Background Checks Do they Minimize your Risk or Add to it?

(1)

October

6 ‐

7,

2014

|

The

Mirage

Hotel

&

Casino

|

Las

Vegas

Background

Checks

– Do

they

Minimize

your

Risk

or

Add

to

it?

Moderator:

Dawn

McCartney

,

Director

CW

Strategies

and

Research,

Staffing

Industry

Analysts

Panelists:

Tom

Shelley

– DP

Procurement,

DHL

Clay

Lewis

– SVP,

Global

Staffing

– Vendor

Management,

Bank

of

America

(2)

•Staffing firms were asked the question, “How frequently, if at all, do you conduct

criminal background checks on temporary staffing candidates? A) We never do criminal background checks.

B) We sometimes do them. C) We always do them.”

•Only 2% of staffing firms reported that they never did criminal background checks. •Sixty percent reported that they always ran such checks, and the remaining 38%

(3)

•Staffing firms were asked the question, “What resources does your company use

for criminal background checks?

•When we do them, we use internal resources only.

•We use an outside service for criminal background checks, but we're not

sure how good it is.

•We use an outside service and we're pretty sure it does an adequate job. •We use an outside service and we're very confident it does a good job.” •Nearly all staffing firms reported using an outside service to perform criminal

background checks—only 6% said they use internal resources only for such checks. •Most staffing firms –59% of them– said they were “very confident” their

background check service was doing a good job. However, a significant portion of

staffing firms were less than fully confident of the quality of those checks. Thirty‐

one percent said they were “pretty sure” their background check service was doing

an “adequate” job, and another 4% said they were uncertain about the quality of

(4)

•Staffing firms were asked the question, “Do you agree with the following

statement? ‘Since buyers are most interested in criminal background checks, they

really ought to be the ones doing them.’”

•Roughly three out of four staffing respondents disagreed with that statement; only

one in four thought criminal background checks ought to be done by the buyer

(5)

•Staffing firms were asked the question, “How seriously does your company take

criminal background checks for temporary staffing candidates?

•A) With regard to criminal background checks, we are just going through

the motions.

•B) We do as good a job on criminal background checks as the buyer

specifies, no more no less.

•C) We go out of our way to make sure criminal background checks are

thorough, even if the buyer doesn’t care.”

•About half of staffing firms take background checks very seriously, even if the

buyer doesn’t. But nearly as many reported that they do only as good a job on

background checks as the buyer specifies, “no more, no less.”

•Virtually all staffing firms took background checks at least somewhat seriously‐‐

only 1% of staffing firms said that with regard to background checks they were “only

(6)

Tom

Shelley

DHL

(7)

October

6 ‐

7,

2014

|

The

Mirage

Hotel

&

Casino

|

Las

Vegas

7 DHL:

The

Logistics

Company

for

the

World

1) Air freight market share is based on air freight volumes moved in 2010, figures stated are in export tons 2) Ocean freight market share is based on ocean freight volumes moved in 2010, figures stated are in TEU’s 3) 2010 data

4) 2010 TDI Revenue: BE, CH, DE, ES, FR, IT, NL, PL, SE, UK, AE, RU, ZA, AU, CN, HK, IN, JP, KR, SG, US, BR, CA, MX



Logistics

facilities

in

3,370

locations



32,300

Express

service

points

in

over

220 countries

and

territories



about

275,000

people

worldwide

International

express parcel

providers Air freight

forwarder

Ocean freight

forwarder

European road

freight forwarder

Contract logistics

service provider

1

2

1

2,772

TEU’s2)

8.3%

Global Market Share3)

~30%

Global International Express

Market Share4)

2.4%

European Market Share3)

2,459

Export Tons1)

Global

Market

Position

2010

(8)

Clay

Lewis

Bank

of

America

(9)

October

6 ‐

7,

2014

|

The

Mirage

Hotel

&

Casino

|

Las

Vegas

(10)

Guiding

principles

for

due

diligence

FDIC / FINRA EEOC, Ban the Box initiatives OCC (regulator) Vendor accountability

Foundational emphasis on risk management and hiring compliance

Parity to employees Differentiated by risk factors

?

Physical access System access Contractors only All third party workers Country laws Global consistency

?

