Re-screening Your Employees

You have just extended a conditional offer to a job candidate to fill that vacant position at your company. The conditional offer is contingent upon the results of his/her background check. You follow FCRA guidelines through the entire hiring/screening process. The background check is completed, and you see that the candidate has no criminal record. Your job is done now, right? The new hire has been deemed safe and his qualifications acceptable. So you won’t ever need to screen him/her again, right? WRONG.

There are many reasons to re-screen your employees:

•          Employees in safety-sensitive positions
•          Employee have contact with customers
•          Employees work with children/elderly
•          A change in employee responsibilities
•          A promotion gives an employee access to assets or sensitive employee info

Safety-Sensitive Positions

Re-screening is important in some of the high risk positions, such as transportation or any job requiring the operation of heavy machinery. In the transportation industry, keeping track of one’s driving record is essential. You don’t want a reckless or drunk driver operating a vehicle for your company. The operating of any heavy machinery can be dangerous. For the safety of themselves, fellow employees, and others, we recommend routine drug screening, another party of the screening process.

Contact with Customers

When your employees work directly with customers, you have an obligation to regularly screen your employees. This is especially important when they work inside customers’ homes. While a red flag may not have been spotted in the pre-employment background check, criminal activity may occur during the employment of an individual. A current look at an employee’s criminal history can help ensure the safety of your customers.

Work with Children/Elderly

Children and the elderly are particularly vulnerable. As an organization that deals with either demographic, it is your duty to make sure you are not putting them at risk. You have a duty to your customers to ensure that they are not exposed to someone who is a sex offender or has a history of violence. An up-to-date look at the criminal history of those who work with them is one way of protecting this defenseless group.

Change in Employee Responsibilities

Whether a lateral or vertical move is made by an employee, there will be changes in responsibilities. And since your background check should be based upon the responsibilities of the job, you may need to run a different or more thorough search on the employee.

Access to Assets or Sensitive Employee Info

A promotion typically means more access to capital, other assets, or sensitive employee information. Because of this, employers may want to initiate a more involved background check. For example, work with the company’s finances may warrant a credit check. When the employee was hired, his background check may have consisted of only a national criminal search. This search casts a wide net, but is not as reliable as screening at the local level. Therefore, it would be prudent to order a county criminal search for a more up-to-date look at the employee’s criminal history.

A recent survey determined that only about 30% of employers have an active program for re-screening their employees. That is an alarming number. If you want to protect your company, your employees, and your customer base, it is imperative that you consider re-screening your workforce.

If you are not sure where to begin with your company’s re-screening policy, start by identifying the jobs that require re-screening. You can do this by considering the following questions:

•          What are the responsibilities of the position?
•          How much access will the employee have to assets and/or customers?
•          Is the position high-risk?

Once you have identified the situations that require re-screening, craft a written policy to handle decisions, such as grounds for termination based on the background check, and any possible disagreements that may follow.

Three Employers Face Class Action Lawsuits from the Same Law Firm

 Despite all of the FCRA-related class action suits taking place, it appears large companies are not taking an appropriate course of action to ensure they are in compliance. One has to wonder whether, whether it is simply a lack of attention to detail (That would be a surprise) or simply HR/Legal/Compliance not staying current. The latest three companies in question are Panera, LLC, American Multi-Cinema, Inc. (AMC), and Nine West Holdings. Two of these class action suits involve the same plaintiff, and all three are from the same Florida law firm. In each of these cases, the plaintiff applied for employment online. Each of these companies allegedly failed to provide a valid, compliant consent form before initiating pre-employment background checks.

An employer’s obligation before obtaining background information is as follows (from the co-published FTC/EEOC guide):

·         Tell the applicant or employee you might use the information for decisions about his or her employment. This notice must be in writing and in stand-alone format. The notice can’t be in an employment application. You can include minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it does not confuse or detract from the notice.

·         If you are asking a company to provide an “investigative report” – a report based on personal interviews concerning a person’s character, general reputation, personal characteristics, and lifestyle – you must also tell the applicant or employee of his or her right to a description of the nature and scope of the investigation.

·         Get the applicant’s or employee’s written permission to do the background check. This can be part of the document you use to notify the person that you will get the report. If you want the authorization to allow you to get background reports throughout the person’s employment, make sure you say so clearly and conspicuously.

