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Just Say No? Updating Your Workplace Drug Policy in a Changing Social and Legal Envirnoment
As a result, many employers may wonder if their workplace drug policy adequately addresses the complex patchwork of laws and regulations surrounding drugs in the U.S., as well as emerging social trends like the growing incidence of prescription drug abuse. View this recorded webinar to learn: 1. How the legal and regulatory landscape of drugs in the U.S. is changing, with particular emphasis on marijuana 2. Social issues, including shifting attitudes toward marijuana and the growing awareness of prescription drug use 3. Best practices for reviewing your workplace drug policy
Addressing Drug Use’s Changing Social and Legal Environment in Your Workplace Policies
Most organizations understand the importance of effective drug testing, with 78% of respondents to HireRight’s 2013 Employment Screening Benchmarking Report having such a program. However, a myriad of laws and social changes have complicated workplace drug screening, leaving many employers wondering if their drug policy adequately addresses this complex patchwork of laws and regulations.This ebook will review best practices for reviewing your workplace drug screening policy.
Building a Safe and Productive Workplace – How Organizations are Winning with Drug Screening Best Practices
Employers are adopting drug screening programs to mitigate the risk of hiring drug users, which may result in lower productivity, increased turnover, increased insurance costs and decreased safety in the workplace. This paper explores the trends and challenges surrounding drug screenings and the six best practices and solutions for implementing an effective program. It also provides a list of important criteria to consider when evaluating drug screening providers.
Use of Hair for Drug Testing Gaining Momentum with Transportation Companies
If hiring drug-free employees is important to your company, urinalysis can detect recent use, but hair testing can tell you much more. Urine testing typically detects only drug use from the past 48 to 72 hours. But what about drug use in the weeks or months prior to the test? Hair testing can identify drug use as far back as three months and it is much more difficult to tamper with than urine testing. This article reveals key findings from a comparative test conducted by J.B. Hunt, a top for-hire motor carrier, a comparative drug testing index by Quest Diagnostics and more.
Applicant Tracking
Best Practices for Integration – Tips for Integrating Applicant Tracking and Background Checking Solutions
Ten years ago, background checking processes were informal, inconsistent, slow, costly, manual and paper-intensive. Today, employment screening has evolved into a formalized, consistent and automated procedure that is conducted by most large organizations. The business demands that drive screening programs have become increasingly complex, fueling the need for management solutions to help HR professionals better cope with a litany of new concerns.
Background Screening General
The Magnificent Seven: The Coming Trends that Will Impact Background Screening
When you publish the leading newsletter for the professional background screening industry (The Background Buzz) your monthly preparation involves reading hundreds of articles and publications that deal with hiring, recruiting, talent management and acquisition. Add to this numerous newspapers from around the world, business journals, blogs of every sort you can imagine and management publications. It’s the price I have to pay to stay informed about what is happening in the hiring world to keep the information we provide to our readers fresh and relevant.
Distilling this down to seven key trends at one level is farcical, but from a writing perspective ‘magnificent seven’ flows nicely and sounds good. Conspicuously absent from my top trends are some items that are, in my opinion, inherently obvious, so I chose not to highlight them. The first is the binge that we are currently on with class action lawsuits for FCRA violations. Several more cases that I am aware of have been filed in January and February, and it is highly likely this pattern will continue throughout 2015. The second issue that is becoming ubiquitous is the march to use mobile technology. The use of mobile devices has stimulated a revolution in consumer marketing and selling; and is now morphing into wearable technologies. Some time in the not too distant future there will be breakthrough for applying this technology to the hiring process and we will see unprecedented change.
My magnificent seven trends are a mixture of good news and bad news for firms involved in conducting background checks. The good news is that a number of the trends track with the growth in the job market which will feed an increase in the demand for background screening services. The bad news is that the background screening industry is a mature industry and it is only a matter of time before emerging technologies will arrive that will cause catastrophic change in the industry. We are starting to get a glimpse into some of the potential technologies that could wreak havoc, however, if history bares any witness, it is most likely to be something that none of us saw coming.
1. Ban-the-Box will become the Norm
The Ban-the-Box train has left the station and will continue to roll in 2015. We may even reach a tipping point where a majority of the states have passed these laws at which time a national debate will ensue about the need for one overarching federal law to ease the hodgepodge of requirements employers will need to heed.
2. Pre-hire Reference Assessment Tools to Rise
53 million Americans now freelance according to a new study which means 34% of U.S. workers are freelancing. It’s a worldwide trend that is being fueled by technologies that enable and facilitate peoples’ ability to work from anywhere and to have access to tools that were historically only available to major companies. So what does this have to do with background checking.
Think about it!
How do you verify employment of someone that is their own boss?
Reference checking with freelancers’ customers will enter the picture and will further fuel the growth of online pre-hire reference assessment tools.
In addition, new tools will emerge to meet the need to assess of this emerging worker category.
3. Fast Hiring Will Drive Changes in the Fundamental Way Background Checks are Performed
Companies are striving to connect with and hire the top candidates faster than ever before. Advances in connectivity, websites, accessibility and communication platforms have made this possible. Increasingly a measure of success will become how quickly can a company pull in talent they need. According to recent article in Human Capital magazine “What many employers are currently doing is looking at traditional ways of getting resources, but realizing that these channels aren’t fast enough. It takes 42 days on average to hire someone, even for short term role, and the vast majority are
consequently looking to online options, which can cut this down to as little as three days.”1
Wow! Three days!
How are you going to revamp your background checking process so it is not an impediment to fast hiring in the future? The firms that figure this one out will reap tremendous benefits and run away profits.
4. High Turnover Trends will Feed the Increase in Growth of Background Checks
Every HR publication you read today has content focused on the high growth in turnover and the need for employee engagement to try to stem the tide of employees leaving. Unfortunately, this trend is going to escalate as the economy continues to improve and more jobs become available. Many of the people that hunkered down and stayed put during the recession are now going to make the leap.
This forebodes well for background screening firms because as the job churn continues it will increase the level background checks performed. Cha-ching!
5. International Background Screening will Continue to Grow
In the international arena background screening is going to take off in China. Right now, they are in ‘the wild, wild west’ scenario, but as more companies enter this burgeoning marketplace things are going to get really interesting. We have already seen the first lawsuit filed by a rejected applicant about improper use of background checks and also a case of the owners of a firm being sentence to prison terms for violating privacy laws. The need for standards and regulations will become very apparent and we are likely to see new laws passed relating to the background screening process as this area heats up and government exerts its control.
Fueled by several horrific incidents background checks are now required for people working in schools in India. This will increasingly move the process towards the mainstream and more industries will start to do background checks in India. This will stimulate unprecedented growth in the background screening industry.
We are on the cusp of when the number of background screening firms outside of the U.S. will rival the number of firms in the marketplace historically dominated by U.S. companies.
6. Big Data Will Change Everything
“Just like cloud computing, data protection and privacy have been all the rage and the sexy topics over the last several years-we now have a new beauty queen called “Big Data” and she is going to change everything.”2
While it is not likely to come to fruition in 2015 the road to change is going to start to get paved as an increasing focus on talent and hiring technologies are going to emerge with the current hiring frenzy
intensifying. Experts agree that big data, alongside the right data mining technology, can provide unprecedented new insights and predictive patterns into employees (not just customers), leading to improved recruitment and talent acquisition decisions which may put significant strain on the need for a background check. If employers are able to crack the code to identify the exact mix of information required to hire a candidate to succeed in a specific job who needs to do a background check. Stay tuned because the revolution will not be televised.
7. Move over Linkedin
A new contender to the crown will emerge to compete with Linkedin as the darling of B2B social media and it will be designed for job search and use as a pre-employment screening tool unlike Linkedin. The new contender will be FCRA compliant and will give traditional background screening companies a run for their money.
I hope you enjoyed my soiree into the land of predictions and welcome your feedback and comments on my look into the crystal ball.
Bibliography
1. Taylor, Chloe,’Ten workplace trends to expect in 2015,’ Human Capital Magazine, Jan 7, 2015, http://www.hcamag.com/hr-news/ten-workplace-trends-to-expect-in-2015-195400.aspx.
2. Kuperman, Anna ‘Notes from the iappANZ President,’ ANZ Dashboard Digest, December 19, 2014, https://privacyassociation.org/news/a/notes-from-the-iappanz-president-december-19-2014/
About the Author
W. Barry Nixon, SPHR, is the COO, PreemploymentDirectory.com. He is the co-author of the book, Background Screening & Investigations: Managing Hiring Risk from the HR and Security Perspective. He also publishes The Background Buzz and The Global Background Screener which keep professional background screeners around the world informed about latest news impacting the industry.
PreemploymentDirectory.com is also the leading online directory of professional background screening firms featuring U.S., International background screening firms and suppliers of background screening services. Barry is a past recipient of Security Magazine’s prestigious recognition having been named ‘One of the Top 25 Influential People in Security.’
You can contact Barry at 1(949)-770-5264 or online at wbnixon@preemploymentdirectory.com
Optimizing Outcomes When Changing Employment Screening Providers: A Blueprint for Successful Change Management
Many organizations are dissatisfied with their background screening provider for a variety of reasons – slow turnaround time, poor data quality, lack of international expertise, or poor/nonexistent applicant tracking system (ATS) integrations. And while the thought of changing providers can be daunting, it doesn’t have to be. Download HireRight’s white paper, Optimizing Outcomes When Changing Employment Screening Providers: A Blueprint for Successful Change Management, to learn: the challenges employers face when replacing screening providers, the primary stages of change, a four-step implementation plan, and key criteria for evaluating background screening providers.
Maintaining Your Organization’s Competitive Edge: Seven Questions for Auditing Your Background Screening Program
With so many people looking for a job, ironically it is challenging to acquire quality talent. When you’ve narrowed the pool and are ready to background check your candidates, you should take steps to ensure you are complying with regulatory requirements and ever-changing legislation. To help determine if your program is performing at peak level, examine these seven questions to help you audit your background screening program.
The Importance of the Applicant Experience in Talent Acquisition
After six months, you are almost to the finish line. Since posting a crucial job opening, you have sifted through hundreds of resumes, rejecting almost all of them because they do not meet the specific experience requirements. Following an intense interview process which included more than a dozen applicants, you and the hiring manager at last agree on the right person for the position, who is currently employed. You are ready to make a contingent offer of employment and suddenly a concern crosses your mind. Your organization has had recent applicant feedback about frustration with the background screening process. Complaints include confusion due to poor communication, difficulty accessing the screening provider’s systems, and even getting help from the screening provider’s service representatives, who don’t seem to understand applicants’ unique needs. Will this important applicant experience the same issues, decide that this initial impression of your organization is a red flag, and walk away? Or even share the negative experience with others via social media, in effect becoming a detractor of your organization’s brand
Results of the 2011 Employers’ Background Screening Practices Survey
This year we continued our approach of sending out a pre-conference post card to encourage HR Managers attending the SHRM Annual Conference to complete the survey online and over 33% (more than 140) of our response were received this way. The attendees at the conference were very engaging and most rewarding for us it appeared that attendees were more knowledgeable about background screening and interested in the survey,
From a results perspective it was business as usual for the ‘Top Challenges’ with timeliness, cost and accuracy of data once again reigning as the top three issues of concern.
Most noteworthy about the question on desired innovations was the increase in the number of respondents that volunteered an innovation. Also while ‘integration with HRIS systems’ was the most frequently mentioned item the clear interest in timely responses was very evident and the dominant message.
Good news for the industry was that of the 378 responses to the question on level of satisfaction 61% were extremely or very satisfied with their current provider. However, despite this positive rating from a retention perspective only 32% of clients responded that they were not planning on changing providers. In other words 2 out 3 clients were either definitely planning or changing or were undecided whether to change. This survey is far too simplistic to decipher the underlying issues associated with the divergent responses on these two questions, however, even so, it does point to something that is happening that may be of concern to the industry.
Many Employees Would Sell Corporate Information, Finds Study
A recent SailPoint Market Pulse survey of more than 3,400 employees in the United States, Great Britain and Australia, found that many are willing to disclose classified, sensitive, or proprietary corporate information after they have resigned or been laid off. SailPoint is a market-leading identity governance solution company that helps the world’s largest organizations to mitigate risk, reduce IT costs and ensure compliance. In Great Britain, an alarming 24 percent of employees with access said they would feel comfortable selling proprietary data for profit, compared with only 5 and 4 percent for Americans and Australians, respectively. In fact, British employees yielded the highest percentages for many of the questions when asked if they would feel comfortable doing something with the data, whether it be forwarding electronic files to a non-employee, or copying files and taking them with them when they left. ”Organizations should be very concerned about the number of employees that openly admitted to misusing proprietary data,” said Jackie Gilbert, vice president of marketing and cofounder at SailPoint. “These results show that insider threats represent a significant risk to the business. Some of the biggest and most costly data breaches have been directly tied to company employees. Having a written policy is not enough to ensure data security. Organizations need to have automated controls in place to monitor and manage user access controls in order to minimize the risk of insider theft or sabotage.”
SHRM Research – Use of Social Networking for Screening
Survey findings center on social networking websites and online search engines as a tool for screening potential job candidates. The data reveal that legal risks, lack of verifiable data and lack of the job-relatedness of the information gleaned from these sites can be just some of the reasons why organizations are avoiding these online resources as a method to screen potential job candidates.
Controversy Abounds In Employment Decisions Based On Social Media Searches
Social media legal experts and various literature point to a multitude of issues and risks faced by both the CRA and the employer who uses social media checks, which include, but are not limited to:
. Problems under FCRA section 607(b) in exercising “reasonable procedures to assure maximum possible accuracy” of the information. Since the information on social media sites is self-reported and can be changed at any time, it is often difficult if not impossible to ascertain that the information is accurate, authentic and belongs to the subject. Online identity theft is not uncommon, as are postings under another person’s name for the purpose of “cyber-slamming” (which refers to online defamation, slander, bullying, harassment, etc.)
. Accessing the information may be in violation of the federal Stored Communications Act (SCA). To the extent that an employer requests or requires an employee’s login or password information, searches of social networking sites may implicate the SCA (18 U.S.C. § 2701) and comparable state laws which prohibit access to stored electronic communications without valid authorization. A California court recently ruled that the SCA also may protect an employee’s private information on social networking sites from discovery in civil litigation.
Managing Workplace Drug And Alcohol Testing
Workplace drug and alcohol testing is used by employers to screen applicants and test employees for illegal or unauthorized drug and alcohol use. For many U.S. employers, drug and alcohol testing has become standard practice, whether or not required by law. An effective and lawful testing program contains a number of important components that employers should consider when beginning a program, assessing a current policy or retooling an existing program to meet changing needs.
This article discusses the background of workplace testing; the reasons employers conduct testing; and the various constitutional, statutory and regulatory requirements for public and private employers in certain industries and locations. It provides HR professionals with the basic framework for administering a program and managing test results in a nondiscriminatory and legally compliant manner. It concludes with a discussion of the importance of program monitoring and assessment of benefits for measuring the return on investment.
National Institute of Justice Publishes Fingerprint Sourcebook
The Department of Justice’s National Institute of Justice (NIJ) today published The Fingerprint Sourcebook, a comprehensive examination of the science behind fingerprint identification that will serve as a definitive resource for experts in the field.
Written by more than 50 law enforcement and forensic experts worldwide, The Fingerprint Sourcebook consists of 15 chapters covering: the anatomy and physiology of friction ridge skin (the uniquely ridged skin found on the palms and soles); techniques for recording exemplars from both living and deceased subjects; the FBI’s Automated Fingerprint Identifications Systems (AFIS); latent print development, preservation and documentation; equipment and laboratory quality assurance; perceptual, cognitive and psychological factors in expert identifications; and legal issues.
Individual chapters of The Fingerprint Sourcebook were previously published online. This publication is the complete book and will be available in PDF form.
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Background Checks Taking Longer, Costing More
Randy Decker, executive director of human resources for Edmond Public Schools, said the turn-around time for background checks is taking much longer than it should and the checks are costing much more than they have in the past. Senate Bill 2199 passed in 2010 mandated that national criminal history record checks (fingerprints) on all new school employees in Oklahoma be done through the State Department of Education, the Oklahoma State Bureau of Investigation and the Federal Bureau of Investigation. In a letter sent to Oklahoma legislators, Decker said, “While we applaud the Legislature’s efforts to protect our school children, this bill negated an already existing efficient procedure for most school districts and replaced it with a cumbersome, expensive and inefficient process that does not, in its current form, protect students as well as the previous process.” ”When our background checks were done by a third-party vendor we spent between $18 to $30 for each one,” Decker said. “The processing charge is now $45 plus $10 for the fingerprinting for a processing time of four to six weeks, and a $58 processing fee can be paid for a two- to four-day turnaround.
FCRA Violations Leads to $2.6 Million Settlement In A Class Action Lawsuit
On April 19, 2011, Vitran Express Inc. agreed to a $2.6 million settlement in a class action resulting from Vitran’s alleged failure to comply with the Fair Credit Reporting Act (FCRA) when conducting applicant background checks. Specifically, the plaintiffs claimed that the company failed to abide by the notice and the risks disclosure requirements of the FCRA. The settlement exemplifies the risks associated with imprudent employer background check policies.
Civil Rights, Labor Advocates Demand End To Employment Credit Checks
A coalition of 25 civil rights and labor advocacy groups petitioned one of the nation’s largest credit-monitoring firms, TransUnion, to quit selling consumer credit information to employers. Roughly 60% of companies factor credit information into hiring decisions, according to a 2010 survey by the Society of Human Resource Management (SHRM). TransUnion is also being targeted by California Gov. Jerry Brown’s new bill, which bans most businesses in the state from using credit checks to screen potential workers, making California the seventh state to restrict the practice. The Equal Employment Opportunity Commission (EEOC) agrees with the coalition’s stance stating, “The EEOC is concerned that not hiring people with poor credit may exclude qualified job seekers and some minority groups, and therefore may be discriminatory under civil rights law,” said EEOC spokeswoman Christine Nazer. “Employers need to show that the use of credit records is job-related and consistent with business necessity,” she said.
Oklahoma Supreme Court is Considering New Rules that Would Eliminate Birth Dates and Other Identifying Information From Court Records
Richard Varn, executive director of the Coalition for Sensible Public Records Access , has worked as chief information officer for both the state of Iowa and the city of San Antonio.
Experts on identity theft and law enforcement officials who investigate the problem agree the real threat to your personal information and your bank account doesn’t come from publicly available records. The Oklahoma Supreme Court is considering new rules that would eliminate birth dates and other identifying information from court records statewide as a response to fears of identity theft. The move would make it virtually impossible to check the criminal backgrounds of those you deal with, but experts agree it won’t do much to prevent identity theft.
Database Gaps Hinder Texas Criminal Background Checks
Criminal background checks used to screen teacher applicants, doctors, nurses and daycare employees may not turn up their arrest records because of critical gaps in the Texas criminal records database, a new state audit shows. Prosecutors and courts have failed to submit to the state disposition records on about one of every four arrests in 2009, the audit found. While that is a slight improvement from a 2006 audit, it still means that the Department of Public Safety Computerized Criminal History System is not a reliable source for complete information, the audit found.
2011 Baker’s Dozen Customer Satisfaction Ratings: Employee Screening
The rankings contained within the 2011 Baker’s Dozen Customer Satisfaction Ratings Employee Screening are based on customer survey data. The indices result from a multi-step process. HRO Today identified the top employee screening providers. Our survey research team then asked providers to identify customers to be surveyed. Using the HRO Today database, we identified other buyers to survey. Each respondent was asked about services provided, scope and scale of services, and the quality and satisfaction with the services. We hope this ranking provides you some insight into your next RFP process.
1. Universal Background Screening
2. FirstPoint Background Screening Resources
3. SecurTest
4. TalentWise
5. EmployeeScreenIQ
6. General Information Services
7. Global HR Research (GHRR)
8. Employment Background Investigations
9. Corporate Screening Services
10. Orange Tree Screening
11. HR Plus
12. Verifications
13. Sterling Infosystems
No Link Seen Between Low Credit Scores and Bad Job Behavior
A soon-to-be published study by researchers at Louisiana State University, Northern Illinois University and Texas Tech University finds no connection between poor credit scores and bad behavior on the job. The findings are of interest because many companies conduct credit checks on potential new hires as part of the employment screening process. Yet the validity of using an applicant’s credit history as a measure of future job performance has been largely unexamined.
The study will be published in The Journal of Applied Psychology and is currently available online. It used personality data collected from 142 employees and performance data provided by supervisors. The researchers then asked the employees to obtain their credit scores from FICO. Limitations include the relatively small size of the study.
Jeremy Bernerth, assistant professor at LSU’s business school and a lead author of the study, said the findings showed that poor credit scores weren’t related to an employee’s propensity, say, to steal from an employer or engage in other “deviant” behavior.
Recidivism, Re-Entry Policy and Facts
Sexual predation is back in the national spotlight since Jerry Sandusky, the former Penn State defense coordinator who’s accused of sexually assaulting eight boys over 15 years, and two top university officials have been charged covering up the abuse.
There are nearly 740,000 registered sex offenders in the United States. The percentages rearrested (but not necessarily guilty) for the “same category of offense” for which they were most recently in prison for were: 13.4% of released robbers 22.0% of released assaulters 23.4% of released burglars 33.9% of released larcenists 19.0% of released defrauders 41.2% of released drug offenders 2.5% of released rapists
Contrary to popular belief, as a group, sex offenders have the lowest rate of recidivism of all the crime categories. These statistics completely fly in the face of conventional wisdom about sex offenders being the most likely group of criminals to re-offend for their initial crime, but these are the facts.
Independent studies of the effectiveness of in-prison treatment programs for sex offenders have shown that evidence-based programs can reduce recidivism by up to 15 percent and can be further reduced up to 30 percent with after prison intervention. However, our current policies make no sense; we release many offenders to the public without some form of post-release supervision.
“Effective strategies to deal with sex offenders [should] not be based on anecdote, emotion, or case examples of just one; they [should be] based on facts and what we know about the issue. At times we hear about a high profile event; but it is important to remember that high profile events are high profile precisely because they are unusual and unlikely. Making policy based on high profile events is a surefire way to overreact and make inefficient and, worse, ineffective policy.
Electronic Security Association Supports Background Check Law The Electronic Security Association (ESA) is asking its members to take an active role in making the industry safer by supporting background check legislation. Traditionally, the government has allowed various industries – including banks, credit unions and private security firms – access to utilize the FBI’s database for criminal background checks of potential employees. But electronic security companies are not afforded that same level of access.
That’s why ESA has endorsed S. 1319, the “Electronic Life Safety and Security Systems Federal Background Check Act,” which was introduced in the U.S. Senate on June 30 by Sen. Chuck Schumer (D-NY). The bill would permit industry companies to access the FBI database for hiring purposes, and also would direct the Attorney General to work with ESA to establish a nationwide system of criminal background checks for employers and employees at electronic security industry companies. ESA Government Relations Director John Chwat says what is needed now is contact from ESA members and other industry professionals to their Senators.
Obama Administration Extends Crackdown on Illegal Hires
The Obama administration has extended its crackdown on employers of illegal immigrants, notifying 500 companies across the nation in recent weeks that the government will inspect their hiring records. The audits of employee records by Immigration and Customs Enforcement (ICE)can result in civil and criminal penalties and can lead firms to lose large numbers of employees, face lower productivity and steep legal fees. Since January 2009, ICE has audited almost 6,000 employers suspected of hiring illegal labor and imposed more than $72 million in sanctions. According to the Pew Hispanic Center, approximately $11 million illegal immigrants currently live in the U.S., with roughly two-thirds of them employed. The Obama administration has made employers the focus of its efforts to curb illegal immigration.
EEOC Cautions Employers On Using Social Media In Hiring Decisions
Employers need to set guidelines for their HR staff on the use of social media in the hiring process. The guidelines should make clear that recruiters should not search online for information that they could not seek on an application or in an interview, such as race, age, religion, disability, union support, and any other class or activity protected by law. Since online searches may inevitably produce such information, guidelines and procedures that exclude such information from the decision-making process should be put in place. Employers may want to consider delaying such screenings to the post-offer stage.
Chart of Credit Legislation Introduced in US States in 2011
To date, 58 bills in 28 states and the District of Columbia were introduced or pending in the 2011 legislative session. The total number of states that limit employers’ use of credit information in employment is now seven.
Many in U.S. Are Arrested by Age 23, Study Finds
A new study found that almost a third of Americans have been arrested for a crime by age 23.The study, the first since the 1960s to examine the arrest histories of a national sample of adolescents and young adults over time, found that 30.2 percent of the 23-year-olds who participated reported having been arrested for an offense other than a minor traffic violation; nearly a 10 percent increase from the 1965 study. Researchers say their results reflect growing exposure to the criminal justice system in everyday life and may be attributed to the justice system’s increased aggression in reach and zero-tolerance policies in schools during the last 50 years. ”This estimate provides a real sense that the proportion of people who have criminal history records is sizable and perhaps much larger than most people would expect,” said Shawn Bushway, a criminologist at the State University at Albany and a co-author of the study. The researches hope their study can alert physicians to signs that their young patients are at risk.
Sandusky Denied Coaching Job in 2010 After Background Check
A year and a half after an investigation began into Jerry Sandusky’s contact with young boys, the former Penn State assistant football coach applied for a volunteer coaching job at a central Pennsylvania college but was denied the job after a background check. Officials at Juniata College said that Sandusky applied for the volunteer football coaching job in May 2010 and was rejected the following month after a background check showed a high school where Sandusky previously volunteered was investigating him. Juniata spokesman, John Wall, said the college was not informed of the details of the investigation or the existence of a grand jury, but based on the report, informed its coaches Sandusky was not to have contact with the program.” We basically did our due-diligence,” Wall said.
Sandusky is charged with 40 counts of child sex abuse involving eight young boys. The information that Sandusky was still pursuing coaching opportunities amid an investigation into his activities comes as his attorney and prosecutors prepare for a preliminary hearing where several of his alleged victims could testify. Sandusky has denied being a pedophile and has vowed to fight the case.
Pepsi Settles EEOC Charges of Racial Bias in Screenings for $3M
Pepsi Beverages, formerly known as Pepsi Bottling Group, has agreed to pay $3.1 million, develop a new background check policy and provide job offers and training to resolve a race discrimination charge filed against them for violating Title VII of the Civil Rights Act of 1964. An investigation by the Equal Employment Opportunity Commission (EEOC) revealed that more than 300 blacks were adversely affected when Pepsi applied a criminal background check that disproportionately excluded black applicants from permanent employment. Under Pepsi’s former policy, job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense. The EEOC also said Pepsi’s former policy had denied employment to job applicants who had been arrested or convicted of certain minor offenses. The EEOC advises employers to take more factors into consideration before completely excluding applicants, such as the nature and gravity of the offense and the time that has passed since conviction, etc.
Staffing Firm Settles Lawsuit Filed by Amazon Applicant
Integrity Staffing Solutions (ISS) has settled a discrimination lawsuit brought by an African-American man convicted of manslaughter almost 30 years ago, after ISS denied him a job at Amazon.com because of his criminal record. ISS was accused of violating the federal Civil Rights Act. Jennifer Clarke, Executive Director of the Public Interest Law Center of Philadelphia says, “Employment policies that impose a blanket exclusion on people with past convictions, without any consideration of the relationship of the conviction to the job in question, can constitute unlawful discrimination.” The Public Interest Law Center says ISS “has reaffirmed its policy of providing equal employment opportunity for people with past criminal convictions” and “also has further re-emphasized to supervisors and personnel engaged in the hiring process the importance of and appropriate review of a job applicant’s criminal convictions.”
