HOT TOPICS IN
HOT TOPICS IN
BACKGROUND SCREENING
BACKGROUND SCREENING
Pamela Q. Devata
Scott M. Paler
Seyfarth Shaw LLP
Breadth. Depth.Results.
Seyfarth Shaw LLP
CH1 11234744
Depends on the following:
What do you want to know?
Will the employee be driving a
company vehicle?
Type of job/position
Federal and State law restrictions
Other requirements (type of industry)
Consider Using:
Credit reports
p
Criminal reports
Driving records
Social security trace
Employment verification
Hot Topic #2: Should You
Develop Background Screening
Policies Or Hiring Criteria?
Checklist of Questions to Consider When
Creating A Background Screening Policy
• Who will be screened? (i.e., applicants only, all employees, top executives, managers only).
• When will background screening occur? (i e pre-employment onlyWhen will background screening occur? (i.e., pre employment only, annually, at time of promotion, post-offer, pre-offer, etc.).
• What forms will be given to applicants/employees before the background checks are conducted?
• What types of checks will be conducted? How far back will the checks go?
• What form will the results be given to the employer?
• Who will have access to the results?
• Who will have access to the results?
• How long will the screening process take?
• What information will be considered in making employment decisions?
• Will the nature and gravity of the offense or offenses, the time that has passed since the conviction and/or completion of any related sentence, or the nature of the job assignment be considered before making any employment decision?
making any employment decision?
• Who is the ultimate decision-maker regarding background information?
• What actions will be taken if an applicant/employee falsifies his/her application?
• Who will be responsible for complying with the federal Fair Credit Reporting Act (FCRA) and state laws regarding employment screening?
screening?
• Who will be responsible for administering the adverse action process under the FCRA if applicable?
Background Screening Policy
•
Different from hiring criteria
•
Highly recommended
•
Notify employees and applicants that background
screening will be performed so there is no
question in the future.
•
Guidance to HR about consistent application
Hiring Criteria: Pro’s and Con’s
•
Pros:
– Consistency among departments, offices, locations, hiring managers, etc.
– No surprises for employees/applicants
•
Cons:
– Little room for extenuating circumstances
– May require displacing many employees/applicants – Difficult to capture every possible “crime”/situation
First question is: In-house or Outsource?
•
Legal ramifications of each
–
Generally in house—FCRA does NOT apply (but
state law implications may exist)
–
Outsourcing requires complying with the FCRA
•
Cost associated with both (employee time and
resources)
resources)
•
Experts in industry (resource availability and
knowledge of what can be used/obtained)
Benefits of Outsourcing
Doing background checks in-house can divert
time and resources from your core business.
Qualified CRAs can usually find and deliver
background information more quickly and
accurately than if the search is performed
in-house.
A reputable CRA should be fully knowledgeable
about the FCRA and best able to comply with all
about the FCRA and best able to comply with all
aspects of the law.
How do you select an appropriate
vendor?
•
What should a background check include?
•
What may a company legally ask for in a search?
•
What is unlawful?
•
If you don’t know what you are getting
when you order a background check, you
probably won’t get what you need and you
probably won t get what you need, and you
may create liability for your company
Obtaining a Good Background Check
• What to ask for from the CRA– Search methods (including sources in consults and frequency)( g q y)
– Who performs the search? Who reviews the information after it is collected? (Usually a search company will hire “runners” to go to various court houses and collect data)
– Turn-around time for a search (should be three days or less)
– How it handles incomplete or inaccurate records
• What to ask for from the applicant (Identifiers)
F ll N (i l di id iddl i k )
– Full Name (including maiden, middle, previous, aka)
– Date of birth
– Social security number (properly maintained in a secure location)
Where Will A Good CRA Search For
Records?
–
County courthouses
–
State criminal records repositories
–
The federal Integrated Automated Fingerprint
Identification System
–
Private databases maintained by some criminal
background checking companies
Each of these sources contains different information which may be relevant to your background check.
Is It Always Better To Spend More
Money On A Background Check?
–
An Internet search for a background search
An Internet search for a background search
company will reveal dozens of providers offering a
variety of “search packages”, prices and promises.
–
Simple, inexpensive searches may not get you the
information you need, and may not be worth the
small price you pay.
Hot Topic #4: How Should You
Handle Independent Contractors?
Notice, Authorization and
Certification Requirements
•
When an Independent Contractor Employer is
Assigning an Employee to a Site or Specific
Employer, whose responsibility are the
notice/authorization requirements?
•
Depends:
–
Who is the “End-User”?
Who is the End User ?
Notice, Authorization and
Certification Requirements
•
End-User is the company that is using or relying
on the information in the report to make an
on the information in the report to make an
employment decision. (Usually the Contractor).
–
What if Owner wants to see the report?
•
This may or may not make it an End-User, but the
notice/authorization must specifically state this fact.
•
Contractor is generally the employer of temporary
•
Contractor is generally the employer of temporary
staffing employees.
–
Responsible for pay, training, placement, etc.
Who Can Require Background
Checks?
•
Can Owners Require Background Checks on
I d
d
C
?
Independent Contractors?
•
YES:
–
May require background check before a person is
assigned as condition of placement (i.e., based on
the specific job)
Who Can Require Background
Checks?
