Dollar General Next on the List for the EEOC

According to Dollar Generals latest 10Q, they are being investigated by the EEOC regarding their Background Screening Policy and how they use criminal records in hiring. The EEOC has alleged that Dollar General has discriminated against minorities for the way they apply their policy against applicants with criminal records.

Although the complaint has not been settled, it will be a long and arduous process to resolve this matter with the EEOC. 

All companies should review their employment screening policy and process to adhere to the "New Guidelines" published by the EEOC.  

Indiana to Restrict Use of Criminal Records

The State of Indiana recently passed a law that prohibits the use of certain criminal records.   The new law Indiana House Bill 1033 limits the use of what Employers may obtain from an applicant, what a "consumer reporting agency" (CRA) may obtain from the state courts and what a CRA can report to employers. 

Effective July 1, 2012, the prohibits courts from disclosing information on alleged infractions where the records is:

• is not prosecuted or if the action against the person is dismissed;
• is adjudged not to have committed the infraction; or
• is adjudged to have committed the infraction and the adjudication is subsequently vacated;
• was convicted of the infraction and satisfied any judgement attendant to the infraction conviction more than five years ago.
• the court in which the action was filed shall order the clerk not to disclose or permit disclosure of information related to the infraction to a noncriminal justice organization or an individual.

The bill also contains additional requirements that take effect on July 1, 2013.  We will send out more information on these new requirements as we move closer to the effective date.

Vermont Joins Growing Number of States Restricting Use of Credit Checks for Employment Purposes

Effective July 1, 2012, Vermont joins California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Washington, as jurisdictions which restrict an employer’s right to obtain and use credit information for making employment decisions.

Under this new law, a Vermont employer may not inquire about or use an applicant or employee’s credit report or credit history with respect to employment, compensation, or a term, condition, or privilege of employment unless: 1. The information is required by state or federal law or regulation; 2. The position being sought or held involves access to confidential financial information (defined as sensitive financial information of commercial value that a customer or client of the employer gives explicit authorization for the employer to obtain, process, and store and that the employer entrusts only to managers or employees as a necessary function of their job duties); 3. The employer is a financial institution as defined in 8 V.S.A.§ 11101(32) or a credit union as defined in 8 V.S.A. § 30101(5);  4. The position being sought or held is that of a law enforcement officer as defined in 20 V.S.A. § 2358, emergency medical personnel as defined in 24 V.S.A. § 2651(6), or a firefighter as defined in 20 V.S.A. § 3151(3); 5. The position being sought or held requires a financial fiduciary responsibility to the employer or a client of the employer, including the authority to issue payments, collect debts, transfer money, or enter into contracts; 6. The employer can demonstrate that the information is a valid and reliable predictor of employee performance in the specific position being sought or held;  and/or 7. The position being sought or held involves access to an employer’s payroll information.  However, even if an employer can avail itself of one of these exemptions, the applicant or employee’s credit report or history may not be the sole factor in decisions regarding employment, compensation, or a term, condition, or privilege of employment.

If an employer is lawfully permitted to obtain credit history, the employer must: 1. Obtain the employee’s or applicant’s written consent each time the employer seeks to obtain the employee’s or applicant’s credit report; and 2.  Disclose in writing to the employee or applicant the employer’s reasons for accessing the credit report, and if an adverse employment action is taken based upon the credit report, disclose the reasons for the action in writing. The employee or applicant has the right to contest the accuracy of the credit report or credit history.

Vermont employers who conduct credit checks must closely review this statute to ensure that information is only obtained where permitted by law and that all necessary disclosures are provided to applicants and employees.   Further, even if an exemption is applicable, a Vermont employer must not base any employment decisions solely on credit history.

Feel free as always to direct any questions on the appropriate use of Credit Reports to compliance@s2verify.com

EEOC Issues Enforcement Guidance On the Use of Arrest and Criminal Conviction Record in Employment Screening

The EEOC issued their Enforcement Guidance today, April 25, 2012, on how arrest and criminal conviction records can and should be used by employers with regards to hiring.  

The guidance document can be found at www.eeoc.gov/laws/guidance/arrest_conviction.cfm.

We encourage you to please take the time to read this document.  Should you have questions, please feel free to reach out to us at anytime for further discussion.

Background Checks & Credit Reports

 On March 13th, Commissioner Victoria Lipnic of the Equal Employment Opportunity Commission (EEOC) spoke at an event on "Due Diligence, Background Checks and Employment: Protecting the Safety of Employees, Customers and At-Risk Populations." Lipnic stated that the EEOC is "likely" to issue new guidance to employers on the use of both criminal history and credit background checks in the near future.

Regarding criminal history, Lipnic noted that the EEOC was unlikely to establish a strict rule about the specific period of time after which a conviction could no longer be considered in making employment decisions. Lipnic, however, cautioned that employers should avoid "blanket" bans on hiring individuals with criminal convictions as such bans could have a disparate impact on certain minority groups.

The event was hosted by the National Association of Professional Background Screeners, the Consumer Data Industry Association, and the U.S. Chamber of Commerce.

(http://www.eeoc.gov/eeoc/lipnic.cfm)

FTC Issues Employers Guidance for FCRA

The Federal Trade Commission (FTC) issued Employers Guidance for the use of Consumer Reports. 

While this information is not new, the Guidance is another step by the Federal Government, both the FTC and EEOC, to ensure that companies are following the Fair Credit Reporting Act(FCRA).

Please review these brief guidelines to ensure your company is in compliance.

FTC Sends Warning Letters to Background Companies Using Mobile Apps

The Federal Trade Commission (FTC) issued warning letters to several companies that have designed and implemented easy background checks thru mobile devices.  In the letter the FTC states that the apps could violate consumer reporting laws.


The letter states the following:

"Under the FCRA, a company is a consumer reporting agency (CRA) if it assembles or
evaluates information on consumers for the purpose of furnishing consumer reports to third
parties. Consumer reports include information that relates to an individual's character,
reputation or personal characteristics and are used or expected to be used for employment,
housing, credit, or other similar purposes. For example, when companies provide information to
employers regarding current or prospective employee's criminal histories, they are providing
consumer reports because the data involves the individual's character, general reputation, or
personal characteristics. Such companies, therefore, are acting as CRAs in this capacity and
must comply with the FCRA. .....

The Commission reserves the right to take action against you based on past or future law
violations; your practices also may be subject to laws enforced by other federal, state, or local
law enforcement agencies. A violation of the FCRA may result in legal action by the FTC, in
which it is entitled to seek injunctive relief and/or monetary penalties of up to $3,500 per
violation."  says the FTC.

"The FTC and EEOC have stepped up efforts to enforce the Fair Credit Reporting Act.  With the adoption of the internet and the amount of data that can be accessed by companies, Credit Reporting Agencies (CRA's) must take additional steps to ensure the accuracy and efficacy of the data they report.   This cannot happen if the companies making these apps aren't reviewing the applicants records to ensure that they are held to the state and federal rules and standards." says Bill Whitford, CEO of S2Verify.

"Although I applaud the technology initiative, there can be steps taken to review the information before it is reported."  ... Bill Whitford

About S2VERIFY:
S2Verify is a leading process innovator in the application of background screening and employment screening technologies to the needs of business and individuals for employee and tenant information that is comprehensive in scope, delivered quickly to key managers, and easy to read, understand and use by authorized personnel. With offices in Atlanta, Chicago and Miami the privately-held company specializes in providing a customizable yet fully integrated, best-in-class set of background screening services that address business and consumer needs either poorly met or not met at all by leading, nationally-branded providers of mass-market background screening solutions