Best Practices for Conducting Criminal Background Checks
The National Employment Law Project (NELP) has created the guide, Criminal Background Checks: A Best Practices Guide for Employers to help HR departments save time and money and create a larger pool of qualified candidates. NELP advises employers to: carefully survey positions to determine which require a background check to avoid unnecessary costs; do not inquire into criminal history on the initial application; include notice on your job application that a conviction is not an automatic bar to employment; do not ask about or consider arrest records; comply with the Fair Credit Reporting Act requirements by providing notice and obtaining worker consent, giving the applicant a copy of the background report prior to any rejection and allowing the applicant to correct information; only consider convictions that are both job-related and recent; consider the circumstances of the offense and any evidence of rehabilitation; give the applicant a written notice of the potentially disqualifying conviction(s) and allow the applicant to provide information regarding the offense(s), including evidence of rehabilitation.
Feds Consider Taking Ex-Offenders Out of the Box
With nearly 1 in 4 adults in the U.S. having a criminal record, there is a call by civil rights organizations, politicians and some employers to change Equal Employment Opportunity Commission (EEOC) guidelines to “ban the box”- the portion on a job application asking candidates to reveal details of their criminal history during the application process. While ban-the-box laws have not yet been decided on a federal level, some states are independently changing their guidelines. According to the New Haven Prison Reentry Initiative, Connecticut in June 2010 became the fourth state after Minnesota, New Mexico and Hawaii to enact ban-the-box laws for state jobs. The laws allow employers to ask about criminal history once they’re face to face with applicants and do not prohibit background checks. However, ban-the-box supporters say eliminating the question on applications gives job candidates an opportunity to get an interview and explain their past. Advocates hope to create a level playing field, which in turn can broaden an employer’s pool of qualified job candidates.
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When Background Checks Aren’t Enough
Despite paying a top-notch company to conduct a thorough background check, a Florida based security company is shocked to learn that their recently hired door-to-door sales rep stands charged with raping and attempting to murder a potential customer in her home, while on duty. SecureWatch, an ADT authorized dealer, based their hiring decision for the offending sales rep on his background check, which revealed no criminal record. ”There was nothing. The guy was as clean as a whistle,” Paul Victor, company COO said. “Then it turned out because of the level of access we had in our commercial background search, we didn’t see until I read in the paper that he had some juvenile offenses.” Because background-check companies don’t always have access to all criminal databases, the Electronic Security Association is urging the passage of federal legislation that would allow electronic security companies to search the FBI’s database to determine whether job applicants have a criminal record.
A Tribute to Merchants Information Solutions for Achieving 100 Years in Business
Merchants Information Solutions, Inc., a Phoenix-based company that provides services such as employment, tenant-background screening and protection against identification theft turned 100 on Wednesday, February 14, 2012. The company started the day after Arizona became a state in 1912 as the Merchants & Manufacturers’ Association and has gone through several changes in names and focus.
Merchants created the ID Theft Advisory Board with Avnet, Inc., Go Daddy, the FBI and other organizations in 2010. Last year, it was among the first companies to receive accreditation through the NAPBS.
Liars Index® Rises To Another Record Level, Lyin’ King For 2011 Chosen
The Liars Index®, both for the second half of 2011 and the Index’s two-year running average, has reached new records,” said Jude Werra, President of the executive search and selection firm Jude M. Werra & Associates.
The Liars Index® has been calculated semi-annually for nearly twenty years,
Our Latest Data:
| Data Point |
1st Half 2008 |
2nd Half 2008
|
1st Half 2009
|
2nd Half 2009
|
1st Half 2010
|
2nd Half 2010
|
1st Half 2011
|
2nd Half 2011 |
| Semi-annualPercentage |
15.91% |
11.43% |
15.87% |
16.07% |
21.43% |
17.46% |
21.05% |
27.27% |
| Prior Two YearAverage |
14.25% |
13.21% |
13.39% |
14.82% |
16.20% |
17.71% |
19.00% |
21.80% |
Printed with permission of Jude M. Werra
A Scientifically Proven Assessment Test Is The Missing Link To Red Flag Child Sexual Abusers
Don Dymer, CEO, SingleSource Services, a founding member of the NAPBS and a member of Concerned CRAs believes after years of careful searching, he has found the assessment tool that works in helping to identify child sexual abusers. It is called the Diana Screen®. A test that to a high scientific degree of accuracy alerts you that this is not a person who should be placed in a position of trust with children and youth. The test meets the goal: “To select the best possible people for staff and volunteer positions and to screen out individuals who have sexually abused youth or are at risk to abuse,” as set by The Centers for Disease Control and Prevention.
Don Dymer and SingleSource Services are taking this assessment tool to the background screening industry and is urging them to take it to their clients. “The goal is to make our industry peers aware that this established, yet mainly unknown screen needs to be part of their background screening programs in order to weed out those who pose a sexual threat to children and seek access to them through employment or as volunteers.” Don explains that research tells us that less than one-tenth of 1% of child sexual offenders will have a criminal record of sexual abuse and consequently, strictly relying on finger printing, criminal background checks and drug testing won’t give you the whole story to keep sexual abusers away from children.
In Million-Dollar Theft Case, Church Worker with a Secret Past
An employee of the Roman Catholic Archdiocese of New York has been arrested and charged with embezzling over $1 million from the organization over a seven-year period. Prosecutors say that 67-year-old Anita Collins used her job in the accounts payable department to write nearly 470 checks from the archdiocese for personal expenses. Joseph Zwilling, a spokesman for the archdiocese, said Collins was confronted about the missing money in December after an annual audit raised red flags. When Collins was hired in 2003, no criminal background check was conducted, which would have revealed her past of a grand larceny conviction and a guilty plead to a misdemeanor. In fact, unbeknownst to the archdiocese, Collins was still on probation when she began working. Following the discovery of the alleged theft, the Archdiocese of New York has begun performing additional reviews of financial procedures and oversight. Collins, who has confessed to stealing the money, faces as much as 25 years in prison if convicted on the charge of first-degree grand larceny.
School Fire Private Security Firm with Convicted Felons as Guards
Penn State-Shenango in Mercer County has fired a private security company after discovering that some guards were convicted felons and sex offenders. Three other local public school districts, Reynolds School District in Mercer County, Grove City Area School System and the Moniteau School District in Butler County will also end it’s contract with Pond Security. Kelly Sieber, Pond’s executive director, says the company is requiring new background checks of all its employees and stricter hiring practices to make sure all employees are legally permitted to work for them and be placed in schools.
White House Announces New Privacy Framework Including Consumer Privacy Bill of Rights
The White House has released its long-awaited Privacy ” White Paper ” that outlines the Obama Administration’s proposal for a new American privacy framework. The more than year-long process that culminated in today’s release of the White Paper began in December 2010 when the Department of Commerce’s Internet Policy Task Force released a “Green Paper” entitled: Commercial Data Privacy and Innovation in the Internet Economy: A Dynamic Policy Framework.
Though Not Yet Banned, Requiring Social Media Information Is a Bad Idea
Employers continue to wrestle with the issue of whether to require employees and prospective employees to divulge their social media passwords. Some critics of the practice, including Owen Kerr of George Washington University Law School, have asserted that surrendering a Facebook password is like handing over a key to a home.
So far, few courts have issued decisions that provide any guidance about the legality of seeking social media login information from employees or prospective employees. In Pietrylo v. Hillstone Restaurant Group, 2009 U.S. Dist. LEXIS 88702 (D.N.J. Sept. 25, 2009), a federal trial court case in New Jersey, the plaintiffs were restaurant employees who belonged to a chat group. Access to that group required an invitation and then a member’s MySpace account and password. One of the restaurant’s managers asked another restaurant employee for her login information for the chat group, which the employee provided. The plaintiffs brought a civil suit against the restaurant, claiming (among other things) that the managers had violated the Stored Communications Act (SCA). The jury found in favor of the plaintiffs and awarded them, collectively, $3,403 in compensatory and punitive damages.
California, Illinois, Maryland and New Jersey have active legislative efforts to regulate employers’ collection and use of login information regarding social media sites and federal law may follow. In the meantime, however, the practice currently is not prohibited. Even so, employers should refrain from doing so.
Prisoner Reentry, Employment, Signaling, and the Better Identification of Desisters
Prisoner reentry remains one of the most critical social problems confronting America, one that brings with it many social and economic costs. The mass incarceration that has occurred in recent decades has resulted in 1.6 million individuals currently in state and federal prisons with approximately 730,000 inmates released annually. More than two thirds will be re-arrested within 3 years of release. The fact that ex-prisoners face challenges upon release, which contribute to these adverse outcomes, creates substantial cause for concern for the well being of these individuals and for the communities to which they return. Policy makers and researchers have responded to the problem through a plethora of new policies and programs and an increasingly large body of research on prisoner re-entry. Successful efforts to promote large-scale improvements in prisoner re-entry require more information about effective programs and policies, but such efforts depend heavily on accurate information about the factors that give rise to the types of successful re-entry experiences that benefit ex-prisoners and, in turn, society.
Details on FTC Recommendation of Legislation to Address Practices of Information Brokers
On March 26, 2012 the Federal Trade Commission (FTC) issued its report, ” Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers .” In a previous blog post we provided an overview of the report and noted that one of the five “action items” highlighted by the FTC in the report is to focus on the practices of information brokers and “data brokers.” Most notably, the FTC calls on Congress to consider enacting targeted legislation to provide greater transparency for, and control over, the practices of information brokers and to allow consumers to access their data maintained by information brokers. The FTC notes in the report that Congress could model any such legislation on H.R. 2221 (the “Data Accountability and Trust Act”) , a bill that the House passed during the 111th Congress, as well as similar bills introduced in the 112th Congress.
Felonbook.Com Gives Criminals A Social Network Of Their Own
Americans with criminal records now have their own online community – felonbook.com. Mr. X (con), the sites’ anonymous creator, had the idea for felonbook while serving a federal prison term. He looks “to give personal power back to those with a criminal history” by encouraging users to think about how to better their situation and change “the system.” “This is done when an individual member of the community creates a Group, gives details about something he or she would like to change, and then through discussions ‘sell’ their plan to the Group. Game Changer plans, if approved by the Community can get financial support.
Facebook, Lawmakers Warn Employers Not to Demand Passwords
Facebook and lawmakers have warned employers against requesting Facebook passwords while screening job applicants, a controversial practice that underscores the blurring distinction between personal and professional lives in the era of social media. The practice has reportedly grown more commonplace as companies increasingly regard profiles – or embarrassing photos from wild nights out – as windows into a prospective employee’s character. In some cases, job applicants were asked to browse through their Facebook accounts with an interviewer present. Facebook Inc’s Chief Privacy Officer, Erin Egan, says the social networking company could “initiate legal action” against employers that demand Facebook passwords. Democratic Sens. Chuck Schumer of New York and Richard Blumenthal of Connecticut are asking Attorney General Eric Holder to investigate whether employers asking for Facebook passwords during job interviews are violating federal law, and lawmakers in several states say they are willing to introduce bills to prohibit this behavior. Opponents also warn employers they may be setting themselves up for legal issues regarding invasion of privacy and discrimination. “Employers have legitimate questions about a person’s job performance, but they can get that information the regular way, without cutting corners and violating people’s privacy,” said Leland Yee, a California state senator.
Workforce Magazine Releases 2012 Background Screening ‘Hot List’
Based on the number of individuals screened in the most recent 12 months the top ranked background screening firms were:
| 1. LexisNexis | 5. Accurate Background |
| 2. HireRight | 6. HR Plus |
| 3. Sterling | 7. ADP |
| 4. Intellicorp Records | 8. Employment Background Investigations |
Read more (Registration required)
Human Resources Outsourcing Industry Insight
HighBank releases their first quarter Human Resources Outsourcing (“HRO”) Industry Insight. We anticipate increased utilization of SaaS and cloud based HRO services. Additionally, we believe M&A activity will accelerate in 2012 and 2013 as large, multinational HRO providers continue to build scale, expand their geographic capabilities and enhance product depth. The report also contains our recently issued views on the global economy and its anticipated impact on the HRO industry.
Obama Targets Diploma Mills That Market To Vets
The Obama administration wants to trademark the term “GI Bill” in an effort to shield veterans and military families being swindled or misled by schools that target their federal education benefits. President Barack Obama signed a wide-ranging order that partially addresses growing complaints about fraudulent marketing and recruiting practices aimed at military families eligible for federal education loans under the GI Bill. The executive order mandates several new education protections for military service members. There is little the federal government can do to shut down diploma mills, but the new protections would make it harder for post-secondary and technical schools to misrepresent themselves to military students. Obama’s order will also set a new gauge that potential students can use to calculate how much a school will really cost in tuition and fees called “Know Before You Owe” system.
The main target of the White House action is for-profit colleges and universities that market heavily to military families because of the easy availability of federal loan money under the GI Bill. Federal money, most of it through the financial aid students receive, accounts for up to 90 percent of for-profit colleges’ revenue — even more if veterans attend the school on the GI Bill. Some post-secondary schools target current and former military service members using deceptive military-themed websites that appear to be government-run or connected to the GI Bill benefit system, administration officials said.
The Old L-1 Morphs into MorphoTrust
L-1 Identity Solutions, acquired last year by international conglomerate Safran, has been reorganized and reintroduced as U.S.-focused MorphoTrust. MorphoTrust CEO Bob Eckel, said the company expects to have $400 million in revenue this year and has more than 1,100 employees. Since the Safran deal was finalized last August, Eckel has been busy with a major reorganization. While the capabilities of MorphoTrust are essentially the same as L-1, MorphoTrust has now integrated functions across the company. In addition, MorphoTrust is comprised of three business units that provide solutions to customers: Services, ID Solutions, and Enterprise Solutions. MorphoTrust “focuses on identity management, credentialing, service centers, biometric and enterprise solutions,” Eckel said. The service centers provide a range of identity-related services for state and federal agencies and commercial entities as well. Those services include fingerprinting and background checks, passport photos, and child ID kits.
5 Takeaways From The EEOC’s New Guidance On Use Of Criminal Records
The U.S. Equal Employment Opportunity Commission (EEOC) has revised its long-standing guidance to employers on how to properly evaluate job applicants’ criminal histories in pre-employment screening. The revised guidelines provide more clarification and detail on the standards that have existed since 1987. They also make recommendations on how employers can avoid EEOC scrutiny when they’re considering job seekers with previous arrests and convictions.
You can read a full press release on the updated Enforcement Guidance here. The press release includes a link to questions and answers about the EEOC’s Enforcement Guidance.
81% of IT Professionals Believe Thorough Screening Processes Improve Chances for a Great Candidate / Employer Match
TEKsystems®, a leading provider of IT staffing solutions, IT talent management expertise and IT services, report from its quarterly IT Professional Perspectives Survey (ITPPS)that organizations need to have a comprehensive screening process. In fact, 81% of IT professionals agree that the more thorough the process, the greater the chance the candidate and employer will be a quality match. In addition, four out of 10 IT professionals say it is common for IT professionals to get positions for which they are unqualified. The ITPPS also revealed that only 50% of staffing firms perform face-to-face interviews prior to submitting candidates to employers, even though 94% agree this is the best way to qualify candidates.
“Making a great match between talent and opportunity doesn’t just happen. To make successful placements, organizations must perform two critical tasks: validate the candidates’ qualifications for the job and allow the candidate to confirm the job’s employee value proposition is right for them,” said TEKsystems Director, Rachel Russell. “These tasks take time and dedication — but it’s a cost that’s worthwhile considering that a quarter of employers say the average cost of a poor hire is estimated to be more than $50,000.”
Getting Beyond “Name, Rank, and Serial Number”- Nebraska Passes Job Reference Immunity Law
Add Nebraska to the growing number of states that have granted civil immunity to employers that provide job references to prospective employers of their current or former employees. Approved by Nebraska Governor Dave Heineman, the law, LB 959, will take effect on July 18, 2012. The new law authorizes employers in Nebraska to disclose, with the employee’s written consent: Dates and duration of employment; Final pay rate and wage history; Job description and duties; Attendance information; Drug and alcohol testing results within one year prior to the date of the reference request; etc. Prospective employers wishing to take advantage of the new law will need to revise their application forms. Immunity will not apply where it can be shown that the employer has discriminated or retaliated against the current or former employee. Therefore, employers should be cautious to ensure that information provided as a reference does not appear to be motivated by discrimination or retaliation against an employee who has exercised his or her state or federal statutory rights.
Use of Credit Information in Employment 2012 Legislation
To date, 39 bills in 20 states and the District of Columbia have been introduced or are pending in the 2012 legislative session. Out of the total 39 bills, 38 address restrictions on the use of credit information in employment decisions. The total number of states that limit employers’ use of credit information in employment is now seven: California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington.
Illinois’ New Social Media Password Law Raises Substantial and Unjustified Obstacles to Employers’ Legitimate Business Activities
With last week’s approval by Illinois’ Senate of a House bill entitled, “The Right to Privacy in the Workplace Act,” Illinois (assuming the Governor signs the bill) will soon become the second state, joining Maryland, to forbid employers from requesting or requiring log-in credentials for an applicant’s or employee’s social networking site. This bill, like Maryland’s law, raises significant interpretative challenges for employers while imposing unjustified and overbroad restrictions on their ability to run their own business.
Yahoo’s CEO Steps Down Amid ‘Resumegate’; Board Reshuffles
Yahoo’s chief executive, Scott Thompson, has stepped down and “left the company” after four months on the job. Whether Thompson left on his own accord or was pushed remains unclear. It began when Dan Loeb, founder of Third Point, which has a 5.8 percent stake in Yahoo, wanted more seats on Yahoo’s board. When Yahoo refused, Loeb fired back with allegations that Thompson had not been awarded a computer science degree at Stonehill College as was claimed on his Yahoo biography. Thompson did earn an accounting degree from Stonehill, a Catholic school near Boston, however he did not earn a computer science degree. Yahoo is calling it an “inadvertent error.” The erroneous biography was made only more suspicious after it was ported from eBay pages while he was at the company. Despite having ample opportunities to correct the mistakes, even when interviewed in person, Thompson failed to do so. Yahoo pulled the biography from its website within hours of Loeb’s allegations, but it didn’t escape SEC filings.
House Clears EEOC Appropriations Bill With Several Limiting Amendments
On Thursday, May 10, 2012, the House of Representatives approved 247-163 a fiscal year 2013 funding bill (H.R. 5326) for a variety of federal agencies, including the Equal Employment Opportunity Commission (EEOC), that includes a series of amendments that would curtail enforcement of certain labor- and employment-related regulations and programs. Last month the House Appropriations Committee approved by voice vote an amendment that would prohibit the use of any of the bill’s funds from being used by the EEOC or Department of Justice (DOJ) to:
sue any state on behalf of the National Labor Relations Board pertaining to secret ballot union elections implement, administer, or enforce the new EEOC Enforcement Guidance: Consideration of Arrest and Conviction Records in Employment Decisions
The Senate Appropriates Committee approved its own bill funding the EEOC last month. Once the full Senate passes a final appropriations bill, it will need to be reconciled with the House version.
The Littler Report Criminal Background Checks: Evolution of the EEOC’s Updated Guidance and Implications for the Employer Community
I am sure by now you have seen the numerous legal journals, websites and blogs that are full of articles on the newly announced EEOC Updated Guidance on use of criminal records checks for employment decisions. One of the best and most complete explanation is in The LITTLER REPORT written by attorneys from the renown Littler Mendelson, P.C. Law firm.
Seven “Non-Negotiables” to Prevent a Bad Hire
A recent survey by Career Builder reports that more than two-thirds of employers were affected by a bad hire last year. Of nearly 2,700 employers surveyed, 41% estimate a single bad hire cost $25,000; a quarter estimate a bad choice cost $50,000 or more – not to mention the demoralizing effect of the issue on other employees and on the new hire. To avoid bad hires, one company uses an unconventional hiring strategy, which gives more weight to seven personal characteristics rather than relevant skills and experience. These characteristics are: respect, belief, loyalty, commitment, trust, courage and gratitude. Ideal hires bring traditional and job-specific capabilities and high proficiencies in these seven core traits. First, the company asks potential candidates to tell them about situations where they have exemplified each of the non-negotiable traits. They also ask the same questions of the individual’s references – not the references they list on their resume, but of their former co-workers, associates and bosses that they identify independently. As a result, the company has built an extremely loyal, talented and well-rounded base of employees.
Audit: Half of Inmates Back to Prison in 5 Years
About half of New Mexico’s paroled inmates return to prison within five years, according to a legislative audit. By reducing inmate recidivism, the state can save money on corrections and slow a growing prison population. If nothing is done, New Mexico will run out of prison space within in the next decade and will have to consider building a new prison or expanding existing ones. Significant budget cuts to successful court-supervised drug treatment programs, which are intended to help keep offenders out of prison, has contributed to the problem. Legislative auditors said the Corrections Department could reduce recidivism by focusing on programs with a proven success record, such as drug treatment, vocational and adult education courses and correctional industries that offer inmates a chance to work. The report faulted the prison system for not targeting treatment based on inmate needs or risks.
EEOC Questions is That Diploma Really Necessary?
A recent EEOC discussion letter opines that adopting education requirements for jobs may screen out certain applicants, and that employers shouldn’t apply the standard unless they can show that the requirement is job-related. “The EEOC has taken a particular interest in hiring criteria, from credit checks to arrest and criminal records to education requirements,” said David James, shareholder and chair of the labor and employment practice group of the Nilan Johnson Lewis law firm. “The EEOC views such screening tools as having a disparate impact on minority applicants and other protected classes, and hopes to reduce or even eliminate the use of these criteria.” The letter states employers shouldn’t list a high-school diploma as a job requirement if the job functions could be performed by individuals without one. Removal of such requirements may aid individuals without high-school diplomas, but it may have the opposite effect on other would-be employees who are already struggling to find jobs. While including education requirements in job listings isn’t likely to become illegal, HR professionals may want to rethink asking about candidates’ educational backgrounds.
Background Screening Industry Denounces NCLC Study as Inaccurate and Inflammatory
The National Association of Professional Background Screeners (NAPBS) announces information from a recent study of background screening companies affirming the accuracy of background checks, refuting a report recently issued by the National Consumer Law Center (NCLC). The study found that 98% of background screening providers surveyed encounter consumer disputes less than 5% of the time out of millions of applicants screened annually. Of the small number of reports that are disputed by a consumer, more than 95% are ultimately found to be accurate. The NAPBS study responds to the recent report released by NCLC regarding the accuracy of background checks, which accuses background screening providers of “routinely making mistakes”. NAPBS refutes the report as inaccurate and inflammatory and points to the fact that the NCLC fails to offer any empirical data to back up its findings.
Retail Industry Update – June 2012: Using Conviction Records as a Screening Tool
Many retailers believe that the best means of preventing internal theft is to hire honest employees who do not steal. Common sense dictates that applicants who have been convicted of crimes are less likely to be honest and more likely to steal. Even though this practice is facially race neutral, the resulting “adverse impact” makes the practice unlawful under Title VII – unless the employer can prove the practice is job related and “consistent with business necessity.” The U.S. Equal Employment Opportunity Commission (EEOC) recently issued updated guidance on the use of criminal background checks in employment. The guidance suggests employers should individually analyze each hiring decision based on an individual’s criminal history. In the meantime, employers must decide whether the risks of lawsuits and defending a common sense understanding of human behavior is outweighed by the risks of increased theft from hiring more convicted criminals.
U.S. Consumer Watchdog to Oversee Credit Bureaus
The Consumer Financial Protection Bureau (CFPB) announced that it will soon begin supervising the leading credit bureaus, the companies that collect financial details of everyone’s life. Until now, credit-reporting companies have lacked a single federal overseer. Credit reports have increasing importance in consumers’ lives because they are used in many kinds of lending, by landlords in renting a property and even as a way to screen job applicants. Additionally, various reports have found that up to 25% of credit reports contain errors that could hurt consumers’ ability to borrow. CFPB Director, Richard Cordray said areas of concern for the CFPB include: the information sent to credit bureaus, the ways they assemble and hold information, and “how difficult it is to get the errors resolved” when consumers identify them. The supervision of credit reporting agencies will start Sept. 30, and the bureau will begin on-site examinations after that.
SHRM Survey Findings: Background Checking-The Use of Criminal Background Checks in Hiring Decisions
. Sixty-nine percent of organizations reported that they conduct criminal background checks on all of their job candidates. Eighteen percent of organizations conduct criminal checks on select job candidates, and 14% do not conduct criminal checks on any job candidates.
. Among organizations that conduct criminal background checks, most initiate criminal background checks after a contingent job offer (62%) or after the job interview (32%). Very few organizations (4%) initiate criminal background checks before a job interview.
. Organizations conduct criminal checks on job candidates 1) to reduce legal liability for negligent hiring (52%) and 2) to ensure a safe work environment for employees (49%).
. The top two criminal activities that are very influential in the decision not to hire a job candidate are a convicted violent felony (96%) and a convicted nonviolent felony (74%).
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Background Check Error Leaves Worker “Humiliated”
Modern technology makes it possible to instantly search billions of public records stored all over the world, which has spawned an entire industry dedicated to screening job applicants for employers. However, when they make a mistake, the consequences can be devastating. Attorney Jeff Hynes says he has seen a steep rise in complaints about mistakes in criminal background checks. “It’s not only a growing problem, but it is a gross injustice,” said Hynes. A common misconception about criminal background checks is that personal identifying information such
as a social security number is being used to find information on an individual. Yet, most employers don’t even provide background screening companies with the race or sex of an applicant. Instead they rely on name and date of birth alone, which increases the chance of error. When an error takes place, it’s the applicant who’s left with the burden of proving he or she is not a criminal. Hynes encourages job applicants to do their own criminal background check in advance and suggests telling a potential employer upfront about any potential problems.
State Destroying Online Court Records, Raising Debate Over Privacy, Consistency
Pennsylvania has removed millions of public records from a state court system website. State officials say they are treating the electronic copies like paper ones, which are destroyed after a certain period of time. Records of serious crimes are still kept for decades. Edward Spreha, a Harrisburg-based defense attorney, said the change would make it harder to find criminal and civil court records; searches that once took moments could potentially take weeks. Steve Schell, a spokesman for the Administrative Office of Pennsylvania Courts (AOPC), said the core issues are consistency and privacy. Schell also said the paper record in such cases is the official copy and removing the electronic copies after paper originals have been destroyed is consistent with state Supreme Court guidelines. The new policy will not affect the results of criminal background checks, which are conducted by State Police. Common Pleas or appellate courts records will be kept indefinitely.
“As a public access advocate, you can’t change history,” said Melissa Melewsky, a lawyer for the Pennsylvania Newspaper Association. “This is a step in the opposite direction, because we’re getting less access.”
To ‘Minimize Risk,’ Penn State Expands Background Check Policy Following the conviction of former assistant football coach Jerry Sandusky on child sexual abuse charges, Penn State University has announced a plan to expand criminal background check requirements for all new and some current employees. The new policy, which reflects best practices, is meant to ensure that the criminal histories and potential sexual abuse records of future employees will be thoroughly reviewed before hiring. The new policy requires background checks for all current employees considered to be in “sensitive/critical” positions, which include those with responsibility for protecting personal data, those with master key access to all buildings and those with responsibility for controlled substances or hazardous materials. This move follows a June announcement by Penn State of a new sexual abuse reporting policy that requires all university employees to complete annual reporter training, and calls for disciplinary action, up to and including dismissal, to be taken against any employee that willfully fails to report a suspected case of child abuse.
U.S. To Participate in APEC’s Cross Border Privacy Rules System
Acting U.S. Commerce Secretary Rebecca Blank today announced the United States’ participation in the Asia-Pacific Economic Cooperation’s (APEC) Cross Border Privacy Rules (CBPR) system. This voluntary system promotes a baseline set of data privacy practices for companies doing business in participating APEC economies. The goal of the system is to enhance electronic commerce, facilitate trade and economic growth, and strengthen consumer privacy protections across the Asia Pacific region.
