EEOC Issues New Strategic Enforcement Plan

The Equal Employment Opportunity Commission (EEOC), an agency of the federal government created by the Civil Rights Act of 1964 to prevent discrimination, created an enforcement plan in December 2012 for years 2013 through 2016. This month, the EEOC has put together a strategic enforcement plan (SEP) for years 2017 through 2021. One of the ways the EEOC combats discrimination is targeting unfair, discriminatory recruitment and hiring policies. Employers with fifteen or more employees are subject to the guidelines of the EEOC. The guidelines for proper recruiting measures can be found here.

For 2017-2021, the EEOC will be focusing on class-based recruitment practices that discriminate against racial, ethnic, religious groups, older works, women, and those with disabilities. Due to an expanding temporary workforce, the EEOC has made it its priority to focus on temporary workers, staffing agencies, and independent contractor relationships.

EEOC Initiatives:

1. Eliminating Barriers in Recruitment and Hiring.
2. Protecting Vulnerable Workers, Including Immigrant and Migrant Workers, and Underserved Communities from Discrimination.
3. Addressing Selected Emerging and Developing Issues.
4. Ensuring Equal Pay Protections for All Workers.
5. Preserving Access to the Legal System.
6. Preventing Systemic Harassment.

As a 3^rd-party provider of background screening, we will be focusing on the first initiative. The EEOC means to target screening tools that disproportionately impact workers based on their protected status. They include pre-employment tests, background checks impacting African American and Latinos, date-of-birth inquiries that impact older workers, and medical questionnaires that impact individuals with disabilities.

The EEOC’s recommendations for proper use of background information:

• Apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older). For example, if you don't reject applicants of one ethnicity with certain financial histories or criminal records, you can't reject applicants of other ethnicities because they have the same or similar financial histories or criminal records.
• Take special care when basing employment decisions on background problems that may be more common among people of a certain race, color, national origin, sex, or religion; among people who have a disability; or among people age 40 or older. For example, employers should not use a policy or practice that excludes people with certain criminal records if the policy or practice significantly disadvantages individuals of a particular race, national origin, or another protected characteristic, and does not accurately predict who will be a responsible, reliable, or safe employee. In legal terms, the policy or practice has a "disparate impact" and is not "job related and consistent with business necessity."
• Be prepared to make exceptions for problems revealed during a background check that were caused by a disability. For example, if you are inclined not to hire a person because of a problem caused by a disability, you should allow the person to demonstrate his or her ability to do the job - despite the negative background information - unless doing so would cause significant financial or operational difficulty.

Make sure your company is not using date of birth for anything other than a criminal record search. Any other use of the date of birth could be construed as discrimination against older workers. Be certain any exclusions based on criminal history are relevant to the tasks required of the job and do not negatively impact a certain race exclusively. Lastly, give applicants with disabilities a chance to prove his/her capability to do the job at hand.

We recommend companies review their recruitment and hiring practices to ensure that they are in line with EEOC requirements.  To see the SEP in full, click here.

Screening Your Seasonal Workforce

October through January are big months for the retail industry in terms of sales volume. Unfortunately, the holiday season also accounts for about half of all annual shrinkage. Shrinkage is the loss of inventory that can be attributed to factors such as employee theft, shoplifting, administrative errors, vendor fraud, etc. The two biggest causes of retail shrinkage in the U.S. are employee theft at 43% and shoplifting at 32%.

Forty-three percent is an alarming number for employee theft. It is no coincidence that these four months require the hiring of seasonal workers to help with increased foot traffic and sales volume. With these appalling numbers in mind, how can retail companies combat this seasonal employee theft epidemic?

For starters, retail companies should be aware that cutting corners with their screening process will not save their business money in the long run. Shrinkage results in a loss of $42 billion for U.S. retailers annually. With almost half of the $42 billion in shrinkage occurring during the holidays, it is a no-brainer to require the same background screening standards to seasonal workers as full-time employee. However Holding seasonal workers to the same standards as full-time employees means nothing if you are conducting a bare-bones background check on full-time employees. Reducing shrinkage requires a background check that is comprehensive in scope.

