when evaluating such information to ensure compliance with EEOC regulations.


The Use of Credit History
Credit reports are a critical element of the background screening process for many employers. Banking, finance, security, public safety and the pharmaceutical industry are just a few industries that rely heavily on credit reports for making a hiring decision.  Consider a candidate for a government position who has defaulted on a government backed student loan or possesses tax liens against them.  What about an employee that has fiduciary responsibility over company funds, check writing authority, or access to large amounts of cash?  Consider an employee that is granted a company credit card and struggles to manage their own personal credit within acceptable limits.  What about an employee that has access to customer credit card information or confidential consumer information which could lead to potential identity theft?  A credit report may give insight into a candidate’s stability and trustworthiness for a specific position, although there is no proven correlation to a candidate’s credit score and their ability to perform a job.  For that reason, a credit score is not part of an employment credit report.

Proper use of credit report information within the hiring decision process is imperative to avoid discrimination and legal liability.  Each report should be reviewed on an individual basis and employers should provide a candidate/employee with an opportunity to respond to derogatory information found within their credit history, since many times there are unavoidable circumstances which lead to poor credit.  Create a policy that is consistent when using credit reports as part of the screening process and be aware of potential restricted use within certain states.

Specific state laws have been enacted 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.

Additional Credentialing
Certain industries such as healthcare, childcare, security, transportation and banking may require specific screening due to federal and/or state law or may be required due to the safety and security risks within a particular industry or specific profession.  Specific background screening components such as screening against the FBI database, the need for fingerprinting, bonding or the search of domestic and international sanction lists may be a required within the screening process.  Other requirements may include yearly screening of criminal history, driving records, credit evaluation or a check against fraud databases.  Pre-employment or ongoing drug and alcohol testing or a regime of physical exams or fitness tests are mandatory for specific positions in certain industries as well.  It’s important that employers have a firm understanding of these requirements within their particular industry for proper compliance.

Conclusion
By incorporating a comprehensive and compliant background screening program you can properly assess, screen and credential your future employees and alleviate the overwhelming challenges, risks and liabilities of making a bad hiring decision.  It is important that all employers work with their legal counsel to develop a policy that is legally compliant and within EEOC guidelines.  Proper assessment, credentialing and validation of a candidate’s attributes and skills will help to ensure you find the right candidate for the right job and ultimately add to the future success of your company.

Employment Background Investigations works with employers across the nation and around the world to provide a full range of comprehensive and legally compliant background check solutions to help reduce the risks and liability of a bad hire.  EBI can help design a program that is comprehensive, compliant, and timely by using a combination of county, state, federal and national electronic database resources for a complete criminal background check solution.

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.

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EBI to Present At 2012 Gulf Coast Symposium on Human Resource Issues

 

Robert Capwell

Employment Background Investigations, Inc (EBI) Chief Knowledge Officer, Robert Capwell, will present an education session at the Gulf Coast Symposium on Human Resource Issues in Houston, Texas on Wednesday, May 9th at 3:45pm titled - Critical Employment Background Screening Resources for HR Professionals in Texas.

Discussion topics within Mr. Capwell's presentation will include searching criminal records and sex offender databases in the state, an overview of education and employment fraud, and using social media for employee screening.   Capwell’s presentation will also highlight the complexities of navigating state and EEOC regulations for proper compliance as well as following FCRA guidance when conducting employee background checks.  In light of the recent updates to the EEOC’s Enforcement Guidance on the Consideration of Arrest and Conviction Records, Mr. Capwell will dedicate a portion of his session reviewing how these changes impact the employment decision-making process.

EBI’s Regulatory and Compliance Department is dedicated to working diligently on Capitol Hill and with other regulatory agencies to keep our clients informed about legislative and regulatory changes that affect our industry.  Richard Kurland, President and CEO, stated that, “It is EBI’s commitment to our industry and clients which guides us in providing essential information to ensure compliance within the screening process for HR professionals.”  The Gulf Coast Symposium on Human Resource Issues will be held May 9-10, 2012 at the Reliant Center in Houston, Texas.

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 will continue to update you on any further action or information available regarding this topic.

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