“U.S. participation in APEC’s Cross Border Privacy Rules system is a significant milestone in international data protection and is an important step in the implementation of the global privacy strategy outlined in the Obama administration’s February 2012 Data Privacy Blueprint,” said Acting Secretary Rebecca Blank. “This system will enable participating companies in the United States and other APEC member economies to more efficiently exchange data in a secure manner and will enhance consumer data privacy by establishing a consistent level of protection and accountability in the APEC region.
Liars Index® Retreats in First Half of 2012
The Liars Index®, which tracks false education claims on resumes, was at an all time high in the back half of 2011, reaching a record 27.27%. For the first half of 2012, the degree of degree lying moderated to 20.69%, but the moving average of the prior two years held relatively steady, at 21.62%, vs. the 21.80% level of six months ago.
Reprinted with permission of Jude Werra, Jude M. Werra & Associates, Brookfield, WI
Ban the Box” and Pre-Employment Criminal Records Checks – An In-Depth Look
Representative Hansen Clarke has proposed HR 6220, to prohibit an employer from inquiring whether an applicant for employment has been convicted of a criminal offense, except in certain circumstances. Referred to as the “Ban the Box Act”, this bill is of similar intent to “Second Chance” legislation previously offered by lawmakers in recent years. ISPLA has reviewed this 13-page bill which seeks to eliminate questions on job applications regarding whether an applicant might have a criminal conviction record and to only allow a criminal a criminal background check to be undertaken after a conditional offer of employment has been made to the applicant contingent on such records check being clear. It is the bill sponsor’s position that those who have served their time and paid their debt to society are worthy of consideration for employment for jobs in which the public would not be harmed by their presence or work.
Vetting at the Top
Human resource executives and experts say double- and even triple-checking a C-suite job candidate’s resume, references and educational background isn’t just a way to spare the company from future embarrassment; it also offers career protection to the candidate who might be able to correct a resume error before it becomes an indelible stain on his record. Inside candidates as well as outside hires should be psychologically assessed and past co-workers should be mined better for information. Too often, job-seekers for top-level, highly visible posts are actually vetted with less stringency than lower-level hires, even in an age when the Internet can both magnify errors and increase the opportunities for puffery and fraud. Experts recommend having a standardized procedure in place, which requires background checks and uses skilled and impartial third-party firms to undertake that effort, but with the human-resource department involved and in charge throughout.
Could a National Registry Save Hospitals from Hiring Problem Workers?
As officials continue to investigate the hepatitis C outbreak, some outraged citizens and healthcare organizations are calling for a national registry that would require hospitals and staffing agencies to report professional misconduct by medical technicians, as well using confidential, third-party reference checks. State and hospital investigations into the work history and conduct of David Kwiatkowski, a traveling lab technician and alleged infector who caused the hepatitis C outbreak at New Hampshire’s Exeter Hospital, bring up questions into oversight responsibilities. Exeter believer providers and lawmakers should consider a mandatory reference disclosure process for healthcare providers to report problems with former employees, establish legislative protection for hospitals to share information that relates to criminal activity or threats to patient safety, and the possibility of a national registry that tracks problems of all healthcare workers similar to reporting systems for physician and nurses.
How to Gather Social Media Evidence
With so much information being exchanged and shared online, it makes sense to see social media as a rich source of material for both plaintiffs and defendants to use in investigations. However, social media evidence has to be gathered in a way that will hold up in court. So far there are relatively few standardized methods for gathering evidence from social media sites. Collecting evidence from social media sites can be challenging because it is constantly changing, and users can easily update and delete material that could be evidence in a case. But, once a user is aware of an ongoing investigation, he or she is under an obligation to preserve social media evidence just as if it were any other type of evidence. Additionally, requests to access an employee’s social media account(s) must demonstrate a valid reason to believe that there’s information in their profile that’s relevant to the issue under investigation. Once the evidence is gathered, it’s authenticity must be proven, given the possibility of impersonation and digital fabrication in the online world.
Accuracy in Criminal Background Checks
The federal government has neglected its responsibility for regulating the companies that provide criminal background checks used by 9 in 10 companies to screen job applicants. The damage done to job-seekers by flawed and unreliable data – a common problem with such services – can be devastating. For the first time, the Federal Trade Commission (FTC) has charged and settled a case with one background check company, HireRight Solutions Inc. The FTC charged that HireRight failed to follow reasonable procedures to prevent obviously inaccurate information from being provided to employers and, in many cases, even included the records of the wrong person. The company signed a consent decree that requires it to pay $2.6 million, provide consumers with information in their files in a timely manner upon request, promptly notify people who dispute their background reports about the outcomes of the investigation; and update reports to reflect the expungement or dismissal of criminal charges. The company must also submit to monitoring by the FTC. The standards in this settlement should be applied to all such businesses.
Conducting Online Investigations Using Deep Web Resources
An investigative analyst can find information that is hidden from traditional search engines. Analysts can search the “invisible web”, or deep web sources, including public records and social networks. By combining and re-combining information from these searches, they can uncover information and connections that are otherwise difficult to find. In fact, conducting a search on a traditional search engine, such as Google, only covers one per cent of what’s available on the Internet. Experts suggest that Internet research be done by an investigative analyst, and not by a traditional investigator who may not have the in-depth web knowledge to find all the relevant information. Some of the most effective uses of online investigations are: loss prevention, locating goods in Craigslist or intellectual property on Myspace and criminal activity, including tracing cell phones, PO boxes and e-mail addresses. Using advanced tools, investigative analysts review and extract the information they need, but they can only do what’s legally permissible. Luckily for them, most people tend to leave their profiles wide open.
U.S. Data Privacy Plan Not Deregulation, Says White House
With both the EU and U.S. in the early stages of reviewing their online data privacy regimes, the White House has defended its blueprint against claims that it is too soft on the digital industry. Daniel Weitzner, President Barack Obama’s deputy chief technology officer for internet policy, said that the ‘multi-stakeholder’ process the White House was proposing, which encourages companies to develop codes of conduct, “is not a code word for deregulation.” Weitzner also said that major companies have indicated to the U.S. administration that they were willing to be bound by such codes. If companies do sign up, he said he was very confident that the FTC would vigorously enforce the codes. Meanwhile, the White House will continue to urge the U.S. Congress to enshrine into law the Consumer Privacy Bill of Rights that Obama proposed in February 2012. The report also touches on concerns about the EU-U.S. Safe Harbor Agreement, noting, “There is a growing realization that this agreement will need to be updated in light of the ongoing overhaul of the EU and U.S. privacy frameworks.”
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Credit Checks On New Hires Declines
Fewer employers are conducting credit checks on job candidates than two years ago, according to a recent survey by the Society for Human Resource Management. Fifty-three percent of firms say they do not use credit reports in their hiring process, up from two years ago, when only 40 percent did not use reports.
“Employers are paying additional attention to the way credit reports are used,” relates Mike Aitken, SHRM vice president for government affairs. One reason firms tread carefully with reports (credit reports provide a detailed payment history, not a single numerical credit “score”) is that eight states now have laws restricting how a job applicant’s bill-paying habits can be considered, and many other states have considered enacting rules.
A Third of Companies Plan to Increase HR Spending In 2013
A third (31%) of companies plan to increase their spending on HR Technology in the coming year in an attempt to continue growth and improve efficiency in the face of a challenging economic environment. According to annual research released by global professional services company, Towers Watson, over half (53%) of the 628 global organizations involved in the research are planning to match last year’s investment levels while only 16% expect to reduce HR Technology spending.
Obama Amnesty Program Sends Illegal Immigrants In Search Of Criminal Records
Tarrant County has seen a dramatic spike in the number of requests for criminal record searches from Dream Act hopefuls seeking to gain U.S. citizenship. The “Dreamers,” as some call the illegal immigrants who were brought to the U.S. as children, hope to be granted deferred action under an Obama administration directive. As many as 800,000 undocumented young people in the U.S. could qualify under deferred action, some estimates show. Applicants must submit to a background check and have a clean record without felonies and serious misdemeanors, or any evidence of being a threat to the country.
As a result, demand for felony record searches has almost tripled over the last two weeks, District Clerk Tom Wilder said Tuesday. In late July, Wilder said his clerks ran 58 searches. By comparison, 169 searches were recorded the week of Aug. 13-17, Wilder said.
Department of Homeland Security officials are expected to decide each case. Wilder said it is using the data from Tarrant County as a “screening” tool.
Results of the 2012 Employers Background Screening Practices Survey and Summary of Trends Since 2008
The 2012 Employers Background Screening Practices Survey was conducted at the 2012 SHRM Annual Conference held on June 25 – 27th, in Atlanta, GA at the exhibit booth of PreemploymendDirectory.com. Human Resource professionals that visited our booth were asked to participate in the survey and to complete the questionnaire. In addition, a post card mailing was conducted to the pre-conference attendee list which directed attendees to an online version of the same survey. We received a total of 325 people completed surveys.
While this survey does not rise to the level of being statistically significant we believe it offers some key insight on how background screening service providers from the end users perspective.
The range of responses to on this question have remained relatively steady over the five year period with the four surveys we conducted. We believe for the background screening industry to move beyond being view as a commodity industry the ‘extreme and very satisfied’ responses will need to exceed 80%. This is a steep growth curve. We believe the NAPBS Accreditation process will help move the scores in this direction.
Prior Convictions Missed by Three Criminal Background Checks
A Colorado school bus driver accused of sexual assault on a child had prior convictions that should have prevented him from getting a job. Robert Gordon, 48, was arrested on three counts of Sexual Assault on a Child stemming from an alleged sexual relationship he carried out with a 12-year-old boy in 2002. In the arrest warrant, Gordon admitted to detectives to having sex with the victim and another underage boy at his home on multiple occasions. Both Gordon and the victim described the sex to investigators as being consensual. Court records revealed Gordon was acquitted in a case of Sexual Assault on a Child in 2001. He also had prior misdemeanor convictions of Harboring a Runaway Child in 1998 and driving under a suspended license in 1996. Either misdemeanor would have disqualified any job applicant, however, neither conviction turned up in separate criminal background searches with the Colorado Bureau of Investigations, the Colorado Springs Police and the FBI.
Screen Scraping Security
Increasingly, organizations are using automated tools to scan and collect information online. They’re looking at sites such as social networks and blogs for reasons such as reputation management, public relations, market research, and background checks. Tools that can automatically scroll for data known as screen scrapers are also becoming more advanced, but companies that use them must avoid legal pitfalls, which could include personal privacy violations as well as copyright infringement. Social networking and other sites that collect user-generated data should also take steps to protect data on their sites, including establishing appropriate privacy policies and implementing the appropriate technical security measures. Sites should also provide their users with mechanisms for deleting their sensitive data whenever they choose or utilize tools such as captchas (squiggly letters and numbers that only a human can decipher and enter manually).
Research Reports that Youth Offenses, Sentences, Predict Little about Recidivism
Data emerging from a seven years’ study of young offenders suggest that the nature of a serious juvenile crime or the length of time served for it, does not do a very good job predicting if a youth will re-offend. “Burglars are not all the same, neither are car thieves or assaulters,” said Edward Mulvey, professor of psychiatry at the University of Pittsburgh. “Just because they’ve done a certain type of offense doesn’t mean they’re on a particular path to continued high offending or more serious offending.”
“The way you code a presenting offense, you can do it violent or not violent, property or not property, you can do it a lot of ways; it never comes out as a real strong predictor of outcome,” Mulvey said, explaining some of his latest analysis. Once a juvenile is in state custody, the length of stay appears to have nothing to do with the recidivism rate, said Thomas Loughran, of the University of Maryland’s Department of Criminology and Criminal Justice. He worked on that issue with the Pathways data by comparing two similar groups of youth. “The more [time] we gave them, it didn’t make any difference, there was no effect” on recidivism, he reported, though cautioning that the bulk of the kids in the study served between three and 13 months.
Further, Loughran said his numbers show “no significant difference” in the re-arrest rate for offenders who served probation versus detention.
New FCRA Forms Will be Required by January 1, 2013
The Consumer Financial Protection Board (CFPB) recently issued regulations that call for the modification of three critical forms required by the Fair Credit Reporting Act (FCRA), which are typically used in the background
screening process. The regulations require that employers and affected consumer reporting agencies (CRAs) begin using these new forms by January 1, 2013. In particular, the CFPB has modified three specific forms to make clear that that the CFPB is the agency from which consumers may obtain information about their rights under the FCRA, not the Federal Trade Commission (FTC). The three forms to be modified are: 1) Summary of Consumer Rights under the FCRA; 2) Notice to Users of Consumer Reports of their Obligations under the FCRA; 3) Notice to Furnishers of Information of their Obligations under the FCRA. Employers and CRAs are well advised to keep abreast of the FCRA’s requirements and the CFPB’s rulemaking and enforcement.
Must All Employers Check Applicants Against a Terrorist List Before Hiring?
While the short answer is no, there is a bit more to this question that employers should consider. Under the U.S. Treasury Department, the Office of Foreign Assets Control (OFAC) administers and enforces economic sanctions against certain countries and certain individuals, such as drug traffickers and terrorists. To help enforce these sanctions, the OFAC publishes a frequently updated list called the “Specially Designated Nationals” or the SDN list, which lists individuals, companies and other entities that U.S. persons are prohibited from dealing with. Compliance with these sanctions means all U.S. persons (which, by definition, includes employers) cannot engage in any dealings with these countries or individuals, including hiring individuals on the list. Therefore, while checking the list is not specifically required, hiring someone on the list is prohibited.
So, shouldn’t all employers check the list? Not necessarily. While this decision should be made with the guidance of legal counsel, the employers must address the following concerns.
Many background checking companies offer an add-on service to check not only the SDN but various other lists, such as those compiled by the United Nations, Interpol and the FBI. Employers should know what lists will be checked and how best to use that information in their hiring practices.
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Rockefeller Seeks Detailed Information From Data Brokers
The chairman of the powerful Senate Commerce Committee has sent letters to Reed-Elsevier (Lexis-Nexis), Spokeo, Experian and a half dozen other data brokers seeking detailed info on how they compile and sell consumer information. ”Collecting, storing and selling information about Americans raises all types of questions that require careful scrutiny,” said Rockefeller. “While these practices may offer some benefits to consumers, they deserve to know what’s being collected about them and how companies profit from their information,” Rockefeller said in a statement Wednesday.
Three Years of the Baker’s Dozen Rankings
Compare the listings of the top ranked background screening firms according to HRO Today.
Employment Screening 2011:
1. Universal Background Screening
2.FirstPoint Background Screening Resources
3.SecurTest
4.TalentWise
5.EmployeeScreenIQ
6. General Information Services
7. Global HR Research (GHRR)
8. Employment Background Investigations
9.Corporate Screening Services
10.Orange Tree Screening
11. HR Plus
12. Verifications
13.Sterling Infosystems
The Catch-22 of Criminal-Background-Check Guidance
Though employers have had a few months now to become familiar with the U.S. Equal Employment Occupation Commission’s guidance on the use of criminal background checks, questions and confusion about how best to respond have only grown.
The guidance, issued April 25, is broad in its scope and specificity, essentially recommending that employers now only ask to see criminal records when such inquiries can be proven to be job-related. What this has created — especially in this presidential election year, when a November Republican victory could change the tone and direction of many directives coming out of Washington — “is a very tough Catch-22,” says Gerald L. Maatman Jr., partner at Chicago-based employment law firm Seyfarth Shaw.
“You either hire someone who could hurt your workforce, or you get in trouble for not complying with the EEOC mandate and EEOC enforcement.” “I think the jury’s out on just how possible this [revamping of all hiring practices and training] really is,” he says. “A lot of my clients are saying, ‘I could comply if I had buckets of money to spend to administer this.’ ”
In some cases, employers are simply refusing to follow the guideline for fear it will either put them out of business — considering this new cost of training — or create an unsafe working environment, says William Tate, president of Chicago-based HR Plus, a screening-solutions provider.
Half of All Employers Have Hired Workers With a Record
While having a run-in with the law can have long-term repercussions for job hunting, a new study from CareerBuilder shows organizations are open to giving people second chances. Fifty-one percent of Human Resource managers reported that their organizations have hired someone with a criminal record. The survey was conducted online within the U.S. by Harris Interactive© on behalf of CareerBuilder among 2,298 U.S. hiring managers and human resource.
“The number one recommendation hiring managers have is to own your past and focus on what you learned from it to grow professionally and personally,” said Rosemary Haefner, Vice President of Human Resources at CareerBuilder. “You also want to stay active. Taking classes, volunteering and tapping into social networks can be good ways to help overcome obstacles associated with job hunting with a criminal past.”
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Background Checks Too Expensive for All Contractors, Bloomberg Says
Background checks that would prevent ex-cons from getting lucrative city sub-contracts are too expensive, said New York City Mayor Michael Bloomberg. Currently, the city doesn’t require agencies to conduct background checks when they’re awarding sub-contracts for less than $100,000. That means ex-cons like Nicholas Analitis, who served three years in prison for passing bad checks and ripping off banks, was able to land hundreds of thousands of dollars worth of contracts, despite his history. Analitis is now accused of swindling his workers out of tens of thousands of dollars by paying them with phony checks. But Bloomberg said that requiring background checks on every person looking to do business with the city wouldn’t be worth the cost. Analitis found a loophole in the Vendex questionnaire provided by the Mayor’s Office of Contract Services, which is required when applying for work in the city. Since the contracts were less than $100,000, Analitis was approved without a background check. Ironically, the Vendex system was created to weed out businesses linked to criminals or organized crime and prevent them from getting taxpayer-funded projects.
Hiring Ex-Offenders: Time For a Different Approach
Obtaining and maintaining employment is one of three dominant factors (along with marriage and military service) in explaining desistance – why and how people stop committing crimes. The search for effective recidivism reduction strategies has increased, despite their lack of success. In many cases, recidivism was not reduced, and in some instances it increased. Recognizing the criminal mindset or “criminal thinking” is important, for it must be addressed and changed if the offender is to have a decent shot at obtaining and keeping a good job. Job retention is often a bigger challenge than the securing of a job. This mindset is generally not supportive of legitimate employment and the behaviors required to sustain it over the long term. The risk that we run when taking the approach of jobs first is that we will send offenders to work without the preparation and skills they need to cope with the contemporary workplace. In addition to vocational counseling and job preparation services, we need to expend the resources and take the time to ensure that the offender we send out to work is as ready as possible and has the right mindset to succeed in the workplace.
Conduct Thorough Background Checks on Travel Agents
People have been urged to conduct thorough background checks on travel agents. Consumer Council of Fiji has received 91 complaints against travel agents in the last three and a half years and 13 complaints up until September this year. Chief Executive Officer Premila Kumar said that there are bogus travel agents who demand lump sum of money after promising consumers work permits, migration visas and permanent residency in overseas countries. Kumar said it has been brought to the Council’s attention that some of these travel agents close overnight and people have no idea what to do. The Council is concerned that such cases will continue to rise, as there is no proper monitoring system in place and no monitoring authority to look into this problem. The Council has resolved some cases through mediation held at the Council where the travel agents agree to refund partially or the full amount, however most of the cases however have been referred to CID for investigations.
RSA 2012: U.S. Lobbying Hard to Alter EU Data Protection Law
The American government wants European data protection proposals changed, and is working with the U.S. Chamber of Commerce to lobby the EU to alter them. The European Commission proposed a fresh directive and a new regulation on data protection last year that came under fire for introducing a number of “overbearing” proposals, including fines of up to two percent of the global annual turnover of a company for severe security events, a 24-hour data breach disclosure rule, a stipulation to make companies with more than 250 employees appoint a data protection officer, and the need to implement “privacy by design”. Adam Schlosser, the U.S. Chamber of Commerce’s senior manager for global regulatory cooperation said the Chamber of Commerce had made incremental progress, and that the business community will need sustained and continued efforts to develop a pragmatic approach that considers how a final regulation can actually work in the real world. Schlosser noted that some of the biggest concerns are providing flexibility for different business models, allowing for compliance with existing legal obligations (such as anti-fraud) both in the EU and in third countries, and creating a ‘one-stop shop’ that is predictable and consistent.
10 Ways Electronically Stored Information is Changing the Investigative Industry
Discovering the answers needed for an effective background checks client requires delivering on your promise to gather intelligence on the subject you are investigating. Increasingly the investigative industry is more interested in Electronically Stored Information (ESI) than many of the old methods of collecting data.. Whether the information comes from private data sources (e.g. CLEAR, TLO, and IRB), from public records, or from electronic evidence (e.g. email records and internet log files), the availability of large volumes of intelligence in an electronic format is appealing. Modern investigators seize the opportunity to access this information with apparent simplicity, efficiency and convenience while leveraging the intel into more valuable case results. Here are 10 ways that electronically stored information is changing the investigative industry today:
Privacy and Civil Liberties Oversight Board To Hold First Public Meeting
The Privacy and Civil Liberties Oversight Board will hold its first public meeting this month, according to a notice in the Federal Register. The board, which aims to provide privacy oversight on U.S. surveillance and security measures in the fight against terrorism, had remained dormant since 2007, inciting widespread criticism. President Barack Obama appointed new members to the board in 2011, and the Senate confirmed four of five nominees earlier this year. The aim of next Tuesday’s meeting is to gather feedback from nongovernmental organizations and members of the public on priorities the board should consider on its forthcoming agenda. The public portion of the meeting will take place from 10 a.m. to noon on October 30 in Washington, DC.
Background Screening & Hiring Costs
Employers conduct checks of job applicants’ background to mitigate risk, reduce liability, improve the quality of new hires, promote workplace safety, and meet regulatory compliance requirements. The process has been simplified in recent years by the rapid growth in the professional background screening industry-and most companies take advantage of these firms’ services, according to respondents. Only 21 percent of companies rely exclusively on in-house staff to conduct security background checks on new hires, and those that do tend to be smaller employers. In addition to ease of use, cost is another motivation to utilize outside firms to conduct background checks. The median cost for conducting a security background check is 25 percent less when utilizing an outside agency than exclusive use of in-house staff, according to respondents. Interestingly, companies that leverage the different strengths of both in-house staff and contract firms in their background check process report paying the least-just $62.50 per new hire.
The lure of using an outside firm to conduct background checks can’t blind organizations to their limitations, however. These firms may inflate the extent of their databases, and security teams need to assess what they cover and how frequently the provider updates them. Tests of online screening firms have shown that applicants with criminal histories can slip through, and companies should conduct their own tests-by periodically sending in a name for which a criminal history is known-to see whether the provider accurately identifies it.
Former NBA Star Conducts Background Checks
Cartwright made a name for himself on the basketball court protecting the hoop and blocking shots as a center. Now, the legendary NBA player and coach is chairman of CartwrightDownes, a company that conducts confidential background investigations. The firm specializes in serving the nuclear and transportation industries, but Cartwright wants to expand into other industries such as medical, education and real estate. “Every day companies make key hiring decisions that could easily change their reputation. And when your reputation is on the line, you have to be protected,” Cartwright said. “What happens if a company unknowingly hires someone with a shady background or a person who has embellished his or her resume? That could create bad publicity, damaging a company’s brand and reputation beyond repair.” Cartwright retired as a player following the 1994-95 NBA season, having collected three NBA championship rings and experiencing success with New York Knicks, the Chicago Bulls and the Seattle Supersonics. He returned to the Bulls in 1997 as a member of the coaching staff.
SHRM Survey on Employee Background Checks
Seven out of 10 organizations (69%) claim they conduct criminal background checks on all job candidates, according to a 2012 background check survey from the Society for Human Resources Management. That survey shows another 18% conduct such checks on select job finalists and only 14% say they don’t research candidates for criminal records. When conducting employee background checks, consider this Top 10 list of dos and don’ts when it comes to protecting your business against bad hires: do be broad and thorough; do follow the law; do be consistent; do locate patterns; and do use a professional agency to process your background check. On the other hand: don’t use the “box”; don’t bend the laws; don’t fail to communicate; don’t seek out only the negative; and don’t run a limited search yourself.
Best Practice for Internet Background Checks
Results of the survey’s data around social media and Google background checks in the Monster/BLR Survey of Recruiting Best Practices.
Have your hiring decisions been influenced by what you found online? Forty-one percent have been positively influenced to hire based on information they found online, while twenty-six percent have turned down a candidate based on what they found online.
Do you visit candidates’ social media pages (e.g., Facebook pages) as part of your background checking procedures? Nineteen percent of respondents indicated that they did visit candidates’ social media pages.
TSA Doing Background Investigations by the Book but Not Fast Enough, IG Says
TSA is carrying out background investigations of employees in the legacy Transportation Threat Assessment and Credentialing Office (TTACO), which is charged with keeping tabs on individuals with access to the U.S. transportation system. However, the DHS inspector general (IG) says the investigations have not been timely. While the secure flight operations center and the security threat assessment operations adjudication center within TTACO identified potential insider threat risks, limited resources weaken internal control at the security threat assessment adjudication center and the shift and supervisory structure at the secure flight operation center represent an inefficient use of resources. The IG concluded that there has been a pattern of poor management practices and inappropriate use of informal administrative processes to assess and address misconduct. TSA agreed with recommendations to improve background investigations, internal controls, staffing models, data system development coordination, and use of TSA or DHS formal complaint processes. This includes the development of a restructuring plan to enhance operational effectiveness in the secure flight operations center staffing model.
Background Screening & Hiring Costs
Employers conduct checks of job applicants’ background to mitigate risk, reduce liability, improve the quality of new hires, promote workplace safety, and meet regulatory compliance requirements. The process has been simplified in recent years by the rapid growth in the professional background screening industry-and most companies take advantage of these firms’ services, according to respondents. Only 21 percent of companies rely exclusively on in-house staff to conduct security background checks on new hires, and those that do tend to be smaller employers. In addition to ease of use, cost is another motivation to utilize outside firms to conduct background checks. The median cost for conducting a security background check is 25 percent less when utilizing an outside agency than exclusive use of in-house staff, according to respondents. Interestingly, companies that leverage the different strengths of both in-house staff and contract firms in their background check process report paying the least-just $62.50 per new hire.
The lure of using an outside firm to conduct background checks can’t blind organizations to their limitations, however. These firms may inflate the extent of their databases, and security teams need to assess what they cover and how frequently the provider updates them. Tests of online screening firms have shown that applicants with criminal histories can slip through, and companies should conduct their own tests-by periodically sending in a name for which a criminal history is known-to see whether the provider accurately identifies it.
Background Checks Prone to Mistakes
In a recent case highlighting the inaccuracy of background checks, Darlene T. Martinez was confused with Darlene Foster Ramirez, who was found guilty in 2009 of dangerous-drug possession in Navajo County. The employer offering Martinez a job then rescinded their offer, and Martinez was left scrambling to remove another person’s felony from her record and find a new job. Legal experts say background checks can be filled with errors due to incomplete databases and confused identities. These errors can be difficult to fix, costing applicants job opportunities and disrupting livelihoods. Martinez filed a lawsuit in U.S. District Court against the Phoenix-based company that did the search, Universal Background Screening, alleging that it failed to notify her about the damaging report and that it didn’t follow the necessary procedures to ensure accuracy. In addition to different last names, Martinez and Ramirez also have different birthdays. The suit seeks undetermined damages for violating the federal Fair Credit Reporting Act. Universal Background Screening has denied any wrongdoing, saying that it rarely makes mistakes and that the company followed all necessary guidelines and protocols to ensure accuracy.
Reputational Risk Still a Top Concern for Boards
For a second straight year, boards of directors see reputational risk as their top concern. They’re also displaying a new optimism about a financial recovery, and are making plans to hire staff to support CFOs, according to a survey by EisnerAmper LLP. The study, “Concerns About Risks Confronting Boards,” found that 66% of 193 directors see reputational risk as their top concern, compared with 59% who view regulatory risk as the top concern. While survey respondents’ worries about regulatory risk have remained relatively stable, “the concern about reputation has grown over the last couple of years,” says Kreit. He notes that their reason for concern is “the very high-profile issues that have occurred with companies over the last few years,” including, for instance, the BP oil disaster on the Gulf Coast.