Secondly, it is important to remember that if an individual has stolen from their employer, they are more likely to repeat that offense. Bolster your employment verification process by requiring a reference from the individual’s last employer. While the applicant may not have been convicted of theft, their employment may have been terminated for deceitful practices such as: entering refunds or discounts, cancelling transactions, or modifying prices at the cash register. A lot of theft is the result of dishonest practices at the cash register.

If your company is in the retail industry, take a look at your background screening procedure. Are you doing the bare minimum? If your background check consists only of a national database search, you are more likely to hire someone who has committed theft in the past. If you have any questions about fortifying your background screening process, please feel free to use the comments section or contact S2Verify at 1 855 671 1933. 

FTC Issues Guidance to Landlords for the Use of Consumer Reports

The FTC has issued a publication that helps landlords understand the proper steps to take when using background checks.  Much like its guidance, Background Checks: What Employers Need to Know, this publication details the obligations of users of consumer reports under the Fair Credit Reporting Act (FCRA). The guidance details what a consumer report is, what is required before the use of a consumer report, and the proper adverse action steps.

The FTC defines a Consumer Report as any information about a person’s credit characteristics, rental history, or criminal history. These reports include:

•          A credit report from a credit bureau, such as Trans Union, Experian, and Equifax or an affiliate company;
•          A report from a tenant screening service that describes the applicant’s rental history based on reports from previous landlords or housing court records;
•          A report from a tenant screening service that describes the applicant’s rental history, and also includes a credit report the service got from a credit bureau;
•          A report from a reference checking service that contacts previous landlords or other parties listed on the rental application on behalf of the rental property owner; and
•          A report from a background check company about an applicant or tenant’s criminal history.

Before Getting a Consumer Report

The guidance puts an emphasis on permissible purpose. Permissible purpose means that landlords have a legitimate business need that requires a background check. In the case of landlords, they must only use consumer report information for the purpose of screening applicants and/or tenants who apply for rental housing or renew a lease. While written consent is not required from applicants, it is a great way for landlords to prove they have permissible purpose for the use of a consumer report.

The FTC notes that landlords should avoid a blanket policy of refusing to rent to anyone with a criminal history, as it may violate the Fair Housing Act.

Adverse Action

It is important to note that adverse action does not only consist of the denial of an application. Adverse action also includes:

•          The necessity for a cosigner on a lease if an applicant does not meet the income requirements;
•         The requirement of a deposit that would not be required for another applicant;
•         The requirement of a larger deposit than might be require for another applicant; and
•         Raising the rent to a higher amount than for another applicant.

Whether an employer or a landlord, one thing remains constant. You must provide the applicant notice that you are taking adverse action (any of the measures listed above) and the reasons for the action. While the notice can be given orally, in writing, or electronically, we recommend that the notice is given in writing for auditing purposes. Please note that an adverse action notice is required even if the consumer report wasn’t the primary reason for the decision. If the consumer report played any part in the decision making process, the applicant/tenant must be notified.

The Adverse Action Notice must include:

• the name, address, and phone number of the consumer reporting company that supplied the report;
• a statement that the company that supplied the report did not make the decision to take the unfavorable action and can't give specific reasons for it; and
• a notice of the person's right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get a free report from the company if the person asks for it within 60 days.

To view the guidance in full, click here.

California Assembly Bill 1289: Mandatory Background Checks for TNC Drivers

Assembly Bill 1289, passed on September 28^th, has made background checks mandatory for drivers working for a Transportation Network Company (TNC) in California. This bill applies to both employees and independent contractors.

What is a TNC?

TNCs are organizations that connect paying passengers with drivers who provide transportation using their own non-commercial vehicles. All parties connect to the service via website and mobile apps. These are companies like Uber and Lyft.

