What Every Employer Needs to Know in the Background Screening World

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1 What Every Employer Needs to Know

in the Background Screening World

Jim Sweeney

• Today’s Objectives

–Reminders – compliance issues with the p FCRA –Identify the components of a solid background check. –The EEOC Guidance –Legal Updates and Industry Trends

FCRA ‐ 4 Easy Steps

• Employer Certification • Written Release and DisclosureWritten Release and Disclosure • Pre‐Adverse Action Notice • Notice of Adverse Action

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Part 1 Pursuant to the Fair Credit Reporting Act, this notice is to

DISCLOSURE and AUTHORIZATION

inform you that as part of our procedure in processing and evaluating your application for employment, we will be obtaining and reviewing a consumer report or an investigative consumer (Background Check) report for employment purposes. This authorization may be used to obtain a consumer report at any time during my employment. Part 2 I, _________________________, hereby consent and authorize Inquirehire or its agents to prepare an investigative consumer report, including but not limited to obtaining a consumer report and information as to my credit worthiness, credit standing, character, general reputation, credit capacity, personal characteristics, and mode of living. This report may involve

personal interviews with sources such as neighbors friends associates past personal interviews with sources, such as neighbors, friends, associates, past employers and educational institutions in which case I understand that I am entitled to a copy of my rights under the FCRA as well as to request additional disclosures of the nature and scope of the investigation. Public records may be used in this report, such as civil and criminal records, driving records, liens, and judgments that are deemed to have a bearing on my job performance. This consumer report will be used for employment purposes as it is defined in the Fair Credit Reporting Act, section 603 (h). KB1 Part 3

Have you used another name such as maiden name or other married name? Yes_____ No__--___ If yes, list names and corresponding years.____________________________________________________ Drivers License number: ____________________________State of issuance (DL):___________________ Date of Birth: __________________ Social Security Number: ____________________________________ List all past counties of residence and corresponding years: (i.e. Scott, IA 2003 – 2013) County_____________________ Years: From _______________through _________________________ County_____________________ Years: From _______________through _________________________ County_____________________ Years: From _______________through _________________________ County_____________________ Years: From _______________through _________________________ Current Address, City, State, & Zip

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Part 4

For Minnesota and Oklahoma and California, check here if you would like a copy of the consumer report.

New York Applicants or employees: You have the right to inspect and receive a copy of any investigative consumer

consumer

report requested by employer by contacting Inquirehire at 800-494-5922. By signing below you acknowledge receipt of Article 23-A of NY Correction Law.

New York & Maine Applicants Only: You have the right to inspect and receive a copy of any investigative consumer report requested by the Company by contacting the consumer reporting agency identified below. You may also contact the Company to request the name, address and telephone number of the nearest unit of the consumer reporting agency designated to handle inquiries, which the Company shall provide within 5 days.

Oregon Applicants Only: - Information describing your rights under federal and Oregon law regarding consumer identity theft protection, the storage and disposal of your credit information and remedies should you suspect or find that the Company has not maintained secured records is available upon request.

Part 4 (continued) Washington State Applicants or Employees only: You also have the right to request from the consumer reporting agency a written summary of your rights and remedies under the Washington Fair Credit Reporting Act. California Only: *Under CA law, employers are prohibited from obtaining a consumer credit report y p y p g p unless it meets one of the following exceptions. (1) a position in the state Department of Justice, (2) a managerial position, as defined, (3) that of a sworn peace officer or other law enforcement position, (4) a position for which the information contained in the report is required by law to be disclosed or obtained, (5) a position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, (6) a position in which the person is or would be a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer’s behalf, (7) a position that involves access to confidential or proprietary information, as specified, or (8) a position that involves regular access to $10,000 or more of cash.

ADVERSE ACTION

A V RS ACTION

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4

Adverse Action notification failures.

Adverse Action Process

Advanced Hiring Solutions – Legendary Service

Simple process and communication mistakes can lead to complex legal issues.

Key Considerations

• Empathy

• Respond Quickly

• Re‐investigate

• Be conscious of timelines

• Stay engaged with the applicant

Components of a Good Criminal

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Key Background Check Components

Employment Education Licenses Driving Records Credit Check Industry Checks Criminal Records

Optimal Background Check

Industry or

Regulatory

Requirements

Risk Tolerance

Budget and

Time

Restrictions

APPLY ‐ Layers of Protection

• There is no one check that is bullet proof • Combination of searches • The more searches you request, the greater the cost • Fill in the holes by position • Meet regulations/requirements

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6 Key Components

• Person Search

• County criminal record check

County criminal record check

• Nationwide Database Check

• Federal Record Check

• State Record Check

• Global – US Patriot Act

Important First Step

Person Search –Also known as SSN Trace or Address Verification –Identifies the addresses where a person has lived –Finds addresses they may be purposely omitted –Fundamental piece of every criminal background check

Where does the Person Search Info come from?

• The address information is derived from multiple sources including property records, FedEx deliveries, cell phone bills, magazine subscriptions, bankruptcy records, change of address/postal forwarding information, credit headers and other consumer data. The records are purchased by the commercial provider of the person search and compiled in one database.

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How do we determine what services are needed? –Risk analysis by position •Access to property A i i d •Access to sensitive customer data •Work with children, elderly, or disabled •Access to sensitive organization information •High profile position •Represents the organization in the public eye How do we determine what services are needed? –Organization’s requirements •Acceptable turnaround time for investigations investigations •Cost of services compared to budget •What is a reasonable level of due diligence for a designated position –Find acceptable balance of risk prevention, cost, and time

What is Reasonable?