Taken together, the top areas of concern in reputational risk are product quality, liability, and customer satisfaction, at 39%. Second is a combination of concerns about integrity, fraud, ethics, and the Foreign Corrupt Practices Act, which totaled 24%.
2012 Baker’s Dozen Customer Satisfaction Ratings: Screening
HRO Today’s Baker’s Dozen rankings announced: Once collected, response data are loaded into the HRO Today database for analysis to score each provider that has a statistically significant sample. For this survey, we required 13 responses from 10 companies, and we received feedback from more than 700 verified customers.
1. SecurTest, Inc.
2. TriCor Employment Screening Ltd
3. Background Profiles
4. FirstPoint Background Screening Resources
5. TalentWise
6. Aurico
7. Verifications Inc.
8. Sterling
9. Global HR Research
10. Universal Background Screening
11. EmployeeScreenIQ
12. IntelliCorp
13. Orange Tree Employment Screening
National Retail Federation Tells Civil Rights Commission Criminal Background Checks Should Continue
National Retail Federation (NRF) asked the U.S. Commission on Civil Rights to closely examine new guidelines on the use of criminal background checks to screen job applicants, saying the regulations threaten to undermine retailers’ attempts to protect their customers and employees. “NRF believes that the criminal background question needs to remain on employment applications,” NRF Vice President for Loss Prevention Richard Mellor said. “This vital information is every bit as relevant as an applicant’s education, previous employment experience and formal training.” ”The retail industry wants to keep our workplaces safe,” Mellor said. “Earlier interpretations of the guidelines were working fairly (but) this overly burdensome guidance will add risk, increase expenses, and cause confusion and legal challenges for many retailers.”
Mellor was among witnesses testifying at a hearing the civil rights panel held on guidelines issued in April by the federal Equal Employment Opportunity Commission.
E.U. Privacy Watchdog Expects No Immediate Change in Data Protection Standoff with U.S.
The European Union’s top data protection watchdog expects only a select band of U.S. IT companies will meet E.U. data protection standards for some time to come. Under the E.U. Data Protection Directive, personal data cannot be transferred out of the E.U. unless the destination country’s data protection laws are deemed adequate. There are, however, exceptions for U.S. companies that agree to abide by seven “safe harbor privacy principles” for the protection of E.U. citizens’ personal data. This data includes sensitive information such as patient records required for telemedicine. The U.S. Ambassador to Europe, William Kennard, called for the U.S. to be given “adequate” status in a speech at the Annual European Data Protection and Privacy Conference. To date, only a tiny number of jurisdictions have been deemed adequate: Argentina, Canada, Guernsey, the Isle of Man, Israel, Switzerland and Uruguay. European Data Protection Supervisor, Peter Hustinx, thinks the ambassador was being too optimistic and suggests that rather than declaring a company’s laws adequate outright, a sectoral approach to data adequacy might be more useful.
Lack of Criminal Background Checks by National Youth Organization Led to Alleged Sexual Abuse of Youths
The refusal of the Boy Scouts of America (BSA) to conduct criminal background checks on all volunteers until 2008 allowed convicted child sex offenders to join the organization and led to a significant amount of alleged sexual abuse of youths, according to a Los Angeles Times analysis of confidential BSA files. The BSA – one of the oldest and largest youth groups in the United States – admitted more than 230 men to Scouting with previous arrests or convictions for sex crimes against children who were accused of molesting nearly 400 boys in Scouting from 1985 to 1991. The Times also reported previously expelled men slipped back into the program to molest again and that BSA officials failed to report hundreds of alleged abusers to police and often hid allegations from parents and the public. While background checks became required for Scouting employees in 1994 and mandatory for all new volunteers in 2004, the BSA refused to conduct checks on current volunteers who were already in the organization until four years later. According to the Times, BSA officials argued background checks would cost too much, scare away volunteers, and provide a false sense of security and they successfully lobbied to kill state legislation that would have mandated FBI fingerprint screening.
2013 Brings Significant Criminal Background Check Changes for Ohio Home Health Agencies
The Ohio Department of Health has proposed new administrative rules scheduled to take effect January 1, 2013 that will significantly impact the obligations of a home health agency (“HHA”) regarding background checks of its current and potential employees.
The new rules require HHAs to conduct criminal background checks on applicants before hiring and on all employees at least once every five years. HHAs must initially check current employees hired prior to January 1, 2008 no later than thirty days after the anniversary of the employee’s date of hire and employees hired on or after January 1, 2008 no later than thirty days after the fifth anniversary of the date of hire. Prior to conducting the required checks, the HHA must check six specified electronic databases. The new rules also enhance the list of “disqualifying offenses” and provide a tiered exclusionary period system based on the offense committed.
The new rules alter the definition of “direct care,” which will include skilled nursing care, physical therapy, speech-language pathology, occupational therapy, medical social services, and home health aide services provided in a patient’s home. It further includes any activity that requires the person performing the activity to be routinely alone with the patient or routinely have access to a patient’s personal or financial documents. The new rule also broadens the term by applying it to “a patient” rather than merely “an older adult” as under the current rule.
Use of Advanced Truth Verification Technology Increases
The Computer Voice Stress Analyzer CVSA ® is the only voice stress analyzer in the world with two US Patents, and the only system worldwide incorporating the FACT® scoring system, which uses scientifically validated processes to reliably and precisely evaluate the results of CVSA examinations. The CVSA is now used by close to 2,000 agencies and is the most widely used truth verification system in the US, far surpassing the number of agencies that use older polygraph equipment. A soon to be published research study will report the accuracy rate of the CVSA is greater than 95%, an assertion long made by the system’s manufacturer. The study’s results are further supported by current US Government funded voice analysis research which has found voice technologies performed well for border security applications.
Research conducted in both Europe and the US over the past several years supports the superiority of voice stress analysis technology over older polygraph equipment, which explains the rapid adoption of the CVSA for truth verification applications in Latin America.
The Nuances of Statewide Searches
There are two types of statewide searches, it is important to distinguish between two types: a state repository and a unified statewide database. It’s important to understand the differences.
A state repository is a law enforcement database that contains some or all records of law enforcement activity related to a given subject. As a general rule, anytime someone is arrested at the local level, there is a robust mechanism to report that information to the state repository. It is this mechanism that in part, makes certain that individuals who are arrested go to court.
By contrast, there is an administrative office of the court statewide database, which is sometimes referred to as a unified statewide database. This is the state court administrators’ consolidated portal by which you can look at the individual case results of some or all of a subject’s state/county court records.
Organizations commonly use a state repository search when there is a statutory mandate that requires them to do so. In some instances repository searches may be limited by a statutory requirement. Unified searches are a viable alternative if there is no requirement or guidance compelling or dictating the nature or scope of a background check. In most instances the turnaround time is shorter and the methods of access are less burdensome.
Criminal Background Checks: Good in Theory, Problems in Practice
One of the longest held axioms in social science is, “The best predictor of future behavior is past behavior.” Over the years many employers have increasingly relied upon criminal background checks as the principle strategy used to screen out potentially risky hires from the workforce. The problem is, as expressed by another axiom of behavioral science, namely, “People often make bad decisions early in life.” These bad decisions, which they later regret, usually are not permanent. People can recover, rehabilitate themselves, and turn their lives around.
In making hiring decisions, Richard C Hollinger, Ph.D. states that “find ourselves at the horns of a dilemma. Most people who are convicted of a crime, especially property offenses, will never offend again and not become a threat to society. The problem is that we do not have very good tools to predict who will be successfully rehabilitated and who will offend again. As such, most employers, on the advice of legal counsel and risk management, choose to err on the conservative side of this question. This means, if a person has been convicted in their past, we generally exclude these individuals as candidates for employment forever. The net effect of this policy is gross discrimination. This is especially true for those who have used drugs, stolen anything, and who are male minorities, particularly true for African American males.”
Dr. Hollinger hopes that the retail industry will embrace and implement the new EEOC guidelines to change their present hiring policies. He also asserts that social science research literature supports the new EEOC hiring guidelines. Moreover, he states that one could argue that the industry that hires the largest number of employees in our country should be the one to lead the rest of the nation in reducing the level of racial, ethnic, gender, sexual orientation, and other forms of unwarranted discrimination.
LexisNexis Screening Solutions Portfolio to Symphony Technology Group
LexisNexis® Risk Solutions today announced it has entered into a definitive agreement to sell its LexisNexis screening business to the Palo Alto-based private equity firm Symphony Technology Group (STG). STG plans to combine LexisNexis screening with its portfolio company, First Advantage, to create a global leader in talent acquisition solutions.
“The decision to sell the screening business came after a careful review of the needs of the business and the strategic goals we have in place,” said Mark Kelsey, CEO, LexisNexis Risk Solutions. “While the screening business has been a significant offering within the LexisNexis portfolio, there is greater long-term opportunity for the business with an organization like First Advantage, which is focused on bringing background screening solutions to the marketplace.”
What Bad Hires Really Cost Companies
According to a new CareerBuilder study, 69 percent of employers report that their companies have been adversely affected by a bad hire this year, with 41 percent of those businesses estimating the cost to be more than $25,000, and 24 percent saying a bad hire cost them more than $50,000. “Whether it’s a negative attitude, lack of follow through or other concern, the impact of a bad hire is significant,” says Rosemary Haefner, vice president of human resources at CareerBuilder. “Not only can it create productivity and morale issues, it can also affect the bottom line.”
Why Do Bad Hires Happen to Good People?
When asked what accounted for the bad hire, survey participants report the following reasons that led to their hiring mistakes:
Needed to fill the job quickly (43 percent)
Insufficient talent intelligence (22 percent)
Sourcing techniques need to be adjusted per open position (13 percent)
Fewer recruiters to help review applications (10 percent)
Failure to check references (9 percent)
Lack of strong employment brand (8 percent)
Twenty-six percent of employers say they weren’t sure why they made a bad hire and that sometimes you just make a mistake.
Liars Index® Continues to Decline, Lyin’ King Chosen
The rate of misrepresentation of education claims on resumes, calculated semi-annually as the Liars Index®, fell back again in the second half of 2012, declining to 14.00 percent, the lowest semi-annual calculation in four years.
The rolling average for the last two years moderated to 20.75 percent, the lowest rate since mid-2011. There have been noticeable press reports over the past year regarding misrepresentations of academic credentials.
When attention is drawn to cases where candidates’ education claims do not match up with the school record, seekers may be inclined to correct the record on their resumes. But when the CEO of a major public company fails to correct the firm’s public announcement of education credentials, people will take notice and wonder what other career facts may need to be verified.
Reprinted with permission of Jude M. Werra & Associates, LLC. All right reserved.
Media Screening Can Help to Avoid Brand Damage Through a Bad Hire
Many companies are now looking to add media screening when hiring at the executive level. Media screening is a comprehensive search through various databases to access thousands of news sources including newspapers, trade publications, professional journals, articles, transcripts, etc. The results of this search can include award nominations and other achievements by the applicant, community and industry association involvement, business and job disputes, references to criminal activity, or other potentially negative information. It is important to note that media screening is not the same as social media screening. Media screening practices go beyond what the potential employee shares with you during the interview but don’t cross the line into the “personal” aspect of social media checks. Media searches can complement your background screening efforts by providing information about incidents or investigations that may not be reflected in official records and can also highlight the positives about an individual that might not come through in the interview process. Employers may want to give more weight to information that has been “published” versus what has been “posted.”
New Workforce, New Tools
Background screening is a critical component of any talent acquisition strategy. Without a standard and efficient approach to compiling and authenticating candidate information, organizations will lose their best talent and become vulnerable to risk and compliance issues. Yet, according to Aberdeen’s talent acquisition research, only 4% of organizations cited background screening as the top talent acquisition priority in 2012. In today’s highly competitive market, HR leaders need to think more strategically about background screening-particularly around their technology investments. Many organizations are only investing in screening at specific job levels, while others fail to invest in credible providers that provide accurate information on candidates. With a new set of regulations and an increasing number of dubious providers offering inaccurate information on potential candidates, organizations can no longer afford a haphazard approach to screening. The top criteria used to select a provider include accuracy, turn-around time, compliance and customer service. Additional criteria that organizations should consider include globalization, social media, a positive candidate experience, and total talent acquisition.
To Screen or Not to Screen?
According to HireRight’s 2012 Employment Screening Benchmarking Report, 34% of respondents perform background checks on current employees, and experts in the field believe the trend is growing. It’s a step toward furthering risk management and maintaining a safe working environment for employees and clients. “Since a background check is a snapshot in time, employers should be interested in ongoing screening to help identify employees who may commit crimes that would have precluded their initial hire,” notes Steven James, founder and chief operating officer of Background Profiles. Certain industries are more prone to receive the value of investing in annual background screens such as in the health care, transportation, and financial services industries. Various factors should be taken into consideration if your organization moves forward with annual background screening: Consent is key; Keep cost and relevancy in mind; Think about compliance; Communicate and be consistent; Contractors count too. And if every year isn’t in your budget, think about spacing apart total workforce screens every two years.
These 5 Trends Are Shaping the Future of Pre-hire Assessments
2013 is going to present the start of a major tipping point in the way people find jobs and are evaluated for jobs, and a blend of technology and assessment content will play a big role in these ongoing changes. This opinion is not founded on trends within the pre-hire assessment industry, but rather on the bigger picture of emerging trends in Internet technology: Social Connectivity; Collective Intelligence; Gamification; Credentialing; and Entrepreneurial Culture. The ability of data to drive useful connections with others who share the same interests and the ability to share information across relationships is rapidly gaining teeth. It is now possible to use personal preferences, connections, and interests to provide meaningful insights into almost everything. In terms of hiring, connectivity continues to make sourcing (and job searching) easier. The emerging Internet has introduced many sites and businesses who offer the ability to collect input from multiple persons, aggregate the data, and report on it such that one overall opinion creates an accurate representation of the views of many. When combined with increases in connectivity, we gain the ability to collect insight about a person, product, or service that may not be exactly in line with what is outwardly represented.
State Pushing for Federal Background Checks at Daycares
A CBS Atlanta News investigation revealed that 24,000 daycare workers in Georgia are on the job without having undergone a federal background check. A local background check is currently all that is required by the state. Kellen Stennett, owner of The Goddard School in Buckhead, said that he believes the state should require more thorough background checks on daycare workers. In response, the Georgia Department of Early Care and Learning is pushing new legislation to require a federal fingerprinting background check. They receive more than 100 complaints a month related to possible inappropriate activity at daycare centers. “The federal background checks are a little bit more complicated,” said Stennett. “They cost a lot more money, they take a lot longer to get the results back so particularly if you’re looking to make a quick hire or something like that it can be restricting.” Georgia is expecting lawmakers to pass legislation this session to strengthen background checks.
Risky Business People: Study Finds 1 in 8 Workers Bring Potential Peril to Their Company
Organizations need to recognize the advantages and disadvantages of behavioral risk of all employees. Doing so allows an organization to manage risk in a constructive way, according to a study published by SHL, an Atlanta-based talent management company. The study claims 1 in 8 managers and professionals globally represent a high risk to their companies. The risk comes from lower-quality decision-making and poorer communication. Moving up the corporate ladder shows a decrease in risk level: 1 in 15 executives pose a high risk for their companies. Conversely, 1 in 7 lower-level employees, such as team leaders and individual contributors, provide the highest potential for risky behavior. Finally, 1 in 8 frontline staff represent a high risk to their companies because of counterproductive behaviors, such as lower compliance and attention to detail, less of a commitment to a company and reluctance to working with a team. These counterproductive behaviors can lead to more errors in the workplace or damage a brand’s name through poor customer service. SHL recommends businesses commit to enforcing ethical standards and developing effective channels for employees to comfortably communicate ethical infractions to their superiors.
Gov.’s Proposal Would Charge $10 for Court Records Search
In a move that is raising concern about limiting access to public documents, California courts could charge $10 for each record search under a proposal included in Gov. Jerry Brown’s budget. The governor included the search fee as one of the ways the courts can raise $30 million a year to offset budget cuts. The judicial budget has been reduced by more than $1 billion through cuts and transfers over the past five fiscal years, which has resulted in fewer courtrooms, construction delays and an array of higher fees. Media organizations and good-government advocates worry that such a fee would restrict access to files the public has a right to view. Democratic lawmakers also expressed distaste for restricting information to those who can afford it. Currently, there is no charge to search a court file, although courts charge $15 to look up cases that require a court employee to take more than 10 minutes to search. Under the governor’s proposal, a person could search for free for a case in which that person is a party but would be charged $10 for each additional search. Lawmakers are holding off on the proposal until the governor updates his budget in May.
Retailers Track Employee Thefts in Vast Databases
Facing a wave of employee theft, retailers have amassed vast databases of workers accused of stealing and use the information to keep employees from working again in the industry. The repositories of information often contain scant details about suspected thefts and routinely do not involve criminal charges, but the information can be enough to ruin a job candidate’s chances. Some employees who submit written statements after being questioned by store security officers have no idea they admitted committing a theft or that the information will remain in databases. The databases, which have tens of thousands of subscribers and are used by major retailers like Target, CVS, and Family Dollar, are aimed at combating employee theft. While the databases are legal, they face scrutiny from labor lawyers and federal regulators, who worry they are so sweeping, that innocent employees can be harmed. The lawyers say workers are often coerced into confessing, sometimes when they have done nothing wrong, without understanding that they will be branded as thieves. The FTC has fielded complaints about the databases and is examining whether they comply with the Fair Credit Reporting Act, a federal law aimed at curbing inaccurate consumer information and giving consumers more control.
State Laws Make Federal Fair Credit Reporting Act Compliance Difficult for Employers
A recent article from the HR Daily Advisor featured Attorney Lester Rosen, CEO of accredited background screening company Employment Screening Resources (ESR), who advised employers to follow state rules for the federal Fair Credit Reporting Act (FCRA). Rosen notes that many U.S. states have their own laws, some quite detailed, with FCRA implications that regulate the collection, dissemination, and use of information for employment screening background checks. In Massachusetts, for example, Rosen says the final adverse action letter must be in 10-point type minimum, be issued within 10 days, and use specified language. California has what he calls numerous “only in California rules.” There are currently 20 U.S. states with their own FCRA-type rules are. In addition, Rosen says various states have special rules concerning the following: Disclosure forms for consumer, Rules for Investigative Consumer Reports, Nature and Scope letter, Disputed Accuracy procedures, Timing and notice of reports, Notification periods, and 7-year limits on criminal records.
Survey: Half of All Employers have Hired Workers with a Record
While having a run-in with the law can have long-term repercussions for job hunting, a new study from CareerBuilder shows organizations are open to giving people second chances. Fifty-one percent of Human Resource managers reported that their organizations have hired someone with a criminal record. The study, which included more than 2,000 hiring managers nationwide, also looked at what job seekers with criminal records can do to help their chances of getting hired. “The number one recommendation hiring managers have is to own your past and focus on what you learned from it to grow professionally and personally,” said Rosemary Haefner, Vice President of Human Resources at CareerBuilder. “You also want to stay active. Taking classes, volunteering and tapping into social networks can be good ways to help overcome obstacles associated with job hunting with a criminal past.” Hiring managers also recommend staying positive and be willing to work your way up.
Using Social Media to Assist With Crisis Management
Social media, and the speed by which it can be used to spread information, has enormous potential to accelerate a reputational crisis. Conversely, social media can be one of your most valuable tools when it comes to crisis management. Your ability to manage a crisis may, however, be directly impacted by how prepared you are to utilize social media in a focused and comprehensive way when a crisis occurs. Some best practices your company or organization can put in place include: designating a social media spokesperson for your company or organization; making sure that your social media communications are appropriately informed; using social media consistently; making sure that your management and those responsible for responding to crises are properly trained; and enacting a concise social media policy that clarifies who may represent your company or organization via social media.
Eight Truths Employers Should Know
Background screening is now a critical task to ensure employers avoid the legal and financial nightmare of hiring employees who are unfit, unqualified, dangerous, or dishonest. However, some employers have misconceptions about background checks.
Mall of America Uses Behavior Profiling
The Mall of America in Minnesota has instituted widespread behavior profiling in the decade since 9/11, says Security Director Doug Reynolds. While many businesses looking to improve security have resorted to traditional cameras and metal detectors, Reynolds attended a training in Israel to study how behavior profiling is used at Tel Aviv’s Ben Gurion International Airport. He then brought in former Israeli Airports Authority security agent Michael Rozin to help adapt behavioral profiling best practices to the needs of the mall. Together, Rozin and Reynolds developed a Risk Assessment and Mitigation (RAM) program that uses a small percentage of traditional security staff to search for out-of-place objects or behaviors, run security interviews, and handle operational deployment. Although the behavior profiling program was adapted to fit the Mall of America’s environment, it uses the same three components as Ben Gurion airport: detecting suspicious indicators, security interviewing (which Rozin said is the most important) and operational deployment. Officers also work closely with local police to obtain additional information during security interviews or if a potential threat is identified. Finally, the RAM program has enlisted aid from a wide array of mall employees, since they are most likely to notice suspicious people or objects.
New Requirements Under the Fair Credit Reporting Act for Employment Background Checks
Companies routinely conduct background checks on applicants for employment or current employees being considered for promotion to assist them in selecting the best candidates. As of January 1, 2013, employers required to follow the FCRA must provide new and updated notices to applicants and employees. The recently created Consumer Financial Protection Bureau (CFPB) issued these new requirements and deadlines. The CFPB is now the enforcement authority over the FCRA. Prior to the creation of this new federal agency, the Federal Trade Commission enforced the FCRA. The 2013 change also includes modification to the mandatory “Summary of Rights” form. Now is a good time for businesses to review their procedures for conducting background checks and the forms they use to make sure that they are in compliance with federal and state laws. When deciding upon an outside agency, companies should ask about the agency’s FCRA compliance program and may want counsel to review any disclosure or consent forms provided by the agencies. They should also train those making hiring or personnel decisions involving a background check in this area of the law.
Contingent labor and Contract Workers
The Threat of Contingent Labor on Workplace Safety
According to the Bureau of Labor Statistics (BLS), roughly 10 percent of the U.S. workforce can be classified as contingent (indirect) labor today. This population of the workforce (also referred to as the Extended Workforce) often has unrestricted access to your workplace–to facilities, systems, even sensitive and valuable materials–yet they are not subject to the same rigorous screening standards of full-time employees. This informative research brief describes the risks presented by this portion of the labor pool, results of researched performed in comparing the backgrounds of thousands of contingent workers to permanent workers of the same employers, and what’s required to mitigate risks associated with the extended workforce
Credit Checks
State-by-State Guide for Credit Checks
To help you create a background checking policy, the attorneys at Fisher & Phillips LLP have created a state-by-state guide for the use of credit information in employment screening. Fisher & Phillips has represented a wide range of public and private employers in all areas of labor and employment law for the past seventy-five years.
Criminal Records
State-by-State Guide for Arrest and Conviction Records
Download this quick reference from the attorneys at Fisher & Phillips LLP to access this state-by-state guide for the inquiry into or use of arrest and conviction records in public and private employment screening. Fisher & Phillips has represented a wide range of public and private employers in all areas of labor and employment law for the past seventy-five years.
Criminal Background Checking Basics
According to the U.S. Department of Justice, more than 92 million Americans, or approximately one in three have some sort of criminal history. Are you performing criminal background checks? Are your searches comprehensive enough? Read this white paper to learn why criminal background checking is important, considerations regarding the April 2012 EEOC guidance, pitfalls of limited geographic searches, additional searches that can be performed to fill in potential gaps, and your responsibility when a criminal record is revealed.
What Does it Mean?
Criminal records are full of strange terms, abbreviations and legal jargon often making them difficult to decipher. Here are a few of the more common terms relating to case dispositions and their meanings that often show up in criminal history reports:
Nolle Prosequi – The prosecutor declares that he/she will not proceed with prosecuting the case at this time. This is not the same as an acquittal as the case may be reopened at a later time;
Nolo Contendere – A defendant may enter this (no contest) as his or her plea. It means the defendant will not contest the charges but neither admits guilt or claims innocence but agrees to accept punishment.
Pre-Trial Probation – We see this in some MA cases. It’s a court approved agreement between the prosecutor and the defendant before a trial or a guilty plea. The defendant is under the care of a probation officer for a set period of time. Certain conditions may be imposed during this time such as performing community service, seeking or retaining employment, or drug or alcohol testing. If the defendant successfully completes the probationary period, charges are dropped. But, if the agreed upon terms are violated, the original case will proceed normally.
Pre-Trial Intervention – This is one we see in NJ cases on occasion. Generally offered to first-time offenders and usually seeks to provide rehabilitative services to the defendant. Similar to pre-trial probation, if pre-trial intervention is successfully completed, there is no record of conviction.
Stet – This one shows up frequently in some reports out of MD. It means “to stand” or “let it stand” and signifies a motion made by the state’s attorney for a conditional, indefinite stay of all further proceedings on a particular charge. The state can bring the charges back into court if the defendant gets into further trouble or fails to live up to any terms that were agreed to within a reasonable time period after the entry of stet.
Continued Without Finding – This is another very common disposition in MA. This is a plea agreement that technically is an admission that there are sufficient facts to find the defendant guilty of the charges. It is sometimes called a CWOF (pronounced quaff) and is similar to a plea of no contest in other states. The charges can be brought back if the defendant gets into further trouble within the continued timeframe.
Deferred Adjudication – This one shows up most often in cases out of TX and is similar to pre-trial intervention. Usually reserved for minor crimes or first offenders, if the defendant stays out of trouble and completes community service, an alcohol awareness program or some other condition set by the court during the deferral period, the charges are dismissed.
Pacer U.S. Party/Case Index Being Replaced with Case Locator
The PACER Case Locator which allows you to search for court records in all district, bankruptcy, and appellate courts is now available. The Case Locator replaces the U.S. Party/Case Index and provides enhanced search and display capabilities including the ability to:
- request lists of cases for a specified date range by court type;
- conduct searches based on chapter, discharge date and dismissal date for bankruptcy cases;
- access case information for the Judicial Panel on Multidistrict Litigation;
- choose result formats, including HTML, delimited text, and XML which can be easily imported to other programs for analysis;
- change the sort order of the results displayed; and
- conduct refined searches within the results of a previous search.
Criminal Records > Ban the Box
Florence City Council Defeats Background Checks Ordinance
On January 13, 2013 Florence City Council failed to pass an ordinance that would have prohibit prohibited businesses from asking applicants about their criminal history and background when they fill out an application to work. Once the applicant made it to the interview and hiring process, the businesses would then be able to ask if the person had any criminal history.
Education Verification & Reference Checking
Institutions Whose Degrees are Illegal to Use in Texas
The Texas Penal Code (Section 32.52) prohibits the use of fraudulent or substandard degrees “in a written or oral advertisement or other promotion of a business; or with the intent to: obtain employment; obtain a license or certificate to practice a trade, profession, or occupation; obtain a promotion, a compensation or other benefit, or an increase in compensation or other benefit, in employment or in the practice of a trade, profession, or occupation; obtain admission to an educational program in this state; or gain a position in government with authority over another person, regardless of whether the actor receives compensation for the position.” Violation of this law is a Class B misdemeanor. “Fraudulent or substandard degree” means a degree conferred in Texas in violation of the Texas Education Code; conferred in another state in violation of that state’s laws; conferred in another state by an institution that was not accredited by an accreditor recognized by the Coordinating Board and that has not been approved by the Coordinating Board for its degrees to be used in Texas; or conferred outside the United States by an institution that the Coordinating Board determines is not the equivalent of an accredited or authorized degree.
How to Avoid Fraudulent References
In this sketchy internet age, companies like The Reference Store can make offers like this “Unemployed? Fired? Forced Out? Bad Reference? Create an entirely new work history using our fake reference service…” Employers and their background screening firms conducting professional references should follow these simple guidelines to avoid fraudulent references.