Background check requirements for TNCs:

•         A multi-state and multi-jurisdiction criminal records locator or other similar commercial nationwide database with validation; and
•         A search of the United States Department of Justice (USDOJ) National Sex Offender Public website

A TNC shall not contract with, employ, or retain a driver if he/she meets the following criteria:

•         Is currently registered on the USDOJ National Sex Offender public website
•         Has been convicted of a violent felony
•         Has been in violation of Section 11413, 11418, 11418.5 or 11419 of the Penal Code

A TNC shall not contract with, employ, or retain a driver if he/she has been convicted of any of the following offenses in the last seven years:

•         Misdemeanor assault or battery
•         Domestic violence offence
•         Driving under the influence of alcohol or drugs
•         A felony violation of Section 18540 of the Elections Code

Assembly Bill 1289 goes into effect on January 1, 2017. We recommend that each Transportation Network Company review their background screening procedure to ensure compliance with the new bill as well as the Fair Credit Reporting Act and other local laws. Each violation of the new law will result in fines between one and five thousand dollars per incident.

To view Assembly Bill 1289 in full, click here. 

Vermont the Latest State to Ban the Box

Governor Peter Shumlin has signed a bill to remove questions regarding criminal history from employment applications. The bill, which Governor Shumlin says, “will break down barriers and give Vermonters who have paid their debt to society a fair chance to find a good job”, makes Vermont the 23^rd state to enact a state-wide ban-the-box policy. While each bill that has been passed is a part of the ban-the-box movement that continues to sweep the nation in 2016, each bill differs in who it applies to and at what point it is legal to use a background check.

So what does this mean for employers in Vermont?

It means that job applications for both state and private employment cannot include the infamous question, “Have you been convicted of a crime?” But that is not all. The bill comes with the stipulation that inquiry into an applicant’s criminal history cannot take place until after the applicant has been deemed otherwise qualified for the position. The executive order does not apply to law enforcement, correctional facilities, or “other sensitive positions”.

The bill takes effect on July 1, 2017. The new law makes Vermont the ninth state to extend the fair-chance policy to both public and private employers. The motivation behind the policy, according to Governor Shumlin, is to decrease recidivism and allow those with a criminal history to properly reintegrate into society. Failure to comply with provisions laid out in the bill may result in a civil penalty of up to $100 for each violation.

To view the bill in full, click here.

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S2Verify is an NAPBS-accredited process innovator in the application of integrated hiring solutions and employment screening technologies. S2Verify’s services cater to the needs of organizations that rely on employee and volunteer information that is comprehensive in scope, delivered quickly to key managers, and easy to read, understand, and use by authorized personnel. Headquartered in Atlanta with Operational Support Centers in Miami and Chicago, the privately-held company specializes in providing a customizable yet fully integrated, best-in-class set of applicant tracking, drug screening, and criminal background checks 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. The focus on addressing shortcomings in the background screening industry attributed to S2Verify’s inclusion in the Inc. 500’s list of fastest growing companies in the United States.

The Truth About Fingerprint Checks

Fingerprint checks are required by the state for many industries, education for instance, and are thought of as one of the most reliable ways to screen job candidates. And with mandatory fingerprint checks in place in many states, people have no choice but to buy into this misconception. And when I say, “buy into this misconception," rest assured that you are paying for it. The state of Washington, for example, charges $45.75 for fingerprint background checks. If you think that is bad, in the state of New York fingerprint background checks can cost up to $102. So with costs that high, surely fingerprint checks are the most comprehensive, accurate way to screen applicants. Unfortunately, this is not the case.

In truth, it is an unreliable, faulty way to vet new employees. Issues include:

·         An incomplete FBI database that is missing as many as 50% of its criminal records

·         Irregular updates to fingerprint-based records that cause the information to be far from current

·         An inclusion of arrest records that, according to the FCRA, are not to serve as a basis for employment decisions without a conviction based on that arrest

·         Unlike a background report from a consumer reporting agency based on personal identifiers (Name, DOB, SSN, etc.), FBI reports do not allow the individual to challenge the results

An example of an FBI rap sheet

So with this many problems, how is it possible that states and municipalities are still passing legislation requiring the use of this defective method of employment screening? Well, that all boils down to legislators who do not understand the inadequacies of this method of screening. Until legislators are made aware of these shortcomings, many industries are forced to continue use of this inaccurate screening procedure.