You can find the FTC/EEOC guidance as a whole here.

Panera allegedly violated the FCRA by not providing a consent form specifically for a consumer report. The plaintiff also alleged that the bakery-café chain included extraneous information that detracted from the notice. American Multi-Cinema, Inc. (AMC) allegedly did not have a stand-alone consent form for online application for employment. And finally, Nine West Holdings allegedly had consent language that was part of a web page that contained a number of links to Nine West information on the website.

The main takeaways from these alleged violations is:

·         Your consent, AKA disclosure and authorization, must be a stand-alone (not part of the application) form.

·         The consent form cannot contain extraneous information

·         The purpose of the consent must be clearly stated (i.e. employment screening)

The lawsuit demonstrates that violations of the FCRA can create large potential liability.  Potential class members, including employees and prospective employees, may be entitled to statutory damages of up to $1,000 for each violation in the case of willful non-compliance. Class action lawsuits also create exposure for large awards of attorney’s fees and the potential exposure to punitive damages.

If you have any doubts about your company’s FCRA compliance, PLEASE act before you wind up on the wrong end of a class-action lawsuit.

FTC and EEOC Co-Publish Background Screening Compliance Guide

On March 10, 2014, the U.S. Federal Trade Commission (FTC) and Equal Employment Opportunity Commission (EEOC) co-published two guides to help employers and applicants understand how to implement a legally compliant background screening program. The two documents are titled Background Checks: What Employers Need to Know and Background Checks: What Job Applicants and Employees Should Know. The FTC is in charge of enforcing the Fair Credit Reporting Act (FCRA), a federal law that regulates collection, dissemination, and the use of consumer information. The EEOC enforces Title VII of the Civil Rights Act, which prohibits discrimination by employers on the basis of race, color, religion, sex or national origin.

Both agencies stress that employers get permission from applicants before getting background reports, and must not unlawfully discriminate in the use background checks. The agencies are both tasked with regulating background screening, so they decided to work together on this guidance. The objective of the guidance is that both sides (employers and job applicants) fully comprehend their rights as well as their obligations.

The first guide, Background Checks: What Employers Need to Know, contains instruction for employers on several steps of the background screening process. Both agencies include compliance information at each stage of the process. There is instruction on what to do before you get background information, how to use background information, and the disposal of background information.

The second short guide, Background Checks: What Job Applicants and Employees Should Know, serves to educate applicants and employees on their rights and how to handle a breach of their rights by an employer. The guidance is written in plain terms so as clearly understood by consumers. There is also contact information should an applicant/employee feel their rights have been violated.

You can find the full guide for employers here.

You can find the full guide for applicants and employees here. 

Litigation Brought Against Whole Foods for FCRA Violations

                  

On February 7, 2014, litigation was brought against Whole Foods for the use of invalid authorization forms in the background screening process. The lawsuit claims the “defendant obtained consumer reports on the plaintiff and similarly situated persons without having obtained factually valid FCRA authorization forms”. 

The online application process included a form labeled “Consent”. Whole Foods allegedly had a section in this form that states “I hereby release the company, my former employers and all other persons, corporations, partnerships and associations from any and all claims, demands or liabilities arising out of or in any way related to such investigation or disclosure.” The form also included other paragraphs that should not be part of a consent form. 

The plaintiff claims that a valid consent form was used, but not until after Whole Foods had already implemented a background check.

The invalid consent forms were allegedly used on thousands of applicants. Should this class action suit be successful, Whole Foods may be paying upwards of $1000 to each class member for the violation. 

FCRA Violations:

1) A consent form, which informs the consumer that a background check may be obtained as a condition of employment, must be signed by the applicant. The consent form, which consists of the required disclosures and requested authorization, cannot include any extraneous information. Including a section in the form about the releasing of liability for companies receiving or providing information for the background check is definitely not legal.

2) When the plaintiff allegedly received the valid consent form is also an FCRA violation. An applicant must sign a valid consent form BEFORE the background check is run, NOT after. 

$1000 per applicant is not something many companies can afford. Precaution should be taken to insure the consent form utilized does not include anything other than the disclosures and requested authorization. Also, get authorization BEFORE you run the background check on the applicant. As always, you should discuss this topic with your in house counsel.

If you have any comments or questions about FCRA compliance, please let us know.