Staffing for Verifications
Achieving a state of equilibrium between verification volume and your capacity to process that volume is elusive at best. You can be overstaffed or understaffed on any given day due to absences, and sudden changes in volume. Here are three tips to help you manage the match of verification capacity to volume.
Health Care
Identify Your Riskiest Health Care Employees
For compliance executives at U.S. hospitals of any size, what you don’t know can definitely hurt you. With so much at stake—monetary fines, brand damage and reduced fundraising campaigns—many executives are operating from a blind spot when it comes to sanctioned health care employees. Although executives work diligently to monitor medical staff for disciplinary and adverse actions, there is no single reliable government source for sanction data for the U.S. This means either manually checking thousands of sources for each employee or taking shortcuts and hoping for the best. Moreover, state and federal data sources are often incomplete or inaccurate— making it difficult to validate the identity of sanctioned individuals. Add to this the burden of monitoring employees for new sanctions, and it’s easy to see how the riskiest professionals can slip through the cracks and pose a compliance risk.
HireRight 2013 Health Care Spotlight with Background Screening Benchmarks & Best Practices
This HireRight Health Care Spotlight analyzes employer screening practices of human resources, talent management, recruiting, security, and safety professionals in the health care industry. It explores issues and trends to help organizations evaluate their own programs, and to identify both strengths and potential areas for improvement.
Immigration and E-verify
Practical Steps to Help Ensure Proper Form I-9 Compliance
U.S. Immigration and Customs Enforcement (ICE) investigations are not just targeting organizations that knowingly employ unauthorized workers. Now they are auditing and penalizing organizations for incomplete, inaccurate or missing Form I-9s. With ICE fines totaling more than $9 million in FY2011, an increase of more than 1,200 percent in three years, Form I-9 compliance is something organizations should be taking seriously. In this white paper, learn practical steps your organization can take to help ensure Form I-9 compliance, as well as the benefits of an electronic I-9 solution
Legal Issues
Fair Credit Reporting Act (FCRA) Basics
The federal Fair Credit Reporting Act (FCRA) and several state statutes regulate employment background screening. The FCRA regulates background screens for “employment purposes” if the employer procures records or information on an individual from a background screening company such as HireRight (known in the screening industry and under the FCRA as a “consumer reporting agency”). The FCRA broadly defines the term employment purposes to include the evaluation of a job applicant for employment as well as decisions concerning promotion, reassignment or retention of an employee. The FCRA’s name may be somewhat misleading. While the FCRA does regulate employment credit checks, the scope of the law is broader than credit history information to include what is referred to as consumer report information. For example, the FCRA also regulates requests for criminal, educational, military and driving records from a consumer reporting agency, such as HireRight.
Making Sound Hiring Decisions Through the Use of Well-Tailored Background Check Procedures in a Complex Business & Regulatory Environment
You want to screen job candidates to find the best employees and to protect your company, employees, and customers. But with the EEOC and some states altering how criminal records and credit checks may be used during the hiring process, it is time to revisit your background checking policy — or time to create one. Read this white paper to learn how to help ensure your hiring and screening practices are compliant, discover blanket hiring policies that could put you at risk, explore background checking best practices, and access state-by-state guides regarding the use of arrest and conviction records and credit checks
Bill Calls for Background Checks at Utilities
A loophole in the law does not require workers hired at most power plants to undergo FBI background checks, even though a federal report warns the plants are a likely target for terrorists, Senator Charles Schumer said yesterday in unveiling legislation that would change that. Schumer cited a recent Department of Homeland Security report that found disgruntled former employees have sensitive inside information that would be sought by terrorists. The report also says current employees have been solicited by unidentified outsiders.
“Power plants and utilities present a tempting and potentially catastrophic target to extremists who are bent on wreaking havoc on the United States, which is why thorough background checks on all workers with access to the most sensitive areas of these operations are a must,” Schumer said. His bill would require FBI background checks on all employees of major power plants, he said.
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Employment Applications And Background Checks – Are You Compliant With Ever-changing Laws?
As laws continue to change, employers must ensure the employment applications and background checking processes and procedures they use are up-to-date and compliant. Currently, many employment applications ask about an applicant’s criminal history and the answers are taken into account during hiring decisions. However, a few states and cities around the country have enacted “ban the box” laws that prohibit employers from inquiring about criminal history (including asking if the applicant has ever been convicted of any crime). Even those states without “ban the box” legislation are still limited in the type of information that can be acquired during the application process. Additional changes in the law require employers to obtain authorization from applicants prior to using a third party to perform background checks and it includes certain rules about the use of credit information in hiring decisions (Fair Credit Reporting Act-FCRA). Checking applicable laws in all of the jurisdictions where employers hire employees is crucial to navigating the do’s and don’ts of the pre-employment process.
Applicant Successfully Disputes Entries on Background Report, But is Disqualified Anyway
In a recent court case, a prospective employee claimed that the employment agency, Robert Half International, Inc. (RHI), violated the FCRA (Fair Crediting Report Act) following the running of a background check on him. RHI provided the applicant a copy of his background report containing numerous criminal convictions in Minnesota, Texas and Virginia, along with his rights and notification that he had ten business days to dispute the information and submit a revised report. Despite successfully disputing his report, resulting in the removal of criminal records from Texas and Virginia, RHI had already disqualified him as an employment candidate. When the applicant argued that RHI should have waited longer to make a decision, the court ruled that the FCRA does not require a waiting period between notice and subsequent adverse action, and such a requirement would place unreasonable constraints on employers.
Credit Checks in California Now Tougher Than Ever
Effective January 1, 2012, California employers will be prohibited from obtaining consumer credit reports for purposes of evaluating an applicant for employment, reassignment, or retention without a valid reason. Credit reports can only be obtained if the person has or will have a position that is at a managerial level, involves access to confidential information, involves regular access to cash, etc.
Failure to comply could result in applicants or employees filing lawsuits seeking damages which could include court costs, loss of wages, attorneys’ fees, and when applicable, pain and suffering. In addition, courts can award additional damages up to $5,000 for each violation and any other relief it deems necessary.
Background Check Company’s Investigative Efforts On Potential Job Candidate Do Not Violate The FCRA
Plaintiff was contacted by Harrison Turnbull (“Turnbull”), a principal of Defendant Waverly Partners, LLC (“Waverly”) to discuss her interest in a general counsel position with a company outside of North Carolina. Over the next two weeks, Plaintiff faxed her resume and a list of references to Waverly, had several in-depth telephone conversations about the position, and had an in-person interview with Turnbull. Soon thereafter, Turnbull sent various forms to Plaintiff, including a Fair Credit Reporting Act (“FCRA”) consent form. Plaintiff signed and returned the form, which permitted verification of Plaintiff’s former employment. Significantly, the consent form did not permit Waverly to contact Plaintiff’s current employer, Cato. Turnbull told Plaintiff that no references would be contacted unless she was the final candidate for the job and then only the specific individuals listed as personal references would be contacted. Waverly hired Defendant AlliedBarton Security Services, LLC (AlliedBarton) to conduct a background check on Plaintiff. AlliedBarton faxed a copy of the consent form to Cato, which resulted in her firing days later. Subsequently, Waverly informed Plaintiff that she was not considered for the general counsel position. AlliedBarton moved to dismiss Plaintiff’s claim for invasion of privacy, claim for a violation of the FCRA, and a claim for unfair and deceptive trade practices. The Court granted the motion to dismiss. Plaintiff subsequently filed his Motion to Reconsider as to Plaintiff’s § 1681d(d) and § 1681b claims. The Court denied Plaintiff’s Motion.
$7 Million Awarded to Estate of Killed Driver in Truck Accident Verdict
November 10, 2011 — A Farmington, Missouri family received a $7 million verdict in their trucking accident lawsuit against defendant Dunaway Timber Company and its semi-truck driver, Morgan Quisenberry. Roger Reagan was killed when Morgan Quisenberry’s trailer went across the center line (off-tracked) while taking a curve in the roadway. Quisenberry’s trailer clipped a Jeep Cherokee; then Quisenberry’s tractor crossed the center line and struck a Kia head-on and veered directly into the cab of the semi-truck Roger Reagan was driving.
The case, tried in the Federal District Court for the Western District of Arkansas primarily involved Quisenberry’s qualifications to drive a commercial vehicle and Dunaway Timber’s failure to appropriately screen its drivers, including Quisenberry. At trial, Emison introduced evidence that Quisenberry had lied on his application and had received two license revocations. Despite these infractions, Emison showed that Dunaway Timber Company could have easily discovered Quisenberry’s previous infractions and, if Dunaway had done so, Quisenberry never should have been permitted to drive a tractor trailer. Jurors were told that Dunaway Timber could have learned about Quisenberry’s license revocations with a simple background search that took only 15 minutes and cost $15.
Indiana’s Criminal Expungement Statute
Indiana has passed a new criminal expungement law sometimes referred to as the “Second Chance Law.” The Second Chance Law allows certain classes of individuals to petition a court for an order significantly limiting most third parties’ ability to access the individuals’ prior criminal records. It also allows those duly convicted of a wide variety of crimes to restrict public access to their criminal records eight years after they successfully complete their sentence. For employers who conduct criminal background checks as part of their application process, the Second Chance Law significantly restricts their ability to discover applicants’ prior criminal conduct that may impact their suitability for employment. However, the law does contain exceptions that prohibit restricting access to records of crimes resulting in injury to persons or those classified as a Class C or higher felony.
Indiana’s Second Chance Law clearly aims to prevent employers from considering expunged/restricted criminal history information in hiring and employment decisions on the notion that certain criminal offenses should not function as barriers to employment. It imposes criminal penalties on agency employees who fail to restrict criminal records as required by the statute or who disclose criminal records in violation of the statute. Therefore, employers confronted with these circumstances should proceed with caution when making hiring or other employment decisions based on criminal convictions that are eight or more years old.
Be Cautious of How Far Back You Are Looking Into An Applicant’s Civil or Criminal History
The U.S. Department of Justice has moved to intervene to defend the constitutionality of the Fair Credit Reporting Act against a consumer reporting agency accused of violating § 605 of the Act. A woman filed suit against General Information Services, Inc. (GIS) when GIS performed a background check that included details about an incident that occurred more than seven years prior to the requested background check. According to the Act, consumer reporting agencies cannot provide adverse information, except for criminal convictions, “which antedates the report by more than seven years.”
GIS claims that the seven-year limitation violates the First Amendment of the United States Constitution, and that the Act’s prohibition is a “content- and speaker-based restriction on speech,” noting that the law does not prohibit employers from considering such information but prohibits reporting agencies from providing such information. The U.S. Government has thus intervened, taking a contrary position to protect the constitutionality of the Act’s seven-year limitation. Employers must ensure that the consumer reporting agency they use performs searches that are in compliance with the Act in order to avoid being a co-defendant in a similar suit.
New California Requirements for Disclosure/Authorization Forms
New California law regarding background screening go into effect January 1, 2012 and require revisions to employers’ disclosure/authorization forms.
Effective January 1, 2012, there is an important amendment to California Investigative Consumer Reporting Agencies Act (ICRAA), California Senate Bill 909 (SB 909), requires that employers include the background screening company’s website address on the disclosure form. This additional provision is designed to make information available to an applicant about the background check company’s privacy practices, including whether a consumer’s personal information will be ‘offshored’ or sent outside the United States.
Fair Credit Reporting Act Lawsuit Filed Against Capital One
On December 6, 2011, Nichols Kaster, PLLP, filed a lawsuit on behalf of Plaintiff Kevin Smith in the United States District Court for the District of Maryland, alleging Capital One illegally obtains background checks in violation of the Fair Credit Reporting Act (“the Act”). Plaintiff seeks to represent a class of all Capital One employees and job applicants for the past three years. The lawsuit accuses Capital One of violating the Act by burying its background check authorization in a job application including all sorts of extraneous information, and failing to provide copies of the reports when it used them to take adverse employment actions, such as refusing to hire an applicant. Employees and prospective employees may be entitled to statutory damages of between $100 and $1,000 for each violation.
Plaintiff’s attorney E. Michelle Drake explains, “Consumer Reports are notoriously inaccurate. The Fair Credit Reporting Act exists in part to ensure employees have a say in who can pull their consumer reports and have an opportunity to contest any inaccuracies that they may contain.”
Publicly Reporting Expunged Conviction Records Does Not Create Liability For Defamation
Publicly reporting expunged conviction records does not create liability for defamation if the information disclosed is true, according to the New Jersey Supreme Court . In the case, a political campaign publicized the expunged drug conviction of an opponent’s aide in a flyer.
The Court ruled that defendants in this case were entitled to assert truth as a defense to the defamation and other related tort actions, even though the plaintiff’s conviction was subject to an expungement order. Second, the plaintiff failed to establish that the flyers were not substantially accurate. Lastly, the plaintiff had no reasonable expectation of privacy that information so long in the public domain before the entry of the expungement order would be erased from the public’s mind or from papers already widely disseminated.
FTC Warns that Background Searches Via Mobile App May Violate the Fair Credit Reporting Act
The Federal Trade Commission (“FTC”) has sent warning letters to three companies that market, in total, six mobile phone applications (“Apps”) that provide users with background check reports, warning that the Apps may violate the Fair Credit Reporting Act (“FCRA”). Under the FCRA, individuals or organizations that use outside entities (such as the Apps) to procure certain background information on employees or applicants in connection with their employment (or potential employment) must comply with certain notice, authorization, and other rules. In addition, they must receive proper authorization from employees or applicants when background checks are performed. As a best practice, it is crucial to train managers regarding the FCRA and its requirements, develop policies regarding background checking procedures, and make sure that managers are aware of these procedures and that all such policies comply with applicable state credit reporting laws.
Ten Things Massachusetts Employers Should Know About Upcoming Changes in the CORI System
In August 2010, Massachusetts enacted a statute that set in motion two waves of reform in the state’s Criminal Offender Record Information (“CORI”) system. Employers already have had at least fifteen months to adjust to the “ban the box” reform that became effective in November 2010. The second wave of CORI reforms is scheduled to take effect on May 4, 2012 and employers should start preparing for the new rules now. Highlights of the new CORI system from an employer’s standpoint include: “Criminal offender record information” will have essentially the same meaning; A criminal record that has been sealed will not be accessible in the typical employment situation; A limited amount of criminal offender information in an unsealed record will continue to be available to almost anyone who requests it; An employer will be able to obtain more criminal offender information than a mere member of the general public; etc.
Senate Committee Passes Bill to Stop Pre-employment Credit Checks
The Senate Judiciary Committee has approved Senate Bill 3, the Employment Opportunity Act. The Act prohibits pre-employment credit checks that some companies use to screen candidates. Employers can only use credit report information if it is directly related to the position for which a candidate is applying, such as a money or asset management role. Employers found in violation of this law would be subject to civil penalty. The bill will now be considered by the full Senate.
“Credit scores were never intended to be used in hiring practices,” said bill sponsor, Sen. Morgan Carroll D-Aurora. “Tying credit scores with employment opportunity creates a vicious circle that unfairly punishes struggling Coloradans. We should be doing everything in our power to get citizens back to work, and this legislation ensures that we are removing unnecessary punitive barriers and helping citizens get back on their feet.”
Watching the Private Eye: A Bill to Regulate Private Investigators
HB80, a bill regulating the licensing, education and requirements to be a private investigator, has passed out of the House Governmental Affairs Committee and will now go before the full House for approval. The bill will require private investigators in the sate of Alabama to be licensed, tested and approved by a board that the HB80 will create. Presently, Alabama has no laws that oversee, regulate or offer any standard to become a private investigator. Everyone who has a business license to be a private investigator currently will be grandfathered in, but it will only allow those who have had a business license for five consecutive years be considered for the board. There are a few exceptions to the bill such as CPAs that do forensic accounting. Proponents of the bill believe that the sensitive information that private investigators acquire should only be in the hands of licensed professionals.
Proposed Law Would Expand FBI Background Checks of Private Security Officers
A bill recently introduced in the House of Representatives would allow employers to use authorized third-party screeners to conduct FBI background checks on private security officers when such checks are not available from the employer’s state. The bill–H.R. 4112, the Private Security Officer Screening Improvement Act–would amend the Private Security Officer Employment Authorization Act. Jeff Flint, NASCO’s executive director, points out the gap in the existing law that requires state agencies to conduct background checks on behalf of employers, but that many states still do not provide. “The [amended law] will dramatically increase availability of FBI criminal background checks for all private security officers,” said Flint. “And that will make the public safer.”
Federal Trade Commission Privacy Report Recommends Legislation to Regulate Data Brokers
The Federal Trade Commission (FTC), the nation’s chief privacy policy and enforcement agency, recently issued a final report – “Protecting Consumer Privacy in an Era of Rapid Change: Recommendations For Businesses and Policymakers’- urging businesses to adopt best practices to protect the privacy of American consumers and containing important recommendations regarding data brokers, giving consumers greater control over the collection and use of their personal data. While Congress considers such privacy legislation, the FTC urges individual companies and self-regulatory bodies to adopt the principles contained in the privacy framework if they have not already done so. The FTC will work to encourage consumer privacy protections by focusing on greater transparency whereby companies should disclose details about their collection and use of consumer information and provide consumers access to the data collected about them. This is crucial because information compiled by data brokers, especially criminal record data, is not always accurate. The FTC report also recommends companies to develop clear standards regarding privacy and to train their employees to follow them.
Georgia Bill Would Hide Arrest Information
A provision in sentencing reform legislation that would restrict public access to arrest records of people later cleared of charges has raised concerns among First Amendment proponents. House Bill 1176 includes an “expungement” provision that would streamline the way individuals cleared of criminal charges can get their records restricted from public view, provided a number of conditions are met. The executive director of the Georgia First Amendment Foundation said the provision will,” tilt the balance dangerously towards secrecy and away from the public’s interest in open government.” Proponents argue that the current system prevents many people who had charges dismissed from getting jobs because the information stays on their record. “We’re trying to offer a layer of protection on access to that information because it’s causing so much harm to so many individuals,” said Marissa McCall Dodson, a Georgia Justice Project. “We’re trying to make the process more transparent by allowing the public and the individuals to know which dispositions will qualify for restriction and how they can go about the process.”
Maryland “Facebook Law” Raises New Obstacles for Employers Vetting Applicants and Investigating Employees, but with Important Exceptions
Maryland is the first state to pass a law to expressly restrict employers from asking applicants and employees for social media account log-in credentials. Effective October 1, 2012 (assuming the Governor signs the law), employers are prohibited from requiring, or even asking, that applicants or employees disclose “any means for accessing,” such as a user name or password, for “any personal account or service” accessed through “computers, telephones, personal digital assistants, and other similar devices.” The Maryland law also prohibits an employer from taking or threatening any form of adverse action based on an employee’s or applicant’s refusal to provide a user name or password to a personal account. Notably, the Maryland law contains no enforcement provision. It remains to be seen through judicial interpretation whether the Act’s restrictions bar an employer from, for example, asking an employee or applicant to log into a personal account without disclosing the log-in credentials to the employer so the employer can observe the content of the personal account.
Class Action Against LexisNexis Survives
A federal judge rules LexisNexis cannot dismiss claims that its background-check service violates the Fair Credit Reporting Act (FCRA). LexisNexis Risk & Information Analytics Group offers a service called Esteem that conducts background checks and informs employers when job applicants have a history of theft or fraud. They also send letters, known as “pre-adverse action letters,” to employees or prospective employees who match their records. The FCRA gives employees the right to review such reports before their employer can take adverse action and requires CRAs to clearly and accurately disclose all information in a consumer’s file upon request. In a federal class action, two individuals claimed LexisNexis violated the FCRA by taking adverse action against them before providing them with a copy of their consumer reports and for refusing to turn over parts of their files. LexisNexis disputed this characterization in a motion to dismiss. The judge refused to dismiss both counts and found that the class can only claim punitive damages for LexisNexis’s refusal to disclose files because the action was willful.
Background Checks For School Bus Drivers Signed Into Law
Iowa Gov. Terry Branstad signed a bill into law that mandated background checks for Iowa school bus drivers that was championed by an Osage, Iowa woman’s concern for child safety. Kim Koenigs of Osage worked and advocated for the bill, taking her concerns about the lack of checks to the Iowa Department of Education. Education officials agreed to author the bill. Under the new law, background checks must be done using the dependent adult abuse, child abuse and sex abuse registries, as well as a mandatory check of Iowa Courts Online, for criminal and driving background checks. Anyone found on the registries can not be hired. The checks must be conducted every five years and paid for by the school district. School officials must also maintain documentation that demonstrates compliance.
Senator Klobuchar Seeks Legislation to Ban Employers from Getting Facebook Passwords
U.S. Senator Amy Klobuchar has announced that she will be co-sponsoring federal legislation to prohibit an employer from requiring that a current or potential employee turn over the password to a Facebook or other private online account. In recent weeks, news reports have described instances around the country where employers have demanded the Facebook passwords of job applicants as part of the hiring process. The Password Protection Act would prohibit employers from coercing job applicants or current employees to provide access to their private online systems, including Facebook, e-mail and other online storage. ”This is about the right to privacy,” said Klobuchar. “No person should be forced to reveal their private online communications just to get a job. This is another example of making sure our laws keep up with advances in technology and that fundamental values like the right to privacy are protected.”
Judge Blocks Springfield’s New E-Verify Law
A federal judge has blocked the city of Springfield from enforcing a voter-approved law requiring businesses to check employees’ immigration status using the federal E-Verify system. U.S. District Judge Richard Dorr issued a preliminary injunction on the so-called E-Verify ordinance. The ruling came about after three companies and a Springfield businessman filed suit alleging the ordinance is unconstitutional and a violation of state and federal laws. The ordinance was drafted by the Ozarks Minuteman and passed by voters in February. Several Springfield officials had said they were hoping for a court challenge because of questions about its legality and how to enforce it. Dorr said he was granting the preliminary injunction because the plaintiffs would probably succeed on the merits of their complaint.
FTC Joins Department of Justice and Consumer Financial Protection Bureau in Filing Brief Supporting the Constitutionality of the Fair Credit Reporting Act
The Federal Trade Commission has joined the Department of Justice and the Consumer Financial Protection Bureau in filing a memorandum brief in support of the constitutionality of the Fair Credit Reporting Act (FCRA), the law designed to protect the privacy of credit report information and ensure that the information supplied by consumer reporting agencies (CRAs) is as accurate as possible. In the filing, the CRAs urge a federal district court to uphold an important provision of the FCRA, which has protected consumers’ privacy for more than 40 years. The provision in question bars CRAs from disclosing individuals’ arrest records or other adverse information that is more than seven years old. The brief refutes GIS’s argument that this FCRA protection is an unconstitutional restriction of free speech and concludes that the court should not invalidate the FCRA provision, as it “directly advances the government’s substantial interest in protecting individuals’ privacy,” while also accommodating the interest of businesses.
Federal Court: FCRA Does Not Apply To Independent Contractor Relationships
Here is one more potential advantage of using independent contractors rather than employers that so far has flown below the radar screen. According to the a Wisconsin federal district court in the case of Lamson vs. EMS Energy Marketing Service, Inc. the Fair Credit Reporting Act’s disclosure obligations do not apply to independent contractor relationships. Because EMS did not obtain the consumer report to evaluate Lamson for a position as an employee of EMS, the court granted EMS’s summary judgment motion.
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Governor Haslam Signs Drug Testing Bill for Welfare Recipients Into Law
Governor Bill Haslam has signed several pieces of legislation, including a measure to require drug testing as a condition for receiving welfare. The legislation — which passed the Senate 24-9 and 73-17 in the House — requires new welfare applicants to undergo a special screening process. If suspicion were raised after the screening, then the applicant would be drug tested. The proposal differs from an original version that would have required blanket testing. The state’s attorney general opined that approach would violate applicants’ rights not to be drug tested unless there is suspicion they are using drugs. Haslam told reporters that he’s comfortable with the legislation because the Department of Human Services will develop the rules for the testing, and the state attorney general must make sure the process is constitutional.
California Bill SB 1384 Would Authorize Consumers to Place Security Freezes on Consumer Reports
While existing law allows California consumers to place security freezes on their credit files maintained by the three major credit reporting agencies: Equifax, Experian, and TransUnion, new legislation – Senate Bill 1384 (SB 1384) ‘Consumer Reporting Agencies Act’ – would authorize consumers to place similar security freezes on certain other consumer reports containing private financial information. SB 1384 defines a “nationwide specialty consumer reporting agency” and “consumer file” for purposes of California law and if passed, would amend several sections of the Civil Code relating to consumer information privacy. The bill could potentially include background screening firms that maintain ongoing databases of past employment history of job applicants. “The plain language of the bill does not appear to directly impact background screening firms that work directly with employers and only gather employment information on an applicant when a request for a background checks made,” according to background check expert Lester Rosen. “However, there can be an impact if a consumer freezes their past employment history file, which could potentially delay obtaining that information.”
Background Check Into Workers’ Comp Claims Isn’t Subject To Fair Credit Reporting Act
Good news for employers that check workers’ compensation claims against an applicant’s claim he’s never been injured on the job: You don’t have to inform him where you got the information before you take action because workers’ comp checks aren’t background investigations subject to the federal Fair Credit Reporting Act (FCRA). This was the decision of the 5th Circuit Court of Appeals in the case of Bachman v. Donahoe, No. 11-11060, 5th Cir., 2012. It said the investigation wasn’t a consumer report because his past injuries weren’t related to his credit worthiness, character, general reputation or mode of living. (Bachman v. Donahoe, No. 11-11060, 5th Cir., 2012)
Sixth Circuit Dismisses Class Action Over Personal Information Release
A federal appeals court has upheld the dismissal of a proposed class action lawsuit over the distribution of personal information from a state’s motor vehicle records. The Kentucky plaintiffs claimed that Ascom Transport System Inc. violated the federal Driver’s Privacy Protection Act (DPPA) and their common law right to privacy when the company obtained in bulk and then used, resold and disclosed their personal information contained in the state’s motor vehicle records without a “permissible purpose” under the act. The district court ruled in December 2010 that the bulk purchase of such motor vehicle records without a “specific need for every record” does not violate the DPPA, and ultimately granted Ascom’s motion to dismiss the plaintiffs’ third amended complaint. When the Kentucky plaintiffs appealed, the Sixth Circuit affirmed the lower court’s ruling. The Sixth Circuit held that obtaining personal information solely for the purpose of reselling such information is allowed under the DPPA — so long as the information is used for purposes permitted. In addition, the plaintiffs’ claim of common law right to privacy failed as a matter of law.
New Reasons to Take a Fresh Look at your Background Check Practices
This an opportune time for employers to re-evaluate their background check practices. On April 25, 2012, the EEOC issued an updated Enforcement Guidance to employers on how to properly consider job applicants’ criminal histories under Title VII of the Civil Rights Act of 1964 (Title VII). The revamped guidelines reinforce the EEOC’s long-held position that employers’ reliance on applicants’ criminal background information may have a disparate impact on individuals because of their race or national origin, thereby violating Title VII. The EEOC’s Enforcement Guidance contains some best practice recommendations for employers, such as: eliminating blanket policies or practices that automatically exclude individuals from employment based on any criminal record. In addition, recent Fair Credit Reporting Act (FCRA) class action cases highlight the need for close attention to the manner in which employers obtain consent from employees prior to initiating a background check. The FCRA requires that employers notify individuals of their intent to obtain a background report on a form that consists “solely” of that notice.
Password Protection Act of 2012: A Good Start Against Employer Snooping
Senator Richard Blumenthal (D-CT), Representative Martin Heinrich (D-NM) and a number of cosponsors have filed the Password Protection Act of 2012 in the Senate and House to prevent employers from strong-arming employers and job applicants into sharing information from their personal social networking accounts. The good news is that the PPA is sweeping in scope in that it applies to any situation when an employer coerces an employee into providing access to information held on any computer that isn’t owned or controlled by the employer. The bad news is that it doesn’t provide the full level of necessary protection. The most glaring omission is the lack of coverage for students. In addition, the legislation includes unnecessary exemptions for government employees or employees who work with children under age 13 and whole classes of workers who come into contact with classified information, including soldiers. Further, the legislation doesn’t make clear that states have a role to play.