Dimensionalizing the

challenge

with

contingent

workers

– clients

must

weigh

their

priorities

External

factors

(11)

October

6 ‐

7,

2014

|

The

Mirage

Hotel

&

Casino

|

Las

Vegas

Eric

Rumbaugh

Michael

Best

&

Friedrich

Attorney

(12)

Should

You

Conduct

a

Background

Check?



What

are

the

legal

limitations

on

your

ability

to

use

criminal

background

checks?



What

questions

can

you

ask/should

you

ask

in

the

application

process,

and

what

can

you

do

with

the

information

you

receive

in

response

to

those

questions?

(13)

October

6 ‐

7,

2014

|

The

Mirage

Hotel

&

Casino

|

Las

Vegas

Pros

and

Cons

of

Background

Checks



Disparate

impact

claims.

-

Does

screening

for

arrest

and

conviction

records

have

a

disparate

impact

on

minorities?

-

Defenses:

No

disparate

impact,

business

necessity

(job

relatedness

required).



Arrest

and

conviction

record

discrimination

claims

(specific

law

in

(14)

Disparate

Impact



Federal

cases



EEOC

guidance

-

Facially

neutral

policy

disproportionately

screens

out

a

Title

VII

‐

protected

group

-

Data

supports

finding

that

criminal

conviction

exclusions

inherently

have

disparate

impact

on

race

and

national

origin



Updated

EEOC

guidance

-

Will

assess

1)

applicant

flow

data;

2)

workforce

data;

3)

criminal

history

background

check

data;

4)

demographic

availability

stats;

5)

incarceration/conviction

data;

(15)

October

6 ‐

7,

2014

|

The

Mirage

Hotel

&

Casino

|

Las

Vegas

EEOC

Guidelines



EEOC

issued

52 pages

of

guidelines

aimed

at

preventing

discrimination

based

on

background

checks



Three

factors

relevant

to

the

job

‐

related/business

necessity

defense:

-

_The

_nature

_of

_the

_offense

-

The

amount

of

time

since

the

offense

was

committed

-

The

nature

of

the

job

(16)

EEOC

Guidelines

– Impact

on

Employers



Stepped

up

EEOC

lawsuits.

What

results?



EEOC

v.

Freeman,

No.

09 ‐

CV

‐

2573

(D.

Md.

Aug.

9,

2013)

-

_EEOC

_claimed

_disparate

_impact

_against

_African

_‐

_American,

_Hispanics

_and

_males

-

Freeman

had

very

specific

criteria

for

disqualification

-

Over

course

of

suit,

multiple

EEOC

claims

dropped/dismissed

(17)

October

6 ‐

7,

2014

|

The

Mirage

Hotel

&

Casino

|

Las

Vegas

Sample

Matrix

Attention

Hiring

Manager:

If

you

are

unsure,

do

not

make

offer

until

you

speak

to

someone

in

HR.

If

the

offense

is

not

listed

and

you

have

questions,

please

contact

HR.

Crimes

0 ‐

3 Years

3 ‐

7 Years

7+

Years

Alcohol

Consumption/Possession

Y

Alcohol

Sale

to

Minor

N

Y

Arson

N

D

Auto

Theft

N

D

Burglary

(misd.)

N

D

Y

Child

Abuse/Molestation

N

Child

Neglect

(felony)

N

D

Child

Neglect

(misd.)

N

Y

(18)

Sample

Matrix

Item # Description Recommended

Adjudication Status

8 Misdemeanor convictions except for the following:

crimes involving weapons, violence, theft (includes petty theft), robbery, burglary, larceny, embezzlement, dishonesty, misappropriation, fraud, forgery or sex crimes

Pending

9 Drunk driving or related (more than one conviction) Does Not Meet

10 Worthless (bad) check (one conviction or more convictions) Pending

11 Contributing to the delinquency of a minor Pending

12 Unresolved warrant Does Not Meet

13 Conviction on a single sex crime Does Not Meet

14 Any felony conviction except: those listed below Pending

15 Any felony/misdemeanor conviction involving: weapons, violence, theft (includes petty

theft), robbery, burglary, larceny, embezzlement, dishonesty, misappropriation, fraud, forgery or sex crimes