S2Verify Has Received NAPBS Accreditation

We are proud to announce that we have received accreditation by the National Association of Professional Background Screeners’ (NAPBS®) Background Screening Credentialing Council (BSCC). This endorsement from the NAPBS validates our commitment to service excellence. This accreditation serves as proof of our business and process standards. It reflects the values our company has maintained since its inception in 2009.

To become BSCC-accredited, consumer reporting agencies must pass a rigorous on-site audit, conducted by an independent auditing firm, of its policies and procedures. The audit focuses on six critical areas: consumer protection, legal compliance, client education, product standards, service standards, and general business practices. Only about 10% of background screening providers in the United States are NAPBS accredited. We are so honored to be in elite company and recognized as one of the leaders in our industry. 

For more information about NAPBS accreditation and what it entails, click here. 

Ban-the Box Update (August 2014)

Many cities and states are adopting or expanding "Ban the Box" regulations. Here is the latest.

San Francisco

                Today, August 13^th, San Francisco’s Fair Ordinance goes into effect. They certainly are not the first to enact what many are calling “Ban the Box” legislation. This ordinance applies to both the public and private sector. San Francisco employers need to ensure they are up to code on their background screening.

Illinois

                Another change employers should be aware of is Illinois’ expanded “ban the box” legislation that now includes private employers. This makes Illinois the fifth state in the nation to require both public and private employers to limit inquiry about convictions. The other states are Minnesota, Hawaii, Massachusetts, and Rhode Island. Illinois is calling their “Ban the Box” legislation the Job Opportunities for Qualified Applicants Act. It takes effect on January 1, 2015. 

New Jersey

                Governor Chris Christie signed the Opportunity to Compete Act on August 11^th. This law expands New Jersey’s “Ban the Box” regulations to the private sector, much like Illinois’ Job Opportunities for Qualified Applicants Act. It is set to take effect on March 1, 2015. This makes New Jersey the 13^th state to adopt “Band the Box” legislation, and the 6^th state to expand the regulations to the private sector.

“Ban the Box” legislation is spreading like wildfire. As a background screening provider, the only thing we can do is keep you updated on the latest employment screening standards.

While S2Verify cannot provide legal advice, we can suggest you discuss with counsel, the following guidelines:

•          Do not ask about arrests that did not lead to a conviction

•          Do not ask about an individual’s conviction history at the beginning of the hiring process (such as the application)

•          Only after a conditional offer has been made can one ask about criminal history

•          Only convictions related to the job can be considered in the decision to deny employment

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.

Louisville: The Latest City to "Ban the Box"

Add Louisville to the list of cities who have “banned the box”. The Louisville Metro Council passed the new law earlier this month. This means that city employers cannot include a section on the application that asks the applicants to reveal if they have been previously convicted. Louisville joins over 50 cities/counties who have some form of the ban-the-box policy.

These ordinances serve to discourage employers from denying a qualified job-seeker based solely on a prior conviction. This particular law pertains to jobs for the City as well as vendor/contractors who do business with the City. The law pushes back the inquiry into the applicant’s criminal history until later in the hiring process. For more on Louisville’s new ordinance, visit NELP.org.

We are seeing more and more of these policies. Half of the states in the U.S. now have at least one city with a ban-the-box policy. Expect more soon. We will keep you up-to-speed. 

Latest Class Action - Canon Solutions America Inc.

Canon Solutions America Inc. is the latest company to come under compliance fire for an alleged failure to follow FCRA guidelines. Anya McPherson, the individual responsible for the class action, claims that Canon Solutions America fired her without offering her a chance to dispute the results of a background check. McPherson also claims that the charge was more than a decade old and that the conviction was expunged. To make matters more complicated for Canon, the plaintiff also stated that she did not receive a copy of her report, and did not receive a summary of her rights under the FCRA.

Due to the high frequency of cases being brought against employers for FCRA violations, I decided to include a ‘refresher’ for FCRA compliance. 