•
Can Independent Contractors run a background
check on an applicant before he/she is placed
check on an applicant before he/she is placed
with an Owner?
–
Yes, as long as the Company gives the
appropriate notice and gets authorization.
•
Can Independent Contractors terminate an
employee on the basis of a background check?
employee on the basis of a background check?
–
Yes, for failing to consent to a background check
or on the basis of information contained in the
check.
Adverse Action
•
Responsibilities of End-User taking adverse
action:
Before adverse action is
taken employer must
provide consumer with:
• a copy of the consumer
report
• a summary of the
Waiting Period . . . .
•
After adverse action is taken the employer must
provide the consumer with:
–
Notice of the adverse action taken
–
Name, address, and toll-free telephone number of
the consumer reporting agency that furnished the
consumer report
–
Statement that the CRA did not make the decision
Statement that the CRA did not make the decision
to take the adverse action and is unable to provide
specific reasons why the action was taken
Waiting Period . . . .
•
After adverse action is taken the employer must
provide the consumer with:
–
Notice of the consumer’s right to obtain a free
copy of the consumer report from the agency
within 60 days
Whose Responsibility is Adverse
Action?
•
The End-User(s)
–
Generally the Contractor
–
Companies will often contract that the Independent
Contractor will be responsible for complying with
Adverse Action Requirements as the “employer”.
The fundamental challenge is proving identity…
Laws that apply
•
Fair Credit Reporting Act (FCRA), 15 U.S.C. Sec.
1681 et. seq.
q
•
Electronic Signatures in Global and National
Commerce Act (E-Sign Act), 15 U.S.C. Sec.
7002(a)(1)
•
Uniform Electronic Transactions Act (UETA)
•
State Laws
FCRA
•
No specific provisions regarding electronic
signatures
g
•
Require specific “consent” from consumers in the
form of a written signed document
•
FTC has opined that electronic signatures can be
valid (if you comply with E-Sign)
E-SIGN ACT
•
Went into effect in October 2000.
•
States that neither contracts nor signatures should be
g
denied legal effect solely because they are in electronic
form.
•
Congress included a reverse preemption clause allowing
state law to supersede E-Sign if the state either
– adopts a piece of similar legislation – i.e., the Uniform Electronic Transactions Act (UETA) – as approved by the
N ti l C f f C i i U if St t
National Conference of Commissioners on Uniform State Laws (NCCUSL); or
UETA-Uniform Electronic
Transactions Act
• 46 states, as well as District of Columbia and the Virgin Islands, have adopted UETA.
• UETA essentially states as follows:
• UETA essentially states as follows:
– a record or signature will not be denied legal effect or enforceability solely because it is in electronic form;
– the parties must agree to conduct the transaction electronically
– the authenticity of an electronic record or signature may be shown in any manner, including a demonstration of the effectiveness of the security procedures in place;
i ti f d t ti l b i t i i
– companies may satisfy records retention laws by maintaining electronic documents, so long as there are assurances that the electronic documents have not been altered.
See “A Few Facts About the Uniform Electronic Transactions Act,” http://www.nccusl.org/Update/uniformact_factsheets/uniformacts-fs-ueta.asp.
Practical Tips
•
Require Applicants to Consent to Electronic
Submission and Storage
g
•
Use A Well-Recognized Method of Encryption to
Protect Applications
Require Applicants to Affirmatively
Consent to Electronic Signature
•
Under UETA and E-Sign, parties to an electronic
i
h
i
h
transaction must consent to having the
transaction in electronic form.
•
Whether the parties agree to conduct a
transaction by electronic means is determined
from the “context and surrounding
i
”
circumstances.”
•
E-Sign suggests that prior to this consent, a
consumer must be informed of certain rights.
Require Applicants to Consent to
Electronic Submission and Storage
Under E-Sign, “consumers” must be appraised of:
• any right or option the consumer has to obtain the record on paper or in other non-electronic form;
electronic form;
• his or her right to withdraw his or her consent, together with any conditions, consequences or fees that would result from such a withdrawal. The Act specifically notes that these consequences may include the termination of the business relationship;
• the procedures the consumer must use to withdraw consent or to update his or her electronic address;
• whether the consent is for information relating to a single transaction or for identified categories of records that may be provided over the course of a relationship; and
• how the consumer may request and obtain a paper copy of any electronic record that is t b bt i d hil th t t i l t i di i till sent may be obtained even while the consumer consent to receive electronic media is still in effect, and whether any fee will be charged for such a copy.
Select A Signature Method That Allows
For Objective Identification of Applicant
•
Demonstrating the authenticity of electronic signatures in
court could prove challenging
court could prove challenging.
•
Whereas a hand written signature has objective
characteristics that identify the signer, a typed name does
not.
•
Ideas for complying:
– Use a digital signature method
– Require applicants to submit number along with name
– Require applicants to provide “wet” signatures
– Use specific IP addresses as means of tracking
Hot Topic #6: Future Developments
• Immigration Reform
– Congress may soon pass comprehensive immigration legislation. A new law could require additional background screening
requirements during the pre-employment process.
• Chemical Regulations
– New Department of Homeland Security regulations for chemical facilities take effect on June 8, 2007. They mandate new background screening efforts.
Definition of Willful/Adverse Action May Change
• Definition of Willful/Adverse Action May Change