If your company is not a part of an industry that falls under the umbrella of state-mandated fingerprint checks, we recommend a criminal background check that uses personal identifiers to match convictions, and only convictions, to the right individual. This method of screening is FCRA-compliant, more accurate, and more reasonably priced.

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S2Verify is an NAPBS-accredited process innovator in the application of integrated hiring solutions and employment screening technologies. S2Verify’s services cater to the needs of organizations that rely on employee and volunteer information that is comprehensive in scope, delivered quickly to key managers, and easy to read, understand, and use by authorized personnel. Headquartered in Atlanta with Operational Support Centers in Miami and Chicago, the privately-held company specializes in providing a customizable yet fully integrated, best-in-class set of applicant tracking, drug screening, and criminal background checks 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. The focus on addressing shortcomings in the background screening industry attributed to S2Verify’s inclusion in the Inc. 500’s list of fastest growing companies in the United States.

FTC Issues New Guidance on Background Screening for Consumer Reporting Agencies

A new guidance titled “What Employment Background Screening Companies Need to Know About the Fair Credit Reporting Act (FCRA)” has been released by the Federal Trade Commission (FTC) to better define the responsibility background screening firms have to clients and consumers in general. Background reports are described by the FTC as consumer reports under the FCRA as they “serve as a factor in determining a person’s eligibility for employment, credit, insurance, housing, or other purposes which include information on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.”

The responsibilities of consumer reporting agencies under federal law are stated as such:

·         Following reasonable procedures to assure accuracy

·         Getting certifications from clients

·         Providing clients with information about the FCRA

·         Honoring the rights of applicants and employees

Following reasonable procedures to assure accuracy

The release of this guidance tells you one thing. Many consumer reporting agencies are not taking reasonable measures to ensure that the report is accurate. Ensuring accuracy means a couple of different things. One, the background screening company needs to make sure that the information obtained relates to the individual in question. And two, the information obtained has not been expunged or otherwise sealed.

Essentially, our duty to our clients and consumers alike is to provide background information that can be directly linked to the applicant/employee through personal identifiers, and the report consists of strictly convictions as opposed to arrest records. Individuals should not be punished for an arrest that did not result in a conviction. That is why our adjudication team verifies any information found in a national criminal database search at the county level.

Getting certifications from your clients

Basically, CRAs need to make sure that their clients have a permissible purpose to obtain the background report. In this case, permissible purpose means that the background check is used solely for the determination of employment. Therefore, background screening companies must get confirmation from their clients that:

1)      The employer notified the applicant and got the applicant’s written permission to get a background report

2)      The employer will comply with the FCRA requirements; and

3)      The employer won’t discriminate against the applicant or employee, or otherwise misuse the information in violation of federal or state equal opportunity laws or regulations

It is for this reason that clients are firmly vetted before the use of our services. Once it is confirmed that the client is a business using our services solely for employment purposes, they must sign an agreement that states that they will comply with FCRA requirements, including attaining consent prior to conducting a background check. Consent forms are stored for auditing purposes.

Providing your clients with information about the FCRA

Clients must receive information about their responsibilities under the FCRA. The document “Notice to Users of Consumer Reports” must be provided to each client to ensure they know what is required of them under the statute. One such responsibility of employers is informing every applicant or current employee of their consumer rights in terms of background screening. This information, known as “A Summary of Your Rights Under the Fair Credit Reporting Act”, is to be provided to each applicant/employee undergoing a background check.

Honoring the rights of applicants and employees

Because the use of consumer reports can bar individuals from employment, credit, insurance, or housing, it is important for consumers to know their rights. These rights are protected under the FCRA due to the major impact inaccuracies can have on an individual’s ability to obtain employment. The following is a list of consumer rights under the FCRA:

·         You must be told if information in your file has been used against you

·         You have the right to know what is in your file

·         You have the right to dispute incomplete or inaccurate information

·         Consumer reporting agencies must correct or delete inaccurate, incomplete, or unverifiable information

·         Consumer reporting agencies may not report outdated negative information

·         Access to your file is limited

·         You must give your consent for reports to be provided to employers

·         You may seek damages from violators

To read the FTC guidance in full, click here.

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