• General Rule: the greater the interface

g

with coworkers, members, or general

public, the greater the obligation of the

organization

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8 Ignorance is not a defense

Even though the organization may not

h

k

f th

i k

t d b th

have known of the risk presented by the

individual, an organization will be held

liable if it should have known”

Common Misconceptions

• There is no one check that is bullet proof

• Identifiers in criminal files

• Scope of the search request

• What can be reported

• Turnaround time

• Database hits

EEOC GUIDANCE

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Big Picture

• State of flux EEOC h h t b t till ti • EEOC has come up short, but still active. • Private plaintiffs’ counsel take aim elsewhere? • Employers goal: Avoid neon light problems. • Expect continued movement at state/municipal level.

EEOC Guidance

• “Green factors” – (from Green v. Missouri Pacific Railroad) issues that were relevant to assessing whether an exclusion is job related for the position whether an exclusion is job related for the position in question and consistent with business necessity: –The nature and gravity of the offense or conduct; –The time that has passed since the offense or conduct and/or completion of the sentence; –The nature of the job held or sought.

EEOC Guidance

Individualized Assessment

Individualized assessment generally means that an Individualized assessment generally means that an employer informs the individual that he may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him; and considers whether the individual’s additional information shows that the policy as applied is not job related and

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10 EEOC Guidance

Other relevant individualized evidence  The facts or circumstances surrounding the offense or conduct. Th b f ff f hi h th i di id l  The number of offense of which the individual was convicted.  Older age at the time of conviction or release from prison.  Evidence that the individual performed the same type of work post conviction, with the same or a different employer, with no known incidents of criminal conduct.

EEOC Guidance

Other relevant individualized evidence  The length and consistency of employment history before and after the offense or conduct  Rehabilitation efforts, i.e. education/training  Employment or character references and any other information regarding fitness for the particular position  Whether the person is bonded under a federal, state, or local bonding program

EEOC Guidance

If the individual does not respond to the employers attempt to gather additional information about his attempt to gather additional information about his background, the employer may make its

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EEOC Guidance

Employer Best Practices:

• Eliminate policies or practices that exclude people from employment based on any criminal record. • Train managers, hiring officials and decision makersTrain managers, hiring officials and decision makers

about Title VII and it’s prohibition on employment discrimination. • Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct. • Determine the specific offenses that may demonstrate unfitness for performing such jobs

EEOC Guidance

Employer Best Practices: • Determine the duration of exclusions for criminal conduct based on all available evidence conduct based on all available evidence. • Include an individualized assessment. • Record the justification for the policy and procedures. • Note and Keep a record of consultations and research considered in crafting the policy and procedures. • When asking about criminal records, limit inquiries to records for which exclusion would be job related.

INDUSTRY TRENDS

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12 Turnaround Time

• Negative Impacts: a. Furloughs, layoffs, closures b “Cl k h ” b. “Clerk searches” c. Required forms • Positive Impacts a. Integrations b. Automation (fetch)

Ban‐the‐Box

• The new law applies to private employers (Minnesota previously banned the box only for public employees). • Employers may not inquire into or consider or require disclosure of criminal record information until the applicant has been selected for an interview or, if there is not an interview, until a conditional job offer of employment has been extended to the applicant

has been extended to the applicant. • Employers may not use employment applications that ask for criminal record information. • The law has exemptions for employers who are statutorily required to consider criminal history in hiring for employees serving children, social workers, private detectives, health care workers, banks and other financial institutions, and those seeking certain licensures. • Violations of the law are specifically identified as civil rights violations. • Private employers who violate the statute may be subject to a written warning, before January 1, 2015, and subsequent fines between $500 and $2000 per violation, depending on the size of the employer.

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New Strategies

• CONSENT BASED SSN VERIFICATION (CBSV) The Consent Based SSN Verification (CBSV) is a web interface platform l k d h d l d ( ) linked to the United States Social Security Administrations (SSA) Master Files and Death Indexes. By running a CBSV inquiry we can receive official validation of: 1. Social Security Number 2. Name 3. Date of Birth 4. Gender Code (if available) 5. If applicable, we will report a Death Indicator that SSA records reflect the SSN holder is deceased

New Strategies

• INCOME TAX RETURN VERIFICATION (ITRV) – Mitigates fraud by matching the applicant direct to IRS data – Verifies personal and business income tax returns

– Form 1040 and other series available for current year and prior 3 yearsForm 1040 and other series available for current year and prior 3 years

Examples of other available Forms: 1065, 1120, 1120A, 1120H, 1120L, 1120S – Form W‐2, 1099 & other transcripts may be available for current year & prior 9‐years Other available Forms: 1098 series, and 5498 (Individual Retirement Accounts, etc.) – Verify salaries and self‐employed hires, Mortgage and Lending, Tenant and Property Management, and more Requires signed consent of the applicant – Results are returned in two business days or less – Strengthens due diligence processes to official governmental source data

New Strategies

• SKILL SURVEY – Utilizes a web based application – Includes pre‐built questionnaires based on job function – Includes a dashboard display so you can check the status of an applicant’s p y y pp references – Automatically collates responses into a concise, actionable report suitable for side by side comparisons – You enter the candidate information from a pre‐ selected job survey. 2 min. – Candidate enters professional references information 5 min. – Reference providers complete the job survey providing in‐depth information 10 min – System aggregates the results into a 360 degree report 2 sec.