Background Screening How to Navigate the Compliance ...Background Screening: How to Navigate the Compliance Wilderness Presented By: This manual was created for online viewing. State

Background Screening:

How to Navigate the Compliance Wilderness

Presented By:

This manual was created for online viewing. State specific information in this manual is used for illustration and is an example only.

mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 404204

Chad AscarIntelliCorp

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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 404204

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© 2018 IntelliCorp Records, Inc. All rights reserved. 11

Background Screening:

How to Navigate the Compliance Wilderness

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IntelliCorp

IntelliCorp has been a committed member of the employment screening industry since 1996. Whether you operate locally or internationally, our products and services assist you in making better decisions and promoting a safe workplace.

• Accredited through the National Association of Professional Background Screeners (NAPBS)• Named to HRO Today Baker’s Dozen 9 times as top screening provider

Presenter:Chad Ascar – Senior Operations Manager (Compliance)

Chad ensures that IntelliCorp and its clients are sufficiently educated about applicable federal laws and regulations. Oversees Compliance Department at IntelliCorp, which includes credentialing, consumer reinvestigations, client audits, monitoring industry changes, and training on FCRA, privacy, and security.

Advanced FCRA Certified by the NAPBS and member of International Assoc. of Privacy Professionals


Background Screening:How to Navigate the Compliance Wilderness

• Background Screening and Legal Compliance – Why It’s Importanto The Penalties of Non-Compliance

• The Fair Credit Reporting Act (FCRA)o Disclosure & Authorizationo Adverse Action

• Equal Employment Opportunity Commission (EEOC)o 2012 Enforcement Guidance

• Ban the Box

• Conclusion – Best Practices Review

This information is not meant to provide legal advice of any kind. Legal advice should be sought from your attorney or corporate counsel.

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© 2018 IntelliCorp Records, Inc. All rights reserved. 44© 2017 Verisk Analytics, Inc. All rights reserved. 4© 2017 IntelliCorp Records, Inc. All rights reserved. 4

Background Screening and Legal Compliance:

Why It’s Important


Background Screening

Which Direction Do You Want Your Screening Program to Go?

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Hiring an employee can be one of the most important decisions an employer makes.

A comprehensive background screening program can be a vital tool for an employer when evaluating a job candidate. It can help an organization:

• Locate any criminal records • Verify work history and job related experience• Confirm education credentials• Promote a drug-free workplace• Mitigate risk of bad hire and associated costs• Safer work environment

Background screening can help you get a complete picture of your candidate.

However, a background screening program is only as good as it is legally compliant.

A non-compliant program can lead to expensive fines and/or legal action.



Here are some examples of cases that were settled just in the last few months:

Target Settles $3.74M Lawsuit Over Exclusionary Background Screening Practices(Carnella Times and Erving Smith and The Fortune Society, Inc v Target Corporation)• Screening procedures caused alleged disparate impact

Frito-Lay Pays $2.4M to Settle Class Action Lawsuit(Chism v PepsiCo Inc. and Frito-Lay Inc.)• Alleged improper disclosure/authorization of background screening

Petco Reaches $1.2M Settlement in FCRA Background Check Lawsuit(Jacklyn Feist, et al v. Petco Animal Supplies Inc. et al.)• Alleged improper disclosure/authorization of background screening

These lawsuits, and others like them may have been avoided if organizations followed existing legal precedence and established best practices.

Don’t find yourself in this type of situation.

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Fair Credit Reporting Act


Fair Credit Reporting Act (FCRA)Do You Know Your Responsibilities Under the Law?

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Fair Credit Reporting Act (FCRA)

• The Fair Credit Reporting Act (FCRA) is U.S. Federal legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. (CRA)

It’s intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in credit/consumer reports.

It’s also the primary federal law regulating employment background checks and applies to all background checks conducted by a third party whether they include a credit report or not.

• Remember, when it comes to the FCRA and running a background screening on an individual, the devil is in the details.

In the last few years organizations and companies have been the target of legal action because they were not abiding by some key provisions of the FCRA.



Two of the biggest pitfalls organizations have stumbled into recently that are linked to the FCRA are:

• Disclosure & Authorization Forms

• Adverse Action

Disclosure & Authorization Forms – Before you order a consumer report for employment purposes, you must notify the individual in writing that you are using the report. You must also get the person’s written authorization before you ask a CRA for the report.

Adverse Action – The process of which an employer is relying on the consumer report to deny a job application, reassigning or terminating an employee, or denying a promotion.

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Disclosure & Authorization Forms

Disclosing that a consumer report will be used and securing written authorization to receive a report is the first step when running a background check on an individual for employment purposes.

It’s also the first mistake many organizations make.

What mistake?

Language in the FCRA imposes specific obligations on employers that order background checks from credit reporting agencies.

When obtaining informed authorization the employer must offer a form that is “clear and conspicuous” in a document that consists “solely” of the disclosure.

This phrase in the FCRA is very important!



These forms should contain language that is specific to the request, nothing more!