Spokeo Fined $800,000 for Marketing Consumer Profiles to Employers Without Complying with FCRA
In its first enforcement action under the Fair Credit Reporting Act (FCRA) to address the sale of Internet and social media data in the employment screening context, the Federal Trade Commission (FTC) has announced that it had entered into a $800,000 settlement with an online data broker, Spokeo, for allegedly marketing consumer profiles to employers and recruiters without complying with the requirements of FCRA. In addition, Spokeo settled charges that it violated Section 5 of the FTC Act by posting surreptitious endorsements of its service under the names of others. According to the FTC’s complaint, Spokeo collected personal information about consumers from hundreds of online and offline data sources, including social networks, merged that information into detailed personal profiles and marketed these profiles to businesses. Despite Spokeo having a disclaimer stating that it was not a consumer reporting agency subject to FCRA, the FTC disagreed. Therefore, because Spokeo did not comply with the obligations of FCRA-covered entities, it was subject to statutory penalties under FCRA of up to $3,500 per violation.
Bill Introduced in Ohio Legislature to Restrict Employer Social Media Password Inquiries
State Senator Charleta Tavares of Columbus has introduced a bill that would prohibit employers from asking applicants or employees for their social media password. The bill follows a trend started in Maryland and followed by at least 11 other states (plus Congress) that would prohibit this employer practice. Though this type of legislation seems to be “trending” nationwide, the examples of employers that actually require their applicants or employees to turn over their passwords are actually few and far between and do not necessarily merit a legislative fix. In most industries, employers don’t have any real need or obligation to look through anything other than what the individual makes public through their chosen privacy settings. In those limited instances where an employer may have a legitimate need to inquire further — think law enforcement, financial sector and daycare settings, for instance — they should be able to ask applicants for access to their Facebook pages. It’s up to the applicant to decide whether to provide it.
Vermont Becomes the Eighth State to Restrict the Use of Credit Reports for Employment Purposes
On May 17, 2012, Vermont Governor Peter Shumlin signed Vermont Act No. 154 (S. 95), which prohibits employers, subject to certain exceptions, from using or inquiring into an applicant or employee’s credit report or “credit history” for employment purposes. The legislature stated that the new law was necessary because “information contained in a credit report has no correlation to job performance” and “credit reports do not provide meaningful insight into a candidate’s character, responsibility, or prospective job performance.” Effective July 1, 2012, Vermont is the eighth state to regulate the use of credit-related information for employment purposes, following on the heels of laws enacted in California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington. Employers who use credit reports for employment purposes in any of these eight states therefore should review and, if appropriate, modify their policies for compliance. All employers should continue to stay abreast of additional developments in this dynamic area of employment law.
Medical Marijuana Use Not Protected by ADA: Appeals Court
California cities are not violating the Americans with Disabilities Act when they crack down on marijuana dispensers, said a federal appellate court in a case brought by disabled California residents. The lawsuit in Marla James vs. the City of Costa Mesa was brought by severely disabled plaintiffs who said conventional medications had not alleviated the pain caused by their impairments, according to the May 21 ruling by the 9th U.S. Circuit Court of Appeals in San Francisco. The plaintiffs obtain medical marijuana, which is permitted under state law, through collectives in Costa Mesa, California, and Lake Forest, California, but these cities have taken steps to close marijuana dispensing facilities that operate within their boundaries, according to the ruling. The plaintiffs charge the cities’ actions violate Title II of the ADA, which prohibits discrimination in providing public services.
“We also acknowledge that Californians embraced marijuana as an effective treatment for individuals like the plaintiffs who face debilitating pain. Congress has made clear, however, that the ADA defines ‘illegal drug use’ by reference to federal, rather than state, law, and federal law does not authorize the plaintiffs’ medical marijuana use. We therefore necessarily conclude that the plaintiffs’ medical marijuana use is not protected by the ADA.”
“The case doesn’t change things for employers,” but “it does strike a blow against the expansion of medical marijuana rights” for employees as more states pass laws permitting medical marijuana’s use, said Mr. Valenza.
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Indiana Passes New Legislation Restricting Criminal History Information Reported in Background Checks
Indiana is the latest state to past legislation restricting criminal history reporting. Indiana House Bill 1033, which, starting July 1, 2012, will, in part: (1) prohibit certain pre-employment inquiries; (2) restrict the types of criminal history information that employers and background report providers (known as “consumer reporting agencies” or CRAs) can obtain from Indiana state court clerks; and (3) restrict the types of criminal history information that CRAs can report to employers in background reports.
The law provides that, effective July 1, 2012, residents of Indiana with restricted or sealed criminal records may legally state on an “application for employment or any other document” that they have not been adjudicated, arrested or convicted of the offense recorded in the restricted records. In addition, covered employers will be prohibited from asking an “employee, contract employee, or applicant” about sealed and restricted criminal records. The law does not define the term “employer,” and does not specifically address what it means for applicants and employees to be able to “legally” state on documents that they do not have certain previous criminal records.
Also effective July 1, 2012, the law will restrict information that individuals and businesses such as employers and CRAs can obtain from Indiana state court clerks.
New Jersey Senate Votes to Restrict Use of Credit Checks
Seven states have implemented laws limiting the use of credit checks: California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington. [Indiana] Nineteen other states and the District of Columbia are considering similar legislation. New Jersey may be the eighth state to prohibit the use of credit checks in the employment process. The New Jersey Senate passed a bill on May 31, 2012, that would prohibit employers from performing credit checks on job applicants and employees. There are limited exceptions to this prohibition for job positions that, by law, require credit checks, as well as jobs where a credit history is a bona fide occupational requirement, including those that oversee the company’s financial controls, have access to assets of the business or customers, or use expense accounts for travel or entertainment. Law enforcement and security positions are also exempt from the prohibition. The exceptions, however, are narrowly drawn and specifically exclude retail cashier positions even though employees in these positions deal with cash and credit transactions on a daily basis.
FTC Action Against Wyndham May Provide First Fully Litigated Section 5 Privacy/Security Case
The FTC has filed a complaint against Wyndham Worldwide Corporation, a global hotel and resort company, and three of its subsidiaries for violation of Section 5 of the FTC Act. If this case goes to trial, it will be the first privacy/security matter fully litigated under Section 5. The Commission brought the case in the U.S. District Court for the District of Arizona alleging “failure to maintain reasonable and appropriate data security for consumers’ sensitive personal data” after Wyndham faced three data breaches in less than two years. The FTC claims this resulted in over $10.6 million in fraud loss. According to the complaint, Wyndham’s inadequate security procedures enabled intruders to install “memory-scraping” malware to access payment card data, and to access files, leading to the compromise of more than 500,000 payment card accounts. The FTC claims Wyndham knew its vulnerabilities, particularly after the first breach, and yet made way for the subsequent breaches by failing to remedy those vulnerabilities.
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, and Washington as jurisdictions that restrict an employer’s right to obtain and use credit information for making employment decisions. Under the new law, Vermont employer are restricted in their ability to inquire about or use an applicant’s or employee’s credit report or credit history with respect to employment, compensation, or a term, condition, or privilege of employment.
Illinois and Federal Legislation to Restrict Employer Access to Social Networking Log-in Credentials
It was recently announced that Governor Quinn will sign legislation that will amend Illinois’ Right to Privacy in the Workplace Act, 820 ILCS 55/1 et seq. (the Act), to prohibit employers from requesting or requiring employees and applicants for employment to disclose their log-in credentials for or to grant access to their social media accounts. Once the legislation has been signed, Illinois will be the second state in the country (after Maryland) to prohibit employers from requesting or requiring social networking log-in credentials from applicants and employees.
The legislation will amend Section 55/10 of the Act, entitled “Prohibited Inquiries.”
New Legislation Restricting Criminal History Information Reported In Background Checks
Starting July 1, 2012, Indiana House Bill 1033, will, in part: (1) prohibit certain pre-employment inquiries; (2) restrict the types of criminal history information that employers and background report providers (known as “consumer reporting agencies” or CRAs) can obtain from Indiana state court clerks; and (3) restrict the types of criminal history information that CRAs can report to employers in background reports.
The law provides that, effective July 1, 2012, residents of Indiana with restricted or sealed criminal records may legally state on an “application for employment or any other document” that they have not been adjudicated, arrested or convicted of the offense recorded in the restricted records.
Also effective July 1, 2012, the law will restrict information that individuals and businesses such as employers and CRAs can obtain from Indiana state court clerks.
Effective July 1, 2013, the law also will restrict information that “criminal history providers” can report to others.
Employer Not Required To Conduct Background Check, and Not Liable To Customer Who Was Pistol-Whipped by Employee
In Harris v. KFC U.S. Properties, Inc., a federal district court in Pennsylvania ruled that the operator of a Kentucky Fried Chicken outlet in Philadelphia was not liable to a customer who was pistol-whipped by a store clerk. In the lawsuit filed Harris claimed that KFC was negligent in not conducting a background check, and should have known that the assailant had a propensity for violence. KFC had a policy prohibiting employees from bringing guns or other weapons to the workplace.
KFC only conducted criminal history checks of candidates for management positions. Rejecting Harris’ claim, the court held that KFC was not legally required to conduct a criminal history check for store clerks. Further, if KFC had conducted a background check, the records would have revealed that employee had two prior convictions for nonviolent crimes from over five years ago. Under such circumstances, KFC was not legally on notice that the employee would bring a gun to work and pistol-whip a customer.
Don’t Screen Out State Laws When Hiring
A recent decision from the Northern District of Illinois serves as a reminder to employers to consider both federal and state laws regarding pre-employment screening when making hiring decisions. In Stratton v. Merrill Lynch, 2012 U.S. Dist. LEXIS 60426, 2012 WL 1533456 (N.D. Ill. Apr. 25, 2012), the court determined that the Federal Deposit Insurance Act (FDIA) did not preempt the Illinois Human Rights Act, 775 ILCS 5/2-103, which prohibits employers from using the fact of an arrest as a basis for taking an adverse employment action. The FDIA § 1829 prohibits any individual who has been convicted of any crime involving dishonesty, breach of trust, or money laundering from institutional affiliation with any insured depository institution.
Stating that “[n]othing in § 1829 demonstrates a Congressional intent to completely preempt state civil rights employment laws,” the Court remanded the case to state court.
In light of this decision, employers are encouraged to ensure their policies comply with all applicable laws concerning pre-employment screening. Federal laws will not always prevent the application of state laws, which may contain different restrictions on information permissible to use in making employment decisions.
New Ohio Law Should Make it Easier for Criminal Convicts to Obtain Employment
A lengthy and complicated new law enacted by the Ohio legislature includes provisions that will make it easier for individuals with conviction histories to obtain employment and occupational licenses. Senate Bill 337 amends several Ohio statutes relating to collateral sanctions for criminal offenses by creating certificates of qualification for employment, reducing licensing restrictions for certain fields and expanding courts’ authority to seal criminal records. A collateral sanction is a penalty, disability, or disadvantage that is related to employment or occupational licensing as a result of the individual’s conviction of, or plea of guilty to, an offense. Presumably, the relaxing of standards for sealing criminal records will render background checks for criminal convictions less reliable. The new law enables an individual who is subject to a collateral sanction to obtain a certificate of qualification for employment that will provide relief from certain bars on employment. The law also provides that an employer that knew of the certificate at the time of hiring will have immunity from liability as to a claim brought against it alleging harm due to the individual’s alleged negligent hiring.
PA Bill Will Protect Privacy of Employee Social Media Passwords
On June 18, 2012, the Pennsylvania House of Representatives introduced the Social Media Privacy Protection Act, which would protect the privacy of employee online user names and passwords. The bill provides that an “employer may not request or require that an employee or prospective employee disclose any user name, password or other means for accessing a private or personal social media account, service or Internet website.” Employers may not discipline, penalize, or threaten an employee for refusing to provide this information, nor can they refuse to hire any prospective employee as a result of the prospective employee’s refusal to disclose this information. Those who violate these rules face a civil penalty of up to $5,000 in addition to reimbursement for reasonable attorney fees.
How to Avoid Liability Under the New EEOC Guidelines Governing the Use of Criminal Background Information
Employers must now be wary of improperly using criminal background information to exclude candidates and employees. Following a $31 million settlement with a global beverage company for its strict policy excluding anyone with a criminal record from employment, the EEOC recently issued new, comprehensive guidelines solidifying its long-held position that improper use of criminal background information in making employment decisions could constitute unlawful race discrimination under Title VII. As a result, employers may feel stuck choosing between potential liability under Title VII for screening employees and applicants in good faith, or risking liability for negligent hiring if they neglect to perform criminal background checks or to monitor employees with criminal backgrounds. It is crucial for employers to develop a non-discriminatory policy as it relates to criminal background checks.
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New York Tightens Protections on Social Security Numbers
A person may not be required to disclose or furnish his or her Social Security Number (SSN) for any purpose under a new law signed by New York Governor, Andrew Cuomo. The new law safeguarding SSNs applies to employers and certain other entities in the state and becomes effective December 12, 2012. Businesses must review their practices with employees, customers and other individuals in situations where all or a part of the Social Security Number is involved. The law does not provide for a private right of action; the State Attorney General enforces it. A civil penalty of not more the $500 per violation may be imposed for a first offense, $1,000 for a second offense. However, the law suggests that so long as reasonable measures have been adopted to avoid a violation, unintentional, bona fide errors will not result in penalties.
How to Minimize Potential Liability for Employment References in Minnesota
Minnesota law provides protection to employers who disclose certain types of information in response to requests for employment references. If an employer stays within the confines of the statute, a current or former employee must make a heightened evidentiary showing to prevail on a lawsuit against the employer related to the disclosure. With limited exceptions, in order to maintain a cause of action against an employer, a current or former employee must be able to prove by clear and convincing evidence that: (1) the information was false and defamatory; and (2) the employer knew or should have known the information was false and acted with malicious intent to injure the current or former employee. Employers can minimize potential liability for employment references by limiting their disclosures to include only the information that is authorized under the statute.
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The EEOC is Ordered to Show What’s Behind the Agency’s Curtain in Background Checking Suit
Recently, in EEOC v. Freeman, the U.S. District Court for the District of Maryland halted EEOC’s efforts to avoid depositions of its officials to inquire about their use of criminal background checks and credit histories in the
EEOC’s own hiring practices. In this case, the EEOC brought suit against Defendant alleging an on going, nationwide pattern or practice of discrimination against African-American, Hispanic, and male job applicants based on the use of criminal background checks. Now, according to Magistrate Judge Charles B. Day, Defendant may compel EEOC officials to testify about the agency’s own practices on the issue for which this suit is pending. The ruling is the second such decision to compel the EEOC to provide discovery about its own personnel practices. The Magistrate Judge’s ruling is an important development in background checking law and comes on the heels of legislation that implements limits on when private and public sector employers can use consumer credit reports and background checks for employment screening purposes.
New Background Screening Rules For Minnesota Collectors
The Minnesota Department of Commerce has expanded its criminal background check requirements for debt collectors, effective Aug. 1.
Under Minn. Stat. § 332.35, as amended by H.F. 2335, no registration or license will be issued for a collector if, within the past five years, the individual has:
. Been convicted in any court of fraud or felony;
. Been convicted of any misdemeanor involving identity theft or other financial crimes;
. Been unable to certify whether a civil judgment has been entered against the individual; or
. Had a license to practice law revoked or involuntarily suspended.
A licensed Minnesota collection agency must establish procedures to follow when screening an individual debt collector applicant for initial registration and at renewal.
California (Surprisingly) Becomes First State to Take a More Balanced Approach to Social Media “Password Protection” Laws
California’s legislature has sent to the governor for signature the nation’s third “password protection” law. Unlike the preceding Maryland and Illinois laws, California’s pending statute takes into account employers’ legitimate business interests by not imposing a blanket prohibition on all employer requests for personal social media login credentials. In this way, California’s bill adopts a more balanced and reasonable approach, which also permits employers to request that an employee divulge personal social media believed to be relevant to an investigation of allegations of employee misconduct. However, this exception does not apply to job applicants. In addition, employers remain barred from asking current employees to disclose their social media login credentials or to permit the employer to “shoulder surf.”
Dollar General’s Use of Criminal Background Check Faces EEOC Scrutiny
Tennessee-based Dollar General Corp. says it could be hit with an Equal Employment Opportunities Commission (EEOC) lawsuit over the retailer’s criminal background check policies. The EEOC has alleged that the company’s criminal background check policy has a “disparate impact” on black job candidates and employees, a violation of the Civil Rights Act of 1964. Dollar General Corp.’s policy, “excludes from employment individuals with certain criminal convictions for specified periods,” according to the company’s filing. In general, the EEOC considers broad blanketed exclusions on any individuals with an arrest or criminal history to be in violation of federal law. The EEOC recommends companies review and revise their background policies and take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position.
Facebook Privacy Protection Bills Pass New Jersey Senate Committee
In New Jersey, a bill to protect the privacy of job seekers has passed through a Senate committee and now moves to the full Senate for a vote, NJ 101.5 reports. S-1898 would prohibit employers from requiring applicants to provide passwords or access to private online accounts. Co-sponsor of S-1898 Sen. Kevin O’Toole (R-40), said “. “By no means should an employer be able to forcibly access such a broad scope of personal information against an applicant’s will. There are plenty of other steps in a job application process for employers to gain a profound understanding of an applicant’s experience, fitness and personality.”
In June, the New Jersey Assembly passed a similar bill.
U.S. Supreme Court to Hear Case About State Drivers License Agencies Selling Personal Info
The U.S. Supreme Court has agreed to hear a case in which a driver’s license agency sold information about drivers such as home address, name and age. Several states including Florida have been selling DMV records, either
under the cloak of freedom of information or to help support the state’s falling revenues.
While on the surface this case does not deal directly with background screening practices it may have implications worth keeping an eye on. This case deals with three South Carolinians who objected to solicitations from lawyers to join a lawsuit against car dealers. At issue is whether lawyers may use information gleaned from South Carolina driver records, which they obtained by filing open records requests. A federal law aimed at protecting driver records has an exception for lawsuits and the court will determine whether the lawyers’ actions qualify.
Similarly, in another case in Florida, Kehoe v. Fidelity Bank, the 11th Circuit Court of Appeals has reversed a lower court and held that individuals suing to recover for violations under the Drivers Privacy Protection Act do not need to demonstrate actual harm in order to recover monetary damages. The American Civil Liberties Union of Florida, has submitted an amicus brief in the case arguing that individuals are entitled to damages under the law when businesses or data brokers intentionally access motor vehicle information. For more information, see EPIC’s Kehoe v. Fidelity Page. (Sept. 1, 2004)
So far, Florida has sold more than 3 million names and addresses to marketing companies and data-mining companies such as LexisNexis, which often produce reports about you without your knowledge or ability to contest the accuracy of the information and is used for background check by Insurance companies when handling claims, and by employers who are considering hiring you.
New Requirements for NJ Employers and for Employers Conducting Business in Newark, NJ
The State of New Jersey has introduced a new requirement for employers with 50 or more employees in New Jersey to post and distribute to employees a notice that State and federal law provides for gender pay equity and prohibits wage discrimination based on gender. The law goes into effect in November. Effective November 18, 2012, the City of Newark will impose restrictions on employers conducting hiring in the City with regard to the use of criminal background checks for job applicants. Employers are prohibited from (1) conducting pre-application criminal background checks and inquiries and (2) denying employment based on the results of a criminal background check conducted post-offer unless the employer first conducted an individualized analysis of the criminal background using factors listed in the new Ordinance. An employer may discuss an applicant’s criminal background pre-offer if the applicant discloses his/her criminal history voluntarily and without solicitation. Penalties will range between $500 and $1000 per violation.
May Employers Require Job Applicants To Provide Home Addresses?
Some employment applications require job applicants to provide a physical home address, and state that a P.O. Box will not be accepted. This may be (or soon become) illegal under the latest development in employment law: laws prohibiting discrimination against the homeless. Earlier this year, Rhode Island passed into law the first “Homeless Bill of Rights” which makes it unlawful to discriminate against an employee or applicant “due to his or her lack of a permanent mailing address, or his or her mailing address being that of a shelter or social service provider.” In other words, an applicant cannot be refused employment simply because he or she does not provide an actual home address. Homeless advocates are pushing for similar legislation in other states. For instance, a California town recently passed a resolution urging the state legislature to enact a law that incorporates Rhode Island’s protections, but goes a step further by expressly prohibiting discrimination against an applicant or employee for providing a P.O. Box as his or her address.
Background Check Legislation Takes Huge Step Forward in U.S. Senate Judiciary Committee
The Electronic Security Association (ESA) is pleased to announce that a major legislative priority for the association – gaining access to the FBI’s database for criminal background checks of potential security industry employees – has cleared a major hurdle in the U.S. Senate. The Senate Judiciary Committee approved language from the “Electronic Life Safety and Security Systems Federal Background Check Act” as an amendment to another bill, the “Child Protection Improvements Act.” The entire measure is expected to head to the floor of the Senate, where it can be scheduled for a vote. If the bill passes the Senate, it would then move to the House for a vote before it could move to President Obama for signature into law. This bill is the culmination of years of intensive ESA efforts to give electronic security companies the same access to background checks that is currently available to other industries, including banks, credit unions, aviation, and nursing and home healthcare.
New Development with FCRA -Required Forms
With the January 1, 2013 deadline for using the new CFPB model FCRA forms on the horizon, the CFPB apparently took another look at those forms and realized that they contained a few glitches. On November 14, the CFPB published a notice in the Federal Register correcting various typos and technical errors, effective immediately. The forms in question, the Summary of Consumer Identity Theft Rights, Summary of Consumer Rights, Notice of Furnisher Responsibilities, and Notice of User Responsibilities, appear, respectively, in Appendices I, K, M and N of Regulation V, which the CFPB issued back on December 21, 2011.
Take Privacy Seriously – Why the Anne Marie Rasmusson Case Matters to Employers
The $1 million-plus settlement in the Anne Marie Rasmusson case is a costly example of why employers need to make certain that their employees do not abuse their access to confidential information. Rasmusson, a former St. Paul police officer, filed a lawsuit against numerous Minnesota cities and police officers in March of 2012 alleging that her driver’s license information was improperly accessed 425 times by 104 police officers between 2007 and 2011. Rasmusson’s complaint asserted claims arising under the Driver’s Privacy Protection Act of 1994, as well as claims for invasion of privacy. Many police officers who accessed Rasmusson’s data acknowledged that they did not have legitimate reasons to do so. The overall theme of the lawsuit was that the various police departments and officers involved allowed a culture to develop in which her private data was not protected and was routinely accessed for illegitimate reasons. While most employers do not have employees who have access to driver’s license data, many do have employees who have access to other private and confidential data. Employers who fail to ensure that strong policies and procedures are in place to prevent employee abuse of confidential data may be subject to significant liability.
DOT Reiterates that Marijuana Use by Safety-Sensitive Transportation Employees is Not Authorized, Regardless of Recent Passage of State Recreational Marijuana Use Laws
The U.S. Department of Transportation’s (DOT) Office of Drug and Alcohol Policy Compliance has issued a Notice to address the recent passage of state initiatives purporting to legalize marijuana use for recreational purposes. The DOT requires testing of applicants and employees in safety-sensitive transportation positions for marijuana, cocaine, opiates, amphetamines, and phencyclidine. Applicants must be drug tested before they begin performing DOT-covered safety-sensitive duties, and employees must be drug tested in certain circumstances, including following an accident, randomly, and when reasonable suspicion of drug use exists. During that review process, the test subject is permitted to provide the medical review officer (MRO) with information that would explain the positive test result, such as a prescription. If the test subject provides a legitimate medical explanation for the confirmed positive test result, then the MRO will report the test result to the (prospective) employer as verified negative. If the test subject does not provide a legitimate medical explanation, he or she must be removed from safety-sensitive duties and referred to a substance abuse professional for evaluation. Applicants for and employees in safety-sensitive transportation positions will not be allowed to explain away a confirmed positive test for marijuana based on recreational or medical use purportedly authorized by state law.
FTC to Study Data Broker Industry’s Collection and Use of Consumer Data
The Federal Trade Commission (FTC) issued orders requiring nine data brokerage companies to provide the agency with information about how they collect and use data about consumers. The agency will use the information to study privacy practices in the data broker industry and to make recommendations on improved privacy practices. Earlier this year, the FTC called on the data broker industry to improve the transparency of its practices as part of a Commission report. In the Privacy Report, the FTC set forth a voluntary framework of best practices for businesses based on the concepts of privacy by design, consumer control, and increased transparency for the collection and use of consumer data. The Report noted that while data brokers collect, maintain, and sell a wealth of information about consumers, they often do not interact directly with consumers. Rather, they get information from public records and purchase information from other companies. As a result, consumers are often unaware of the existence of data brokers as well as the purposes for which they collect and use consumers’ data. There are no current laws requiring data brokers to maintain the privacy of consumer data unless they use that data for credit, employment, insurance, housing, or other similar purposes.
Four Words the Fair Credit Reporting Act has Class Action Plaintiffs and Their Lawyers Repeating: “Show Me the Money!”
Over the past few years, the Fair Credit Reporting Act (FCRA), the federal law mandating, among other things, procedures and reporting requirements employers must follow when conducting background checks through a third party vendor, has become a hot-button employment issue, and a lucrative one for class action plaintiff attorneys. Similar to other class actions involving technical violations, like wage and hour and “seating” lawsuits, plaintiff class action attorneys have latched on to technical requirements in the law providing for statutory damages when violated. The motivation driving these lawsuits? The promise of easy money. With the potential to collect statutory damages, the possibility of punitive damages, and the ability to obtain attorneys’ fees and costs, the FCRA can be a class action plaintiff’s lawyer’s dream. Class action plaintiffs and their attorneys have increased the filing of class action lawsuits alleging willful violations of the FCRA, and this trend is not slowing. Employers should take steps to ensure compliance with the FCRA to reduce the risk of class action claims seeking statutory penalties.
New Law on Expunging Records Helps Michigan’s Juvenile Offenders Make a Clean Start
Juvenile offenders can now get their criminal records expunged under a bill that received rare, unanimous agreement in the Michigan legislature. The law allows juvenile offenders to request that their records be cleared if they have three or fewer misdemeanors or one felony conviction. Prior rules allowed for the request on only one misdemeanor. Offenders will also be able to ask that their records be cleared one year after they’ve completed their sentence and probation, instead of the current five years. If they committed a crime that would be punishable by life in prison in the adult court system, they aren’t eligible to get their record cleared. People with juvenile records often struggle with finding jobs, getting into college or entering the military due to their records, even if their records have been clean for years. ”Everyone is so gun-shy on this because they think we need to be tough on crime, and it’s politically correct to be tough on crime,” said the law’s sponsor, Rep. Joe Haveman. “But we can certainly look at alternatives if people are behaving themselves. Then they can be paying taxes instead of draining taxes.”
Use of Credit Information in Employment 2012 Legislation
As of November 16, 2012 40 bills in 19 states and the District of Columbia have introduced or have pending in legislative session. Out of the total 41 bills, 40 address restrictions on the use of credit information in employment decisions. The total number of states that limit employers’ use of credit information in employment is now eight: California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington. Washington enacted legislation in 2007, Hawaii enacted legislation in 2009, Illinois and Oregon enacted legislation in 2010. California , Connecticut and Maryland enacted legislation in 2011. Vermont enacted its legislation in 2012.
Is A Convicted Felon Absolutely Barred From Practicing or Engaging In Any Trade, Occupation, or Profession For Which a License, Permit, Or Certificate Is Required To Be Issued By The State Of Louisiana?