Please be sure to take into consideration the following:

1) Before Obtaining A Consumer Report

If you intend to use a consumer report for employment purposes, you must provide written disclosure of your intent to perform a background check as a condition of employment. You must also get permission from the applicant. This comes in the form of a written consent form. Once you have obtained consent from the applicant, you can move forward with the background check. The Disclosure and Consent should be kept as separate clearly defined documents or ‘pages’ if you will.

2) Pre-Adverse Action

Adverse Action basically means that you may or intend to deny the applicant employment based on the information you obtained from the background check. If based on your review of the background you plan to pass on the applicant based on this info, you must send the applicant a pre-adverse action letter. 

The Pre-Adverse Action letter must include the following re notification:

• The name, address, and phone number of the Credit Reporting Agency (CRA)

• The fact that the CRA didn't make the adverse decision and cannot give reasons for the decision

• His/her right to a free copy of the consumer report within 60 days

• His/her right to contact the CRA to dispute the accuracy of the report

• Summary of Rights including any State specific requirements

3) Adverse Action

After you have given the applicant 5 days to dispute the report, you may take Adverse Action against the applicant. You must notify them of your final decision to deny employment based upon their consumer report, through use of an Adverse Action Letter, which also must contain all of the above notification provisions mentioned above under pre adverse.

The FTC and EEOC also co-published guidance on the proper procedure for background screening, which can be found here. 

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. 

Assessment of the Effects of EEOC's 2012 Background Screening Guidance

In December of 2012, the U.S. Commission on Civil Rights held a briefing to assess the effects of the Equal Employment Opportunity Commission’s 2012 Guidance. This briefing was held to discuss the impact that their guidance had on background screening for both black/Hispanic applicants and employers. Record of this briefing was just released as a 346-page report. I have taken the time to summarize the main points discussed in the report.

The briefing consisted of 17 speakers from diverse backgrounds. While some of the speakers were pro-EEOC Guidance, many speakers took issue with the 2012 Guidance in some way or another.

The speakers are as follows: 

• Alfred Blumstein, Professor of Urban Systems, Carnegie Mellon University

• Carol Miaskoff, Acting Associate Legal Counsel, EEOC

• Don Livingston, Parter, Akin, Gump, Strauss, Hauer & Feld

• Garen Dodge, Partner, Jackson Lewis LLP

• Glenn E. Martin, Vice President of Development and Public Affairs and Director of the David Rothenberg Center for Public Policy at the Fortune Society

• Harry Holzer, Professor of Public Policy, Georgetown University

• Jeffrey Sedgwick, Co-Founder, Keswick Advisors

• Jonathan Segal, Partner, Duane Morris LLP, Legislative Director, Society for Human Resource Management

• Julie Payne, Sr. Vice President and General Counsel of G4S Secure Solutions USA

• Lucia Bone, Founder of Sue Weaver C.A.U.S.E. (Consumer Awareness of Unsafe Service Employment)

• Montserrat Miller, Partner, Arnall Golden Gregory; Counsel, National Association of Professional Background Screeners (NAPBS)

• Nick Fishman, Co-Founder, Chief Marketing Officer and Executive Vice President, EmployeeScreenIQ

• Richard Larson, President, Winning Work Teams, Inc.

• Richard Mellor, VP, Loss Prevention, National Retail Federation

• Roberta Meyers, Director of Legal Action Center’s National Helping Individuals with Criminal Records Reenter through Employment Network, Also Known as H.I.R.E

• Todd McCracken, President, National Small Business Association

• William Dombi, VP, National Association for Home Care and Hospice

Objective of EEOC Guidance

The EEOC claimed the 2012 Guidance is in response to a disparate impact background screening has had on racial minorities. In other words, minorities have been experiencing difficulties while seeking employment due to a past criminal conviction. The objective of the EEOC is to give minorities an equal chance to re-integrate into society.