Do Not Include:

• Language that claims to release you from liability for conducting, obtaining, or using the background screening report

• A certification by the prospective employee that all information in application is accurate

• Overly broad authorizations that permit release of information that the FCRA doesn’t allow to be included in report

• Wording that purports to require the prospective employee to acknowledge that your hiring decisions are based on legitimate non-discriminatory reasons.

Litigators have seized on this phrasing in the FCRA and held employers to the literal interpretation of the law.

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Avis Settles FCRA Background Check Lawsuit for $2.7M(Fuller v. Avis Budget Car Rental LLC, et al.,)Extraneous information on disclosure form.

M-I LLC, a Delaware LLC & PRECHECK Settles $1.6M Lawsuit(Syed v. M-I LLC)Included a liability waiver within the authorization form.

Whole Foods Settles Class Action for $800K(Speer v. Whole Food Mkt. Grp., Inc.)Included a liability waiver within the authorization form.

Home Depot Faces FCRA LawsuitKatherine Saltzberg v. Home Depot USA,. IncIncluded a liability waiver within the authorization form.

Noticing a common theme here?



Adverse Action

Before denying a job application, reassigning or terminating an employee employers must:

• Provide pre-adverse action disclosure – copy of consumer report & summary of rights under the FCRA

• After adverse action is taken, you must provide the individual notice (orally, in writing, or electronically) that you have taken adverse action– Include information of the CRA that supplied report– Statement that CRA did not make decision to take adverse

action– Notice of individual’s rights to dispute accuracy or

completeness of information

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Fair Credit Reporting Act (FCRA)UPS Faces Class Action Lawsuit(John Riley, et al. v. United Parcel Service of America Inc.,)Plaintiff alleged UPS pulled job offer after background check results.No information provided regarding results of background check to plaintiff.

Class Action Lawsuit Filed Against Starbucks(Wills v. Starbucks Corp.)Applicant never received copy of background check report before adverse action taken.

Food Lion Parent Company Settles $2.9M Over Alleged FCRA Violations(Janeen Brown v. Delhaize America)Food Lion failed to provide notice prior to adverse action.

Lawsuit Filed Against Management Firm Over FCRA Violation (Jones v. Halstead Management Company, LLC)Copy of background report not provided to applicant.

Running a background screening program and not following the FCRA? You could be in for bad news.


Equal Employment Opportunity Commission

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Equal Employment Opportunity Commission (EEOC)

The U.S. Equal Employment Opportunity Commission is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex, national origin, age, disability or genetic information, or participated in an employment discrimination investigation or lawsuit.

The EEOC released a guidance that deals with the use of arrest and conviction records in employment decisions. Their Guidance deals with how the employers use of an individual’s criminal history may violate the prohibition against employment discrimination.

Key Elements of Guidance:

• Targeted Screening (“Green Factors”)• Individualized Assessment• Written Policy


Equal Employment Opportunity Commission (EEOC)

“Green Factors”• Nature and gravity of crime•Time elapsed since offense• Nature of the job sought by applicant

Individualized Assessment• Opportunity for the individual to show the exclusion should not be applied due

to their particular circumstances• Allows employers to consider more complete information on applicants or

employees

Written Policy:• Identify essential job requirements• Determine specific offenses that may impact person’s ability to do job• Determine duration of exclusions for criminal conduct• Record justification for the policy• Keep records of consultation and research used to craft policy

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Ban the Box


Ban the Box Legislation

‘Ban the Box’ is a term used to describe a type of employment law that mandates when an employer may inquire about any criminal history of an applicant during the hiring process.

The goal of ‘ban the box’ was to offer applicants with a criminal history a better chance of employment.

Flavors of ‘Ban the Box’

• Remove all criminal history questions from job application

• Mandates employers not ask about criminal history until after the first interview is concluded or a conditional offer of employment has been made.

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Ban the Box Legislation

Advocates of these laws hope an applicant is able to display their qualifications for a position, thereby increasing the chances of employment.

Before these laws, the fear of applicants with a criminal history was to be eliminated from the job pool before interviews were even conducted.

‘Ban the Box’ legislation is now in 31 states and over 150 counties and municipalities.

It’s vital to understand if your city or state has a ‘ban the box’ law on the books.

When an employer may ask about criminal history in the hiring process varies from law to law.

But not always!The law for New York City is very much different than ‘ban the box’ in Los Angeles.

Know your obligations.


Employment Screening Best Practices

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Best Practices Overview

Background screening should be an essential tool in anyevaluation process.

If done correctly, a compliant program can match up aqualified candidate with a great opportunity with your organization.

Don’t get lost on your way to that destination!

• Create a background screening policy and put it in writing• Comply with legal guidelines. Courts do not take ignorance of the law into account• Apply consistent and specific screening methods for each job• Establish criteria to evaluate background check results• Conduct regular background screening program audits

Adhere to these practices and you can get the most out of your screening program.


TM

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Notes

Documents

Background Screening How to Navigate the Compliance ...Background Screening: How to Navigate the Compliance Wilderness Presented By: This manual was created for online viewing. State