According to Act No. 486, which amended and reenacted LSA-R.S. 37:2950(A), a convicted felon shall no longer be disqualified, or held ineligible to practice or engage in any trade, occupation, or profession for which a license, permit, or certificate is required to be issued by Louisiana, or any of its agencies or political subdivisions, unless such a conviction “directly relates to the position of employment sought, or to the specific occupation, trade, or profession for which the license, permit, or certificate is sought.”.
Marketers of Criminal Background Screening Reports To Settle FTC Charges They Violated Fair Credit Reporting Act
According to an administrative complaint filed by the FTC, Filiquarian Publishing LLC, Choice Level LLC, and their CEO, Joshua Linsk, failed to ensure that the information they sold was accurate and would be used only for legally permissible purposes. The FTC also alleged that they failed to tell users of their criminal record reports about their obligations under the FCRA, including the requirement to notify consumers if an adverse action was taken against them based on a report. According to the FTC, Filiquarian claimed consumers could use its mobile apps to access hundreds of thousands of criminal records and conduct searches on potential employees. One app stated, “Are you hiring somebody and wanting to quickly find out if they have a record?
The settlement order bars the respondents from furnishing a consumer report to anyone they do not have reason to believe has a “permissible purpose” to use the report, failing to take reasonable steps to ensure the maximum possible accuracy of the information conveyed in its reports, and failing to provide users of its reports with information about their obligations under the FCRA.
Social media bills would defend online privacy
With the emergence of new technology, legislators have filed a bevy of bills that could change the way some Texans use social media. The measures largely stem from lawmakers’ concerns about privacy and safety for Texans who spend an increasingly large portion of their lives online.
Helen Giddings (D-Dallas) proposal, House Bill 318, would “prohibit employers from requiring or requesting access to personal accounts of employees or job applicants through electronic communication devices.” Her proposal would include personal cellphones, computers and social media accounts, such as Facebook or Twitter.
Her bill would protect personal accounts of employees, but it would not apply to devices owned by a company that the employee uses to conduct business.
Lawmakers in Missouri and Vermont, along with Texas, have filed social media measures this year.
What Employers Need to Know About New York’s Beefed-up Social Security Number Protection Law
New York Governor Andrew Cuomo recently signed an amendment to the state’s Social Security Number Protection Law. The amendment is designed to strengthen consumer privacy and protect against identify theft. The amendment prohibits a person, firm, partnership or other business entity from requiring an individual to disclose or furnish his or her Social Security number for any purpose, and from refusing any service, privilege or right to an individual because the individual refuses to disclose his or her number. The amendment includes an exception which allows employers to request an individual’s Social Security number in the course of the administration of a claim, benefit or procedure related to the individual’s employment; in the course of procedures related to retirement from employment or injury suffered during the course of employment; or to check on an unemployment insurance claim. It also allows employers to request a Social Security number to conduct a criminal or other background check permitted by New York State law, where the individual consents to its use, where it is being requested for the purposes of collecting child support, etc. Failure to comply with the law can result in a fine of up to $500 for the first violation and up to $1,000 dollars for any further violation.
Kmart Settles FCRA Class Action for $3 Million
Kmart Corporation has agreed to a $3 million settlement stemming from allegations that it violated the Fair Credit Reporting Act (FCRA) when using background checks to make employment decisions. The class-action suit alleged Kmart violated the FCRA by failing to provide “certain specific disclosures before it use[d] the report for an adverse action.” The putative class action complaint argued that a purpose of the FCRA is to grant consumers a meaningful opportunity to correct inaccuracies and omissions in background reports before employers take adverse employment actions. In the case, the plaintiff’s rights under the FCRA were undermined when Kmart deprived them of an opportunity to make such a correction. Kmart has denied any fault, wrongdoing or liability whatsoever, but will pay $3 million and will be granted a ‘narrow release’ covering only the FCRA claims.
The In-House Lawyer’s Guide To Marijuana Legalization: How Companies Should Clarify Their Policies, And What To Look Out For On The Enforcement Front
In the recent November elections voters in Washington state and Colorado voted to legalize the recreational use of marijuana. What does that mean for company drug policies? Should I panic?
Zero-tolerance drug policies should still be fine. So should drug testing programs. The courts have so far upheld employers’ rights to enforce drug-free workplaces, even if an employee is legally taking medical marijuana. “Go ahead and enforce your zero-tolerance drug policies regardless of the reason for marijuana use, whether medical or recreational, without regard to the new state laws,” says Richard Meneghello, a partner at Fisher & Phillips.
However, employers in Arizona, Connecticut, Rhode Island and Maine should be careful. These states all have laws that require employers to accommodate medical marijuana, but though federal law may preempt those measures, none has yet faced a court test. Unless you want your company to be the test case, tread cautiously.
A New Workplace Social-Networking Privacy Bill Surfaces In Philly
This proposed amendment to Title 9 of The Philadelphia Code, entitled “Regulation of Businesses, Trades and Professions,” would, in City Council’s words, “add a new Chapter, protecting social networking privacy, by prohibiting an employer from requesting or requiring access, in any manner, to an employee’s or prospective employee’s account or profile on a social networking site and providing for enforcement and penalties, all under certain terms and conditions.”
Indeed, this new bill is so broad that it could preclude HR from conducting an effective investigating claims of harassment in the workplace. The bill prohibits employers from requesting access to an employee’s Facebook account through a co-worker who is a Facebook friend.
New Social Media Privacy Law Taken Up by Congress
The social media privacy debate continues to rage – and now Congress has taken up the reins. Rep. Elliot Engel, D-N.Y., has introduced H.R. 537, the “Social Networking Online Protection Act.” Engel’s bill would make it illegal for employers to ask job applicants and employees for passwords to access their social networking sites and email accounts. If passed, it will address the concerns of 21 states that have similar legislation pending, and provide a national legal standard that has already been adopted in California, Delaware, Illinois, Maryland, Michigan, and New Jersey. While a national standard on this issue would be a positive step toward protecting individual privacy, it will not change an employer’s ability to see what is shared publicly. Employers who still want to use social media as a background screening tool shouldn’t ask for passwords and shouldn’t believe everything they see online. They should, however, make sure to put a well-trained individual who is knowledgeable about potential legal claims in charge of reviewing and vetting the information and consider FCRA implications.
Proposed “Ban the Box” Bill Would Greatly Restrict Use of Applicants’ Criminal Background Information by New Jersey Employers
On February 7, 2013, “The Opportunity to Compete Act” was introduced in the New Jersey Senate, seeking to dramatically curtail the ability of New Jersey employers to obtain or use a job applicant’s criminal history during the hiring process. The proposed bill would require employers to engage in a multi-step process before rejecting an applicant based on a criminal record. Unfortunately, the process proposed in the Act lacks clarity as currently drafted. Under the Act, most employers would be prohibited from inquiring about an applicant’s criminal history during the application process, either directly or via a background check, until after a conditional job offer is made. Once a conditional job offer is made, an employer would be permitted to inquire about the applicant’s criminal history only after providing a detailed notification form, obtaining written consent from the applicant, and then providing the applicant with a standardized Notice of Rights form. Employers would then be permitted to consider only those specific types of convictions or pending charges expressly identified within the Act, and would be precluded from considering non-pending arrests, or erased, expunged, pardoned, or juvenile convictions. Employers who violate the bill may be subject to civil penalties.
OFCCP Issues Guidance on Use of Criminal Records in Employment Decisions
The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) has posted a Directive on “Complying with Nondiscrimination Provisions: Criminal Record Restrictions and Discrimination Based on Race and National Origin.” The Directive incorporates guidance issued on the same subject by the EEOC. The OFCCP Directive and the EEOC Enforcement Guidance emphasize the racial and ethnic disparities reflected in incarceration rates and advise contractors to proceed with caution when relying on job applicants’ criminal records for employment decisions. The OFCCP warns that policies and procedures that categorically exclude individuals based on criminal records and do not take into account the nature and age of an offense may violate federal antidiscrimination laws such as Title VII. The agency clarifies that this is because an automatic bar to hiring those with a criminal record will likely result in an adverse impact on certain racial or ethnic groups. If an employer’s exclusion policy creates adverse impact on a protected class, it will need to prove that it is job-related and consistent with business necessity.
Utah Passes Internet Employment Privacy Act
The controversy over employers requesting or requiring employees or applicants to disclose their usernames or passwords for their online accounts at services like Facebook and Twitter, has led some states to pass laws restricting employers’ rights to make such requests. On March 7, 2013, the Utah State Legislature joined these states and passed the Internet Employment Privacy Act (the Act). Under the Act, Utah employers may not request that an employee or job applicant disclose a username and password allowing access to a personal Internet account. It also prohibits employers from taking an adverse employment action (like refusing to hire, demoting or firing) against an employee who fails or refuses to disclose a username or password for a personal Internet account. A “personal internet account” is defined under the Act as an online account used by the employee or applicant for purely personal reasons unrelated to work. The Act provides a private right of action for any person aggrieved by such an action, but limits any potential award to $500. Even with this limited exposure, the Utah Internet Employment Privacy Act requires that employers proceed with caution when accessing or requesting access to employee information on the Internet.
Limits on the Use of Credit Reports for Employment Screening
Democratic Representative Steve Cohen from Tennessee, has introduced H.R. 645 in the House of Representatives. The legislation would amend the Fair Credit Reporting Act (FCRA) to prohibit employers from using credit reports in the hiring process as well as prohibit the use of credit reports for the purpose of making adverse employment decisions. The only exceptions to this would be for jobs which require a security clearance, are with state or local government, or for certain individuals working in the financial industry (i.e., supervisory, managerial, professional, or executive positions).
If this legislation passes, it means employers would not be able to consider one’s credit history as part of a background check by a background screening company for lawyers, cashiers, pharmacists, NBA referees, executives in non-financial institutions, jewelers, academic financial aid offices, Human Resources employees, procurement employees and so on.
Montserrat C. Miller, NAPBS Washington counsel suggest that you check out the bill and see if your representative is a co-sponsor of the bill as so far the legislation has 29 co-sponsors. The bill, the Equal Employment for All Act is pending in the House Financial Services Committee. You can contact your member of Congress to share your concerns about the legislation by calling the Capitol Hill switchboard at 202-224-3121 and asking to be directed to your members office.
Bill Proposes Fingerprinting
Oklahoma schools could increase school safety and security by expanding the use of fingerprint background checks of adults who regularly interact with students, according to one state lawmaker.
House Bill 2228, by state Rep. Joe Dorman, would allow schools to authorize fingerprint background checks on anyone interacting with students in school-sponsored activities, including volunteers. Currently, schools cannot conduct these checks unless specifically authorized by state law. The legislation was approved by the House Public Safety Committee and now advances to the House Calendar Committee.
Connecticut Proposes Legislation Concerning Employee Passwords
The Connecticut General Assembly’s Labor and Public Employees Committee is drafting Bill No. 159, titled “An Act Concerning Employee Privacy,” which would “prevent current or potential employers from requesting or requiring that employees or potential employees provide passwords to their personal accounts as a condition of their employment.”
Occupational Fraud/ Data Protection
Nipping Dishonesty in the Bud
A recent survey conducted by the Institute of Finance and Management (IOFM) revealed employers are increasingly requiring all prospective employees to take online personality or integrity tests in hopes of weeding out dishonest or morally incompetent applicants. With unemployment rates as high as 18.7 percent in CA alone (Washington Post), employers have the luxury of hand-selecting their employees to help reduce stealing and other criminal behavior in the workplace. These pre-screening tests are already being utilized by 19 percent of the 300 organizations surveyed by IOFM and they are on the rise. The survey also found integrity and honesty testing of all employees is most common among hospitals (37 percent), security firms (32 percent), and entertainment establishments (27 percent).
“This kind of test, in combination with appropriate information-gathering about prospective employees, could be a useful predictive tool,” according to Elizabeth Rowe, a professor at University of Florida Levin College of Law, in a recent research study on causes of workplace theft.
The 3 Types of Insider Threat
Anyone with privileged access to classified, sensitive, or proprietary data has the potential to become an “insider threat” to companies. The idea of insiders has haunted the minds of security professionals for centuries and, in today’s technology-driven society, the opportunities for insiders to distribute and transfer information outside of the company have only multiplied. While the motivation for insiders to steal information has remained fairly constant overtime, (money, ideology, ego, coercion) Jeffery Jones and Ryan Averback define and detail three distinct categories of insiders that have emerged: trusted unwitting insider, trusted witting inside, and the untrusted insider.
The trusted unwitting insider threat is typically a person with legitimate access to a computer system or network, but who unknowingly assists in transmitting information. The trusted witting insider on the other hand, has the same type of access but this person makes a conscious decision to transmit information. Technical controls stand little chance against the new breed of untrusted insiders that have developed during the digital age, simply because network security is good at “stopping the wolf, but differentiating the wolf from the sheep is an extremely difficult problem to solve.”
23rd Annual Retail Theft Survey
Shoplifters and dishonest employees stole over $7 billion in 2010 from just 23 major retailers, according to the 23 rd Annual Retail Theft Survey conducted by Jack L. Hayes International, the leading loss prevention and inventory shrinkage control consulting firm. The 23 large retail companies surveyed apprehended more than 1 million shoplifters and dishonest employees in 2010 while recovering only $148 million from these thieves, down 7.3% from 2009. ”For the first time in over 10 years, total shoplifter and dishonest employee apprehensions, and the dollars recovered from those apprehensions all declined from the previous year,” said Mark R. Doyle, President of Jack L. Hayes International. Doyle attributes these declines to the economy, fewer store employees, and less loss prevention staffing. “Both shoplifting and employee theft continue to plague the retail industry, which results in higher prices to the consumer and can force companies to close unprofitable stores,” he added.
Could This Be the Future of Background Checking?
A new study from Carnegie Mellon University showed that current technology can cross reference a person’s face with currently available photos on the Web (such as Facebook) and find out information about that person, including their interests — and in some cases their social security numbers. Simply snapping a photo of a complete stranger on a cell phone, could enable you to learn more about them than you would in causal conversation. While CMU researchers were able to effectively use face recognition technology or “offline to online recognition” to accomplish this, they did so for only one-third of their test subjects. Entirely successful or not, this study demonstrates the fast approaching and inevitable capabilities of technology. The author of this article, Clayton Morris, suggests we protect ourselves from a not so far away world where personal boundaries and anonymity cease to exist. “The less sensitive information you put on the Internet, the less sensitive information someone can find out about you.”
Background Checks are on The Rise in Churches
More than 25,000 background checks conducted by churches or organizations on prospective workers in the past three years have turned up more than 1,600 felony offenses, with the number of organizations conducting background checks having risen 27 percent in the past year, according to LifeWay Christian Resources of the Southern Baptist Convention. Since launching LifeWay.com/backgroundchecks in 2008, more than 1,656 different churches or organizations have conducted 25,470 background checks. Of those, more than 45 percent (11,656) returned a criminal hit. A “hit” is any kind of incident, ranging from minor traffic violations to felony convictions, explained Jennie Taylor, marketing coordinator in LifeWay’s direct marketing department. Excluding traffic and non-traffic infractions (jay-walking, noise pollution, etc.,) more than 20 percent (5,107 searches) returned records with misdemeanor or felony results. More than 1,600 of those 5,107 searches returned felony offenses. ”Churches are realizing that this is something they need to be doing,” Taylor said.
Industry Awaits EEOC Decision on Criminal-Background Checks
Many employers are apprehensively awaiting the U.S. Equal Employment Opportunity Commission’s (EEOC) ruling on a guideline that could limit an employer’s ability to use criminal background checks during the hiring process. Despite a fury of opposition, observers believe the EEOC is leaning towards enacting such restrictions. David French, senior vice president for government relations at the Washington-based National Retail Federation, wrote in a letter to the EEOC, “The retail industry wants to keep our workplaces safe,” he said. “Removing a first line of defense, specifically the criminal-background-history question on an employment application, leaves retailers, shoppers and the entire business community at a disadvantage.” Others are concerned the new EEOC guidelines could place new unnecessary demands on businesses that further complicate the hiring process. Proponents such as Stephen Saltzburg, a professor at George Washington Law School, argues the current system often results in, “unjustified and discriminatory barriers to persons whose criminal records are unrelated to the employment at issue and whose records maintained by government databases are inaccurate or incomplete.”
Roskam Baking Co. Lawsuit Draws Attention To Mistaken Identity As Potential Job Killer
The background screening is meant to give businesses peace of mind during the hiring process, did the complete opposite for Leonardo Molina, who was wrongly convicted of a felony by a background check company resulting in dismissal from his job at Roskam Baking Co. before he even started. Molina is now filing federal lawsuits against four companies, including Backgrounds Online, who was responsible for the mistake, on the grounds of violating the Fair Credit Reporting Act (FCRA). Molina alleges the companies failed to provide him with, “meaningful access to the inaccurate information prior” to his firing that was “based on patently false information.” He also claimed that Backgrounds Online failed “to follow reasonable procedures to assure maximum possible accuracy of the information.” It was only after Molina took legal action did he become aware of the reason behind his dismissal. Friery explains how in many cases, employees’ records could show criminal charges, even those that do not necessarily warrant dismissal, and yet they are kept in the dark regarding mistakes that are costing them jobs. The FCRA, which Molina cites as the basis of his lawsuit, requires that employers provide workers a chance to dispute alleged errors in background reports. According to Friery, Privacy Rights Clearinghouse Research Director, “The flaw is, employers don’t have to hold the job open.”
Akaka Introduces Bill To Update Privacy Act
Sen. Daniel Akaka (D-HI) has introduced a bill to amend the Privacy Act of 1974 in response to expansions in technology, increased security needs, and growth of the data “market.” The Privacy Act Modernization for the Information Age of 2011 would create a federal chief privacy officer and a government-wide Chief Privacy Officers Council to help “fill wide gaps in…privacy leadership and ensure consistent development of policies and guidance on the Privacy Act across agencies,” Akaka said. It would also update penalties for Privacy Act violations and overturn the Supreme Court’s decision in Doe v. Chao, which held that, “an individual has to show actual damages resulted from an intentional or willful improper disclosure of personal information in order to receive an award.”
Employee Theft: The Largest Source of Shrink in North America
The Centre for Retail Research’s Global Retail Theft Barometer for 2011 (GRTB 2011) report surveyed more than 4,500 retail corporations in 43 countries found employee theft to be the greatest shrinkage problem in North and Latin America. Shrink or unaccounted for merchandise in a store’s inventory is higher (almost 7%) worldwide according to the Theft Barometer Report.
Employee theft accounted for 35% percent of shrinkage with dishonest employees being the largest source. The report also found that when employees steal they steal close to five times the amount stolen by customers. Most shrink occurs in cosmetics and beauty supply, clothing, and auto parts and building materials industries, respectively.
NRF Survey Finds Nearly All Retailers Rely on Background Checks to Keep Consumers, Companies Safe
As retailers across the country begin to hire thousands of holiday employees, the National Retail Federation today released a survey that illustrates the importance of employee background screenings in keeping customers safe. The survey, completed by retail executives from 96 of the nation’s leading department stores, mass merchants, discounters, drug stores, grocery stores and restaurants, examines retailers’ use of background screenings during the application and employment process. Nearly all retailers (97%) utilize background screening in some form during the application, hiring and employment process, according to the survey. Additionally, companies routinely conduct pre-employment background checks on a wide range of associates from senior executives (85.7%) to store associates (55.2%), with a particular focus on customer-facing employees and managers. ”Background screenings help retailers ensure the safety of both shoppers and employees from the very beginning of the application process,” said NRF senior asset protection advisor Joe LaRocca. “Pre-employment screenings are one of the tools retailers use as a first line of defense, especially during the holiday season when companies many have hundreds – if not thousands – of applications to sift through.”
Social Security Death List Enables Dead Children’s ID Theft
A little-known but widely used federal database meant to protect Americans from fraud has itself become a major source of fraudulent tax refunds. Thieves simply take the Social Security number and other personal information of a deceased person, or most often recently deceased children, which can be found in the widely public and freely accessible, Social Security Administration’s Death Master File. This data is then used to falsely claim the deceased as dependents in order for thieves to receive the refund. The Internal Revenue Service estimates that this damaging loophole has enabled tax filers to improperly submit 350,000 returns on dead Americans, approximately $1.25 billion in refunds during this tax season alone. Not only has the Death Master File become a major source of tax fraud, but a recent investigation by Scripps Howard noted that it accidentally lists about 14,000 living Americans each year in the death database. The Social Security Administration says it is powerless to act due to restrictions set forth by the Freedom of Information Act, which requires information contained in the Death Master File to be publicly released. ”While we believe that wider notification (to people at risk) is a piece of that protection, we also believe that narrowing the range of information included in the public release, delaying the public release to allow for corrections, and similar actions are at least as important,” said Assistant Inspector General Jonathan Lasher.
Crackdown on Fake Driver’s Licenses Aims to Eliminate Tool of Criminals, Terrorists
In just over two years, tough new federal rules will require all states to confirm an applicant’s legal status, social security number and other information before issuing a driver’s license. The 9/11 Commission claims an ID can be just as valuable to a terrorist as a weapon. Stricter enforcement however, leads to increased counterfeiting and forgery as many criminals try to cash in. While fake IDs may look real to the naked eye, Homeland Security’s Forensics Document Lab, equipped with new overt and covert security measures can easily detect the difference. Dawn Nelson, Chief of ICE’s Homeland Security Investigations for Identity and Benefit Fraud Unit, warns that using a fake driver’s license is a federal felony, whether it is to board an airplane or to buy a beer.
Maintaining Employee Privacy Across Jurisdictions
Companies need to be aware of their obligations under the profusion of data protection laws and regulations that govern the collection, use and transfer of their employees’ personal information. This is especially crucial for companies that have operations subject to the laws of multiple jurisdictions, as requirements vary widely from country to country and even from state to state. As a rule, only personally identifiable information (personal data) is afforded special protection by data privacy laws and many, but not all data privacy laws exempt personal data that has been encrypted. It should also be noted that data privacy laws protect not only active employees, but also information from clients and customers, job applicants, consultants, independent contractors and terminated or retired employees.
Although U.S. law is trending toward stricter protection of personal data, the laws in other countries are often much more extensive than even the strictest U.S. standards. Employers should consider all legal requirements, whether local, state or provincial or nationwide, that may impact their data privacy policies and procedures. Failure to comply with data protection laws can result in penalties such as civil fines and sometimes, criminal prosecution.
International Biometrics Privacy Charter
The Biometrics Institute launched its Biometrics Privacy Charter on November 30, 2011, during its 7th Biometrics Institute Technology Showcase and Exhibition in Canberra, Australia. The Charter is now available to all members.
“This Biometrics Privacy Charter has been designed by the Biometrics Institute to provide a universal guide for suppliers, end users, managers and purchasers of biometric systems,” says Isabelle Moeller, General Manager of the Biometrics Institute, “it is the public’s assurance that the biometric managers have followed best practice privacy principles when designing, implementing and managing biometric based projects.”
The Charter is intended to be a guide across many different countries and jurisdictions. It takes into account the legislative and administrative frameworks of different countries but recognizes that biometrics and information technologies do connect beyond national boundaries and across different fields as diverse as health records, border controls, consumer based applications in the telecommunications industry, banking, and drivers licenses.
The Importance of a Comprehensive Breach Response Strategy that Includes Insurance
Roughly 10% of companies in the United States purchase a comprehensive breach response strategy despite the fact that everyone needs it. Comprehensive coverage goes hand in hand with breach prevention, breach response and cyber liability insurance. Breach prevention includes hardware, software and corporate culture, and the quality of these components can greatly vary. An estimated 60 to 65 percent of breaches are caused by something internally, making underwriting a cyber liability policy difficult. Understanding a company’s breach prevention strategy and their existing environment is the first step to building a comprehensive breach strategy, while securing a cyber liability insurance policy that fits into their breach response plan is the last step.
The cyber liability insurance market offers a variety of policies ranging from limited to complete control in the breach response process. Oftentimes insurance companies and brokers try to take many decisions out of the insured’s hands, so it important for companies to find an insurance vendor who offers a policy that fits their specific needs, without giving away too much control.
Online Privacy Debate Heats Up with FTC and Commerce Dept. Reports Coming Soon
The Commerce Department and FTC will soon be releasing reports outlining the Obama administration’s position on online privacy issues, making this the first acting administration in U.S. history to introduce or endorse a federal privacy law. With the rise of social networks, online shopping, and targeted advertising, the topic of online privacy has ignited a heated debate between companies and consumers. Companies blame consumers for not utilizing privacy tools in place, while consumers expect companies to be clear about information collected and how to opt-out when necessary. Jules Polonetsky, the Director of the Future of Privacy Forum, believes privacy legislation is on its way and, “If we are able to craft privacy law that supports innovation [and] gives users more protection, we’ll win.” The Commerce Department framework would likely encourage companies to develop rules for their industries, potentially enforced by the FTC’s Safe Harbor rules. Polonetsky also notes that companies who want to avoid federal legislation need to be proactively proving they are self-regulating.
33% of Corporate Fraudsters are CEOs
A recent KPMG global survey on corporate frauds has found that executives and directors on company boards are the biggest perpetrators of corporate fraud. In fact, the involvement of top bosses in corporate frauds has more than doubled since 2007 and results in 33% of such cases. The survey, which tracked 348 fraud investigations KPMG member firms carried out in 69 countries, revealed an average financial loss of $1 million in every case of corporate fraud. In 2010, the Association of Certified Fraud Examiners estimated the total value of corporate embezzlement at $2.9 trillion. The average corporate fraudster is male; 36 to 45 years old; works in the finance function or in a finance-related role; holds a senior management position; and is employed by the company for more than 10 years. More importantly, the survey highlights how weakening control structures make the opportunity to commit fraud easier. It is time for companies to consider how they contribute to fraud when failing to detect or respond to lapses or gaps in controls, or by setting extremely steep targets.
Status of Euclid University
On May 23, 2011, Accredibase received a letter from Euclid University complaining that “erroneous information” concerning Euclid had been included in its database and that they were incorrectly listed as “unaccredited.” In response, Accredibase launched a lengthy and in-depth investigation into Euclid’s recognition status and contacted relevant government agencies from around the world where Euclid claims to operate from. During this time Accredibase received several more communications from Euclid, presenting various documents and urging Accredibase to update their status. After seven months of research, Accredibase has decided to maintain its original listing of Euclid University as an “unaccredited institution.” Accredibase has also chosen to make available to the public the various documents, which Euclid University provided in their correspondences.
New Study Offers Tips to Combat ‘Sweethearting’
A first-of-its-kind study on “sweethearting”–a form of employee theft when the employee gives away products or services for free or at a discount–claims traditional mitigation strategies used by loss prevention professionals often don’t work. The study’s authors approached sweethearting from a marketing perspective, aiming to expose the “dark side” of the practice that hadn’t been previously studied. Employee theft and fraud costs U.S. companies $600 billion each year and it is believed sweethearting is responsible for 35% of companies’ annual profit losses in the retail sector. Sweethearting differs from the traditional definition of employee theft in that the thieving employee takes all the risks and breaks the law without any direct gain. The indirect benefits come in the form of increased tips, increased social status, and “tit-for-tat” agreements. The study found that without taking the motivations behind sweethearting into account, currently used techniques such as register tracking systems and video surveillance, would not serve as deterrents. Two suggested strategies for combating sweethearting include: making sure employee training includes an ethics component, and pre-employment screening for the following three personality traits: personal ethics, need for social approval and general risk taking.
ALERT! How to spot a FAKE degree
A recent research has estimated that the fake degree industry is worth over Rs. 12,000 crores worldwide. In case of India, the UGC maintains a list of fake universities, but it does not provide you the list of online fakes. We requested Dr. John Bear, the world renowned authority on online degrees, to explain to our readers how to spot a fake degree grading institution. There is no unanimity on what a degree mill is. No one denies that a ‘university’ operating from a mailbox service, selling diplomas to anyone, no questions asked, is a mill. But what if there were a requirement of one month of study and a 10-page thesis? Six months of study, 50 pages? Two years of study and 200 pages? Would it be still a fake university?