The Guidance:

• Puts employers on notice that categorical exclusions for people with certain arrest and conviction records may violate Title VII

• Emphasizes its earlier recommendation that job applications not ask about criminal records, and if they do ask, that they limit inquiries to conviction records for which exclusion would be job-related with business necessity

• Offers a series of examples of common policies and practices that violate Title VII 

• Informs local and state governments that barring people with certain criminal records from jobs or occupational licenses also could violate Title VII.  

Advocates of the EEOC Guidance made several arguments for its most recent list of best practices:

• There are over 65 million individuals with criminal records in this country

• By age 35, one-third of all young black men have been incarcerated at some point. 

• A person should not be haunted many years later by a mistake they made at a young age.

• Criminal Records have a more negative impact on employment for minorities.

• Recidivism probability declines with time clean after an arrest or conviction.

• Recidivism is less probable if an individual gains employment.

Speaker Glenn E. Martin presented a study that showed that black applicants with a criminal record were twice as likely to be denied a job as white applicants. He also reported that black and Latino applicants with clean backgrounds fared no better than white applicants just released from prison.

Harry Holzer made several compelling points:

“The prevalence of arrests and convictions among less-educated American men substantially reduces employer willingness to hire them later in life and worsens their employment outcomes more generally, in ways that generate clear “disparate impacts” on minority (especially black) men.

The very high costs of previous criminal histories on employment are borne not only by the offenders themselves, but also by their families and children, their communities, and the US economy more broadly; accordingly having some successful policy efforts to improve employment outcomes for this population are in the nation’s interest.

The EEOC Guidance should be viewed as one of several potentially effective legal and policy efforts to reduce the many barriers to employment among men with criminal records and thus to improve their employment outcomes.”

The Other Side of the Argument

Many speakers stressed that employers should not be restricted in their use of background checks due to:

• The reality of recidivism

• The prevalence of violent and/or theft-related offenses among inmates. 

• OSHA rules that require employers to provide a safe workplace. 

• Federal, state and local laws and licensing requirements that restrict individuals with certain convictions from employment in selected occupations. 

• State laws that put employers at risk for hiring mistakes. 

• Employer desire to protect business assets.  

Major Concerns 

Many speakers took issue with at least some part of the 2012 Guidance. The concerns that were echoed by the majority were:

• The Guidance is unclear. It is written in a way that is confusing to small business owners.

• The Guidance is vague about the act of conducting an individualized assessment.

• A conflict may arise when a state law mandates a background check, but taking adverse action based on that background check may result in a class action.

• The EEOC’s strategic enforcement plan to create class claims from individual claims encourages investigators to conduct overbroad inquiries.

• The EEOC’s restriction on the use of criminal background checks will have disastrous effects on public safety.

• The guidance results in more risk to the employer. For instance, an employer may feel pressure to hire an employee with a criminal record against his better judgment, resulting in a negligent hiring law suit. 

The EEOC aims to give minorities a fair chance to obtain a job after a conviction. They argue that the struggle to re-integrate into society has a profound effect on not only the individuals involved, but the economy as a whole. Frankly, nobody wants an individual to be perpetually unemployed because of a single mistake they made. But according to those opposed to the guidance as it stands, here lies the dilemma. 

The opposition claims if an employer takes a chance on an applicant with a prior conviction, employees and clients are potentially put at risk. By treating minorities with prior convictions as a protected class, are we putting co-workers and customers at risk? Who is correct, the EEOC or those who spoke out against the Guidance? 

We do not have the answer, but we do feel a certain responsibility to help companies comply with the EEOC’s 2012 Guidance. Our clients can rest assured that we will provide as much information as possible to help them maintain compliance. Some of the concerns that were voiced by several speakers have not yet been answered, but we will keep an eye on any potential developments/changes the EEOC might make. 

You can find the U.S. Commission on Civil Rights’ entire report here. Comments? Concerns?