New California Law in Effect: Senate Bill 530

Attention: California Employers

Hundreds of new laws went into effect in California at the beginning of the year. One in particular, Senate Bill 530, has a profound effect on employers and their hiring practices.

The law states “No employer, whether a public agency or private individual or corporation, shall ask an applicant for employment to disclose, through any written form or verbally, information concerning an arrest or detention that did not result in conviction, or information concerning a referral to, and participation in, any pretrial or post-trial diversion program, or concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law”.

Basically, if it did not result in a conviction, you (employers) cannot ask the applicant about it. This applies to diversion programs as well. A satisfactorily completed deferral program is not classified as a conviction. Upon completion of diversion programs, records are often expunged. If the conviction has been expunged, you cannot ask about it. Seeing a pattern? DO NOT ask or seek out information pertaining to charges that did not result in a conviction or have been sealed by the courts.

It also states that you cannot use another source to get information on dismissed criminal charges. As a consumer reporting agency, we focus on reporting convictions. Prior to this law coming into effect, we already refrained from including anything other than charges that resulted in a conviction. This new law is aimed at employers in California who are inquiring about charges that were dismissed and things of that nature.

The law seeks to protect ex-offenders from being discriminated against in the hiring process. If an employer breaks this law, the applicant can bring action against that person to recover actual damages or $200 (whichever is greater) as well as reasonable attorney’s fees. The intentional violation of this law will allow the applicant to treble actual damages or $500 (whichever is greater) plus reasonable attorney’s fees. This intentional violation is also a misdemeanor punishable by a fine of up to $500.

As an employer, you are not privy to information regarding an applicant’s arrests that did not result in a conviction. The law is meant to give someone with a criminal record a second chance. Breaking this law can result in civil penalties. You, as an employer, are responsible for being aware of this new law. Intentionally ignoring the new law can result in misdemeanor criminal charges.

Here is the entire bill.

E-Verify Update

  While it is not mandatory nationwide at this time, there has been recent legislation making E-Verify a requirement in some states. It is important, as an employer, to be aware of your state’s requirements and which businesses it applies to. Each state has a different policy.

A total of 20 states require the use of E-Verify for at least some public and/or private employers: Alabama, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, and West Virginia.

Recent Legislation:

Georgia: The Georgia Illegal Immigration Reform and Enforcement Act of 2011 (HB 87) mandates that private employers with over 10 employees register with and use E-Verify. The mandate’s first effective date was January 1, 2012 for businesses with 500+ employees. On July 1, 2013 the requirements became effective for businesses with 10+ employees. 

North Carolina: The North Carolina General Assembly enacted HB 36 that required businesses in the state with 25 or more employees to use E-Verify on all new hires. North Carolina, much like Georgia, has been using a phased approach. HB 36 became active in October 1, 2012 for employers with 500+ employees. As of July 2013, it now applies to employers with 25+ employees.

Pennsylvania: SB 637, enacted in July 2012, requires all public works state contractors and subcontractors with contracts worth $25,000 or more to enroll and use E-Verify by January 1, 2013.

Tennessee: The Tennessee Lawful Employment Act (HB 1378) requires all employers with more than 5 employees to use E-Verify. A phased in approach was used, starting with private companies with 500+ employees in January of 2012. The Act applies to employers with 6+ employees as of January of 2013. The Act also requires employers to maintain documentation of non-employees paid directly by the employer in exchange for labor or services.

Below is a list of specifics for each state that requires the use of E-Verify for employment eligibility verification.