A survey of dozens of definitions of ‘degree mill’ found five relevant factors in determining school legitimacy:
. What degree-granting authority has it? Amount of work required
. Quality of work required
. Process for awarding credit for prior learning
. Credentials of people who make decisions
Thus a degree mill can be defined as an entity in which:
. Degree-granting authority does not come from a generally-accepted government agency;
. Procedures for determining the amount and quality work do not meet generally-accepted
. standards; and
. People making these decisions do not have relevant credentials, training, or experience.
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2012 Report to the Nations – Key Findings and Highlights
Survey participants estimated that the typical organization loses 5% of its revenues to fraud each year. Applied to the estimated 2011 Gross World Product, this figure translates to a potential projected global fraud loss of more than $3.5 trillion. The median loss caused by the occupational fraud cases in our study was $140,000. More than one-fifth of these cases caused losses of at least $1 million.
Employees committing fraud typically are first-time offenders with clean employment histories, yet they usually display one or more behavioral red flags that could be used to detect and stop their crimes, according to a new report on global fraud.
The frauds reported to us lasted a median of 18 months before being detected and were more likely to be detected by a tip from a fellow employee rather than by any other method.
The report found that the banking and financial services industry was most commonly victimized. More than three-fourths of reported fraud was committed by individuals working in six departments: accounting, operations, sales, executive/upper management, customer service and purchasing.
With nearly half of victim organizations unable to recover their losses, proactive measures to prevent fraud are critical. Management should continually assess the organization’s specific fraud risks and evaluate its fraud prevention programs in light of those risks. A checklist such as the one on page 69 can help organizations effectively prevent fraud before it occurs.
Companies Need To Remain Vigilant In The Face Of Escalating Fraud
Companies worldwide are battling to survive and grow in what have continued to be highly adverse economic conditions. In this environment, growth and ethical business conduct can sometimes appear to be competing priorities. Ernst & Young recently undertook the 12th Global Fraud Survey where they interviewed chief financial officers and heads of legal, compliance and internal audit, to get their views of fraud, bribery and corruption risk and how their organizations are mitigating them. These interviews highlighted specific risks, many of which could be missed without awareness, careful due diligence and oversight. The survey indicates that companies’ awareness of the risks posed by fraud, bribery and corruption is high, and that a substantial majority of these companies are doing many of the right things to mitigate the risks. Despite this, there remain significant weaknesses in many organizations’ responses and the use of forensic data analytics and other technology-related tools occurs too infrequently. In addition, the survey revealed that risks, instead of standards are rising, and due diligence on third parties is expected by regulators, but 44% of respondents report that background checks were not being performed.
Reports Examine Lessons Learned from Breaches
Six years after a data breach that resulted in the Department of Veterans Affairs (VA) being vilified for disregarding its own gap-filled information security and privacy policies, the VA now stands as a model for how to effectively integrate tough safeguards into its daily operations. The breach produced a sea change at VA to protect veterans’ information through policies and procedures that are now communicated clearly as a top priority from the secretary on down through the sprawling agency. VA relies on automated technologies, continuous monitoring and reporting, and periodic employee training and re-training for adherence. Some of VA’s best practices include: an independent privacy breach analysis team made up of legal, technology, business and privacy officers who examine each incident that is reported to Congress, how it was handled and what else can be done to prevent it in the future; encrypted laptops; personal data does not flow outside the VA unless it’s encrypted according to the latest federal information processing standard from the National Institute of Standards and Technology (NIST), etc.
Threat to Intangible Assets Likely to Increase
The threat of intangible asset incidents is likely to increase according to Peter Hacker, Head of Communications, Technology and Media Practice at JLT. Speaking at this week’s 9th forum on Global Communications, Technology & Media (CTM) in Salzburg, Hacker said that as the frequency and severity of cyber crimes is likely to increase so too will their damage to operations, reputations and other intangible assets.
According to JLT’s CTM Benchmarking Industry Survey from the 2011 Salzburg Conference, JLT expect 50%-60% of all CTM corporations to revise their corporate privacy policy, catastrophe response plans and insurance requirements by the end of 2012.
The Enemy Within: Who’s Stealing Your Company’s Secrets?
A new survey of 2,031 European office workers conducted by the information management firm Iron Mountain found that a third of them admitted to taking or transmitting confidential information out of their workplace. One in seven of those surveyed said they had taken confidential data with them to a new job and 31 percent said that they would deliberately remove or share such information were they to be fired. This is a major problem, according to Iron Mount Senior Vice President Peter Eglinton, who noted that a focus on outside threats to data security often causes the risks posed by those with routine access to sensitive data to be overlooked.
Workers Have Stolen $400m from Employers Since 2000
Whether it’s a crime of opportunity, greed, malice or a combination of all three, over the past 12 years Aussie workers have stolen $400 million from their employers – and that’s just the figure of those who were caught. According to a new report from forensic accounting firm Warfield and Associates, the banking sector contained the worst offenders, with accountants and bookkeepers topping the list. The research also found evidence of major governance weaknesses in some of Australia’s largest organizations. The most common method of theft was through electronic funds transfer, where employees simply transferred cash into their own accounts. Report author Brett Warfield said that organizations should learn from the mistakes of others, and ensure there are effective internal controls, appropriate supervision and regular internal audits in place. “We see EFT fraud as one of the major fraud issues of this decade,” said Warfield.
Forrester: Most Data Breaches Caused by Employees
Most data breaches are caused by mundane events such as employees losing, having stolen or simply unwittingly misusing corporate assets, a Forrester Research report has found. After questioning over 7,000 IT executives and ordinary employees across North America and Europe, 31% cited simple loss or theft as the explanation for data breaches they had experienced, ahead of inadvertent misuse by an employee (27%). Additionally, external attacks accounted for 25% of cases, and abuse by malicious insiders only 12%. Predictably, the arrival of mobile devices and the consumerization of IT hasn’t helped matters. Most organizations formulate policies for securing mobile devices but, paradoxically, lack enough tools to enforce them. Thirty-nine percent worried about a lack of data leak prevention on mobile devices, with half concerned about the consequences of old-fashioned theft. The most common form of mobile device security is password entry plus remote lock and wipe with almost a quarter admitting they haven’t started using any form of data protection at all.
Internal Fraud on the Rise
The level of corporate fraud committed by insiders has increased for the second year in a row, according to figures from the Kroll Advisory Solutions Global Fraud Report. The report revealed that company employees committed 67% of corporate frauds in 2011, up from 54% a year earlier. Less than two-thirds (63%) of European companies were knowingly affected by fraud in 2011, while 56% said their exposure had increased over that time. Interestingly, the report highlighted data theft as one of the most prominent categories of fraud for European companies after 18% fell victim to it in the past year. Expansion into new and emerging markets was listed as one of the main causes of increased exposure to fraud. Other key global findings include: concern about fraud is dropping faster than fraud itself and developed markets reported significant levels of fraud.
“Increasingly, fraud exhibits industry-specific and regional characteristics, which require detailed knowledge of a market, sector, business process or culture to unearth, redress and prevent,” said Kroll Advisory Solutions chairman, Tommy Helsby. “Companies that get complacent about it do so at their own peril.”
Fraud Prevention in a Bad Economy
Recently the Kansas City Business Journal reported on an intriguing study about the importance of corporate image. In light of heightened concern about ethical standards and conduct in the business and professional world, Fleishman Hillard, a public relations firm, and the World Economic Forum, surveyed 132 delegates about corporate reputation. Seventy-seven percent of the business leaders responded corporate reputation – its need to maintain a strong, positive image – has become more important recently. This increased focus on reputation has stimulated a renewed interest in integrity. Whether we realize it or not, we all have a code of ethics we live by; unfortunately, many have no strong moral foundation. Any risk assessment and advice on loss prevention should cover the following aspects and each area should be unpacked to understand the actual risk the organization faces, the strengths or weaknesses in the existing system and then recommendations on how to manage risk going forward: physical security; people security – including employees and third-party employees; the security of systems and procedures; technology; and the management of security.
Workplace Fraud on the Rise – While Profits Slip Out the Back Door
Organizations around the world – both large corporations as well as small businesses – lose an estimated 5% of annual revenues to fraudulent activities, according to a study conducted by the Association of Certified Examiners (ACFE) with 42% of fraudsters being employees, 38% managers and 18% owner/executives. A great majority of this fraudulent activity occurs within the 23 million small businesses in the U.S. that account for 54% of all sales and provide 55% of all jobs. Small businesses in particular are extremely susceptible to employee fraud as they often lack the anti-fraud controls or policies found in larger organizations. Businesses are urged to take steps to minimize the impact of fraud by evaluating their employee screening process and by implementing anti-fraud policies and controls. Other tips include: conduct a thorough background check that goes back over the past seven years on all employees before hiring to see if there is a criminal history; with a signed release, check their credit report for any fiscal irresponsibility; and institute anti-fraud controls to monitor all employee activity.
Assessing Risk: Data Breach Litigation in U.S. Courts
Along with the growth of electronic consumer databases, there has been an increase in the numbers of data breaches. A June 2011 Ponemon Institute study revealed that 90 percent of surveyed companies had experienced a data breach within the past year. Companies may want to assess the level of risk posed by the possibility of litigation when determining how to respond to a data breach. Common factors that may impact the likelihood that a lawsuit will be filed following a data breach includes: type of data breached; cause of the breach; misuse of personal information; and size of the breach. Until recently, consumer plaintiffs have met with very little success in the courtroom, but this could change as the general public becomes increasingly aware that companies are maintaining detailed information about their customers. Courts may soon recognize that an individual consumer has a reasonable expectation that such information should be protected and that a data breach violates that expectation. In addition to consumer lawsuits, companies should be aware of other sources of litigation risk, including federal regulators, state attorneys general and/or financial institutions impacted by the data breach.
Experian Customers Unsafe as Hackers Steal Credit Report Data
Instead of directly targeting the big three credit bureaus, data thieves often target affiliated businesses that utilize credit background checks. When hackers broke into computers at Abilene Telco Federal Credit Union last year, they gained access to sensitive financial information on people from far beyond the bank’s home in west-central Texas. The cyber thieves broke into an employee’s computer and stole the password for the bank’s online account with Experian Plc, the credit reporting agency with data on more than 740 million consumers. The intruders then downloaded credit reports on 847 people, taking Social Security numbers, birthdates and detailed financial data on people across the country. The incidents shed new light on security weaknesses at credit bureaus at a time they are under investigation by both houses of Congress over how much data they collect and how it’s used. Sen. Richard Blumenthal (D-CT) said, “This is profoundly important because it illustrates a growing problem when it comes to data breaches and security-the chain is only as strong as its weakest link,” adding, “If their customers have inadequate security practices, so do the credit bureaus.”
Medical Board Investigates More Fake Doctors
California is considering expanding investigations by the state medical board to combat the disturbing trend of fake doctors, California Watch reported. Called Operation Safe Medicine, the medical board’s investigative unit was established in 2000, but it disbanded three years later because of budget issues. In 2009, however, the investigative board reopened due to public cries about unlicensed persons practicing as providers. Operation Safe Medicine sent 61 cases to prosecutors for review for the fiscal year ending in June, up from 31 cases the previous year. Since 2009, Operation Safe Medicine’s investigations have resulted in six felony convictions and 18 misdemeanor convictions, California Watch noted. ”It is especially noteworthy to see the 203 percent increase in cases referred for criminal action due in large part to the re-establishment of the Operations Safe Medicine Unit,” the state report explained about the numbers from 2006 to 2012.
The Centre for Information Policy Leadership at Hunton & Williams LLP Releases Accountability Self-Assessment Tool to Help Organizations Evaluate Their Privacy Programs
The Centre for Information Policy Leadership at Hunton & Williams LLP (the “Centre”) released today an accountability self-assessment tool designed to help organizations evaluate their internal privacy programs and practices. The tool is the product of the Global Accountability Project for which the Centre serves as secretariat.
“In an accountability model, organizations implement and demonstrate adherence to a comprehensive data protection compliance program,” says Marty Abrams, President of the Centre. “In collaboration with experts from privacy enforcement agencies, industry, civil society and academia, we’ve outlined the key elements of a sound program to help organizations take the concrete steps necessary to be accountable.”
The Accountability Project is a global, multi-stakeholder process that convenes academic experts, privacy enforcement agencies, government representatives, industry and civil society to develop an approach to data protection that relies on the fair information practice principle of accountability. At meetings in Dublin in 2009; in Paris in 2010; Madrid in 2011; and in Brussels in 2012, the Project developed essential, commonly-accepted elements of accountability and articulated the nature of the programs and processes accountable organizations would implement. The Project will continue its work in Warsaw and Toronto in 2013
Incident Response Plan Template: A New Deliverable From The NAPBS Best Practices Committee
The Data Breach Prevention Sub-Committee of Best Practices Committee of NAPBS announced their newest deliverable for NAPBS membership, titled Incident Response Plan Template. It’s a well-formatted and comprehensive template for any company handling personally identifiable information.
Only available to NAPBS Members. To access sign on and then hover over Members navigator button. Scroll down the drop down list to Member Resources, click on Member Research and Background Information, click on Other Resources and click on Incident Response Plan Template
Privacy Trends 2013: The Uphill Climb Continues
A recent report by Ernst & Young detailed privacy’s increasing effect on businesses in the new year. The report highlights three primary categories that the firm predicts will shape the new privacy era: governance, technology and regulation. In the past 15 years, privacy regulations have had to evolve quickly to address operational and lifestyle changes that technology has brought forth. Privacy regulators are doing everything they can to keep up, but as technology’s evolution accelerates, regulators continue to fall behind. Cyber attacks, inappropriate online etiquette and the oversharing of personal information – these are just a few of the issues organizations need to navigate and regulate not only internally, but also on behalf of consumers who may not know better. The report calls on organizations and regulators to work together to shape privacy within the digital landscape and to appreciate the governance role they must play in safeguarding personal information.
More Than Half of In-house Counsel Say Data Security is Their Top Legal Concern
A recent Ponemon Institute study found the average annual cost of cybercrime was $8.9 million per year per company. The companies in the study experienced on average 1.8 successful cyber-attacks per week. The frequency of such incidents has made data security the top legal concern of 55% of in-house counsel, according to the 2012 Law and the Boardroom Study by Corporate Board Member and FTI Consulting. A plethora of federal and state laws designed to protect consumers also has helped push data protection to the top of the compliance priority list. Businesses and criminals are constantly working against each other to come up with the latest technology to thwart the other in this area. However, not all data theft is high-tech. The improper disposal of documents containing sensitive data, such as in unsecured trash containers that are accessible to the public, violates federal rules protecting consumer information against trash-diving identity thieves. Doing the right thing starts with encryption, the process of encoding information so it is unreadable to hackers. The safe harbor only applies if the decryption keys that allow the data to be viewed are not compromised. Therefore, strong key management is essential. Experts also strongly recommend encryption for mobile devices, which are easily stolen.
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Imation Map of State Data Breach Notification Laws Spotlights Need for Storing and Protecting Sensitive Information
Imation Corp, a global scalable storage and data security company, released results of research into state data breach notification laws and associated penalties. The analysis shows that current state data breach notification laws are strikingly similar, but vary in compliance requirements for businesses, with all laws highlighting the need for companies to deploy methods for closely storing, protecting and controlling sensitive information. Imation used publicly available sites (including information obtained via the National Conference of State Legislatures) to analyze state compliance laws in the 46 U.S. states that have such laws, as well as in Puerto Rico, the District of Columbia and the U.S. Virgin Islands. Imation created a “Compliance Heat Map” to depict the strictness of data breach laws and resulting penalties for breaches. The Compliance Heat Map provides a visual snapshot of the strictness of regulations by state, using a color scale ranging from light yellow (less strict) to dark red (more strict). “What the compliance heat map tells us is that data security needs to be at top of mind for all IT pros, as there are rules in place for nearly all states and territories and non-compliance could mean serious penalties,” said David Duncan, software & security solutions marketing director, Imation.
Kick-Starting a Privacy Program
It is not enough for a business to create a privacy policy and place it on its website; a business must define policies and practices, verify that their employees are following the practices and complying with policies, and confirm that third-party service providers are adequately protecting any shared information as well. As customer demands and regulatory requirements change, the business’ privacy practices and policies must be reviewed and revised to meet this changing business environment.
So, how do you get started? Well, every journey begins with the first step. Here are 10 steps to kick-start your organization’s privacy program.
Guarding Privacy in the Digital Age: Maine Lawmakers Take up the Challenge
As more and more of our personal information is shared, it is also at risk. The American Civil Liberties Union of Maine and a group of bipartisan legislators have unveiled a new package of laws aimed at better protecting Mainers’ privacy. Maine legislator Diane Russell’s bill – The Maine Online Privacy Protection Act – would require commercial websites to conspicuously let Maine consumers know when personal information is being collected and shared. Republican Rep. Mike McClellan, wants to protect social media privacy at work. His bill would block employers from getting passwords to their employee’s social media accounts, something that’s already happening. These are just two of a package of five bills with bipartisan support that aim to protect personal privacy. The others would limit drone use for domestic spying and require law enforcement to get warrants before they can track cell phone data and text messages. With identity theft being one of the fastest growing crimes in the U.S., it’s time for laws to catch up with technology. While these bills have bipartisan sponsors, it’s unclear whether there will be support from businesses or law enforcement.
Top Five Information Security Threats to Data
To see the full survey results
New Attention is Given to Privacy Trade Issues
Privacy and trade will be considered as linked issues during the looming EU-U.S. trade negotiations, reports Hogan Lovells privacy leader Chris Wolf in one of the inaugural blog posts on the first-ever blog of the International Association of Privacy Professionals, Privacy Perspectives, which just launched. An investigation has begun at the United States International Trade Commission that will examine the impact of privacy regulations on digital free trade and as the negotiation of a EU-U.S. Free Trade Agreement soon will begin-a negotiation that inevitably will look at the issue of the compatibility of privacy laws on both sides of the Atlantic, and that likely will put data protection harmonization on the negotiating table.
States Focus on Reducing Employer’s Access to Social Media
Increasing numbers of Americans use social media both on and off the job. Recently, some employers have asked employees to turn over their usernames or passwords for their personal accounts. Some employers argue that access to personal accounts is needed to protect proprietary information or trade secrets, to comply with federal financial regulations, or to prevent the employer from being exposed to legal liabilities. But others consider requiring access to personal accounts an invasion of employee privacy.
State lawmakers introduced legislation beginning in 2012 to prevent employers from requesting passwords to personal Internet accounts—including email, banking and social networking sites—to get or keep a job. Some states have similar legislation to protect students in public colleges and universities from having to grant access to their social networking accounts.
Expected FTC Chair Ramirez Could Push for Global Privacy Rules
Federal Trade Commissioner Edith Ramirez, recently designated by the Obama administration as the next chair of the Federal Trade Commission, is expected to champion globalized approaches to consumer privacy protection and to clamp down on fraudulent marketing aimed at Spanish-speaking communities. The fact that the Obama administration chose a woman comes as no surprise, considering criticism of the president’s male-centric senior advisory staff. Ramirez has a background steeped in antitrust and competition issues, and served as director of Latino outreach for the Obama 2008 campaign. Jeffrey Chester of the Center for Digital Democracy said, “Under (Ramirez’s) leadership, we expect the FTC to blaze a new ground on privacy.” Ramirez has expressed interest in leadership on APEC’s cross-border privacy rules and the intersection between privacy and technology. She has also indicated support of robust rules around children’s data collection and raising the profile of the agency’s work on behalf of all minority and underserved communities.
Prepare for the Coming of the Privacy Police
The Federal Trade Commission (FTC) is employing its authority to regulate deceptive and unfair practices to go after companies that impinge on consumer privacy. The agency is also finding new ways to apply old laws to current practices. As the amount of online data about consumers multiplies, so does the number and sophistication of attackers trying to get it. And the issue becomes critical as the attacks target corporate intellectual property and the nation’s infrastructure. “Paying attention to cybersecurity is a business imperative,” said Christopher Wolf, a Hogan Lovells partner. “There are repeated attacks on infrastructure, and businesses need to protect their trade secrets and preserve the ability to operate their business. There are also privacy issues if personal data is affected. I expect to see more attention by Congress and the SEC [Securities and Exchange Commission] to corporate disclosures on cybersecurity.” Although there is a lot of interest in consumer privacy on Capitol Hill, rifts between and within the parties stand in the way of Congressional action.
York University Says Ex-Official Accused of Fraud Claimed a Bogus Degree
York University says it has discovered that a controversial executive it fired in 2010 over fraud allegations misrepresented his academic credentials when it hired him, the Toronto Star reported. The Canadian institution is in the midst of a lawsuit accusing the former official, Michael Markicevic, of leading a scheme involving two dozen other parties that featured scores of fraudulent home-improvement invoices. Mr. Markicevic has denied the lawsuit’s claims.
Mr. Markicevic submitted a résumé for a management position at York that said he held an M.B.A. degree from “Auburn State University,” the newspaper reported. The university’s lawyers noted that no such institution exists, and confronted him with correspondence from Auburn University indicating that he neither attended nor received a degree from the Alabama institution. However, when York announced his appointment, in 2004, the institution said he had a degree from Auburn, according to the newspaper.
Complying with the FCRA Amendments Before January 1, 2013 – a Step-By-Step Guide
By now, you should know that the Equal Employment Opportunity Commission (EEOC) has issued “Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions”, which is designed to restrict criminal background checks by employers, but you may not know that enforcement responsibility for the Fair Credit Reporting Act (FCRA) has been transferred from the Federal Trade Commission to the recently created Consumer Financial Protection Bureau (CFPB). What this means for employers is that they should expect heightened scrutiny on their FCRA compliance. The FCRA requires employers who use CRA’s to do their background checks to go through a four-step process, using federally-mandated forms. The four steps are: Step 1. Certification to the Consumer Reporting Agency; Step 2. Notice and Authorization from the Applicant; Step 3. Pre-Adverse Action Protocol; Step 4. Adverse Action Protocol. One of the CFPB’s first steps in its role as chief enforcer of the FCRA, was to revise that forms which employers must use, effective January 1, 2013. Make sure to get your forms ready and keep an eye on your state’s laws on this issue, including “ban the box” laws.
The U.S. Safe Harbor – Fact or Fiction? (2008)
The U.S. Safe Harbor is an agreement between the European Commission and the United States Department of Commerce that enables organisations to join a Safe Harbor List to demonstrate their compliance with the European Union Data Protection Directive. This allows the transfer of personal data to the U.S. in circumstances where the transfer would otherwise not meet the European adequacy test for privacy protection. The Safe Harbor is best described as an uneasy compromise between the comprehensive legislative approach adopted by European nations and the self–regulatory approach preferred by the U.S. The Safe Harbor Framework has been the subject of ongoing criticism, including two previous reviews (2002 and 2004). Those reviews expressed serious concerns about the effectiveness of the Safe Harbor as a privacy protection mechanism. After ten years of public debate a Galexia study once again reviewed the U.S. Safe Harbor and found numerous problems with data accuracy and basic compliance with simple Framework requirements. Problems identified in previous reviews of the Safe Harbor have not yet been rectified, and the number of false claims made by organisations represents a significant privacy risk to consumers.
Public Records
The Fundamentals of Public Record Searching
The depth and scope of information that exists on people, businesses, and places is staggering. What used to be mostly paper and microfiche trails of data have turned into cyber trails of bytes managed by the government and by private companies.
“Yes,” says the clerk at the County Recorder’s Office. “All our recorded documents are online.”
She neglected to mention that only the index is online – not document images. She failed to mention the index only goes back to 2007, except for the records lost in the flood in the spring of 2009. She failed to say only real estate related records are in the index, only the debtors’ names are searchable, and there are no identifiers to distinguish the subject.
Oh yes, the system is managed by a private company that requires a user name and password. The clerk doesn’t know the phone number, but it doesn’t matter anyway because the company doesn’t return calls.
This story may sound far-fetched, but it is closer to the truth than you might think. Actually many of these searching idiosyncrasies mentioned really do exist on searchable websites for many counties and towns.
There is no easy way to generalize about government-held records because of the diverse nature and variations of public policies associated with them. In reality some records are closed or restricted.
The purpose of this article is to set the foundation on how to perform public record searching.
Transportation
Employment Screening Best Practices for Transportation Industry Employers
A rigorous and consistent background screening program, is an effective background screening program that can help transportation employers comply with regulatory requirements and protect them from non-compliance penalties; reduce the risk of accidents; prevent theft and other criminal behavior associated with negligent hiring and retention; and improve the hiring process so as to quickly and effectively onboard the most qualified candidates. This white paper addresses several best practice guidelines transportation companies can follow in their screening process to address these needs, improve time-to-hire turnaround, meet compliance requirements, and help ensure a safer workplace – See more at: http://www.hireright.com/resourcelibrary/employment-screening-best-practices-for-transportation-industry-employers/#sthash.MpyLiTPa.dpuf
How Can Motor Carriers Reduce Their Potential Liability for Negligent Hiring and Retention
Negligent hiring and negligent retention claims are on the rise in the transportation industry. By one estimate, 72% of negligent hiring cases with payments to the injured party average in excess of $1.6 million. This white paper written by Littler Mendelson attorneys outline how motor carriers can potentially reduce their exposure by conducting background checks that are more extensive than those checks currently required by the Federal Motor Carrier Safety Regulations. Additional background checks done for minimal cost can prove invaluable when making hiring decisions.
2013 Transportation Spotlight: Employment Screening Benchmarking Report
HireRight surveyed transportation companies from across the country to better understand why, how and when they screen; top challenges; key initiatives planned for the year, and how shifts in regulations have affected their screening practices. This report provides a great way for you to compare your screening practices to your peers, hone your current programs and discover best practices employed by other transportation companies.
Social Media
Today’s online networks open new doors to valuable information. Do you have the tools and know-how to access them?
Social media isn’t just changing the way the world shares information — it’s changing the way we access it, too. Because people and corporations are utilizing digital communications more frequently, they’re revealing much more about their lives and business activities. This type of data sharing grows exponentially with each day that passes.
For private investigators, this is an almost too-good-to-be-true scenario, but accessing useful information isn’t always as easy as it seems. This paper provides tips, insights and tools that will help you better understand social media and how it can transform your investigations.
Screening job candidates on Facebook? Good luck with that
According to study by researchers at North Carolina State University employers who ask to monitor a job candidate’s Facebook or other social media platform are less likely to get the best people for the job. If the idea of a company checking you out on Facebook before hiring you creeps you out, you’re not alone.
In one exercise, two-thirds of online job applicants who had been told that their Facebook accounts had been reviewed for “professionalism” said the practice was an invasion of privacy that reflected poorly on the company doing the screening. In addition, In some cases, social media screening puts the company at greater risk of getting sued, according to Will Stoughton, a Ph.D. student at N.C. State and lead author of the research paper.
Academic Studies About Screening Applicants’ Social Media: New Cottage Industry?
I may need to start a separate blog to share and comment on the wealth of opinions that seem to be coming forward on the topic of employers screening applicants’ social media. Hot on the heels of my post applauding what I thought was a sensible and realistic article suggesting that, well, yes if you are an applicant you should expect people to read information you make publicly available.
“Using Social Media to Discriminate”: Please Read the Fine Print
A recent study of how hiring managers respond to phony social media accounts has been featured in some outlets with bold headlines along the lines of “Employers May Use Social Media to Discriminate.”
The study was designed to test attitudes about (a) Muslims and (b) sexuality and results showed that Christian candidate fared better than the Muslim candidate in getting contacted for the next step in the interview process. This difference was more pronounced in conservative areas of the country. The study found that gay and straight candidates did not have notably different success rates in any part of the country.
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Social Screening Legal Considerations