	State	Citation	Year Enacted	Applies to:	Penalties:
1	Alabama	HB 56 HB 658	2011 2012	All employers (phase in) Contractors and subcontractors; prime contractors not liable for subcontractor complying with E-Verify unless they know of the violation	Cancellation of state government grants or incentives and suspension or revocation of business license up to 60 days, and possible debarment from state contracts. A business license can be permanently revoke on a second offense
2	Arizona	HB 2779 HB 2745	2007 2008	All employers	Temporary AZ business license suspension for 10 days upon first offense; permanent AZ business license suspension upon second offense
3	Colorado	HB 1343 SB 139 SB 193	2006 2008 2008	State agencies, contractors	Contractors may become ineligible to receive state contracts. The Colorado Secretary of State’s Office will post the names of vendors using contractors who knowingly employ illegal aliens to perform work on any public contracts for the state
4	Florida	EO 11-02 EO 11-116	2011 2011	State agencies, contractors, subcontractors	Possible denial of future county projects
5	Georgia	SB 529 HB 2 SB 447 HB 87 HB 742 HB 1027	2006 2009 2010 2011 2012 2012	Public employers, contractors, subcontractors with 500+ employees (phase in)	Failure to comply could result in the suspension or denial of a business license, occupational tax certificate, or other document require to operate a business in the state
6	Idaho	EO 2009-10	2009	State agencies, contractors	Immediate cancellation of the contract, reversion of unspent public funds, and monetary penalties. Every contract by a state agency for a state project or service shall include appropriate civil penalties for violation this executive order
7	Indiana	SB 590	2011	State agencies, contractors	State agencies or political subdivisions may terminate a public contract if the contractor knowingly employs an unauthorized alien
8	Louisiana	HB 342 HB 646 HB 996	2011 2011 2012	State contractors Option for private employers	Failure to complete the affidavit or use E-Verify as required would cause the work to be terminated and bar the contractor from future bidding or contract work for up to three years. HB 646 makes it a state offense to employ unauthorized workers and provides E-Verify as a defense to any charges brought under HB 646
9	Michigan	HB 5365	2012	State agencies, contractors, subcontractors	Employers who do not use E-Verify may have all state contracts terminated and become ineligible for public contracts for three years, and/or may have licenses, permits, or certificates suspended for one year.
10	Mississippi	SB 2988	2008	All employers (phase in)	Employers who do not use E-Verify may have all state contracts terminated and become ineligible for public contracts for three years, and/or may have licenses, permits, or certificates suspended for one year.
11	Missouri	HB 1549 HB 390	2008 2009	Public employers, contractors, subcontractors	A violating company’s business permit and licenses shall be suspended for 14 days. Upon the first violation, the state may terminate contracts and bar the company from doing business with the state for 3 years. Upon second violation, the state may permanently debar the company from doing business with the state.
12	Nebraska	LB 403	2009	Public employers, contractors	Loss of eligibility for state contract work and/or state economic incentives.
13	North Carolina	SB 1523 HB 36	2006 2011	State agencies, universities Localities, all employers (phase in)	Failure to comply with HB 36 can result in civil fines ($10,000+) and notification to U.S. Immigration and Customs Enforcement and local law enforcement agencies.
14	Oklahoma	HB 1804	2007	Public employers, contractors, subcontractors	Ineligibility to receive a state contract(s).
15	Pennsylvania	SB 637	2012	Public contractors, subcontractors	First violations incur a warning letter detailing the violation, posted on the website of the Department of General Services of the Commonwealth. On a second violation, the contractor is debarred from public work for 30 days. Upon subsequent violations, the contractor is debarred from public work for 180-365 days. In the case of willful violation, the contractor is debarred from public work for a period of three years. Contractors will also incur a penalty of $250-$1,000 per violation.
16	South Carolina	HB 4400 SB 20 HB 4813	2008 2011 2012	Public employers, contractors (phase in) Private employers Establishes a 24-hour hotline to report E-Verify violations	Possible civil penalty of up to $1,000 per violation and the revocation of the business license.
17	Tennessee	HB 1378	2011	All employers with 6+ employees (phase in)	Employers can incur a penalty of $500 plus an additional $500 for each employee not verified for a first violation; $1,000 plus and additional $1,000 for each employee not verified for a second violation; and $2,500 plus and additional $2,500 for each employee not verified for subsequent violations.
18	Utah	SB 81 SB 39 SB 251 HB 116	2008 2009 2010 2011	Public employers, contractors, subcontractors Private employers with more than 15 employees	Ineligibility to enter into a state contract(s). A private employer may be held civilly liable under state law in a cause of unlawful hiring of an unauthorized alien.
19	Virginia	HB 737 HB 1859 SB 1049	2010 2011	State agencies Public contractors, subcontractors with more than 50 employees	Any employer, including contractors, found to be in violation shall be debarred from entering into a contract with any agency of the Commonwealth for up to one year. The employer shall be released from debarment upon registration and participation in E-Verify. A contractor who fails to enroll and participate in E-Verify may be denied prequalification for contracts.
20	West Virginia	SB 659	2012	Public Employers, contractors	Loss of eligibility for state contract work and/or state economic incentives.