Last week at the annual NAPBS conference, backgroundchecks.com announced the launch of a web video series and demonstrated the strengths of the multi-jurisdictional database search through a video display at our booth. Many of our clients who viewed the new video mentioned not only how helpful the video would be in educating their clients who may not understand the value of using a multi-jurisdictional database but how helpful it would be as a sales training tool for their staff.

backgroundchecks.com is committed to providing educational tools to our customers and additional marketing concepts for our resellers to help them educate clients and drive more revenue and we are excited to be able to offer videos like this. You can watch a video introducing our company or the video about the strengths of the multi-jurisdictional database search now. More videos will be made available at a later date.

About backgroundchecks.com

backgroundchecks.com - a founding member of the National Association of Professional Background Screeners (NAPBS®) and co-founder of the Expungement Clearinghouse - serves thousands of customers nationwide, from small businesses to Fortune 100 companies by providing comprehensive screening services. Headquartered in Dallas, Texas, with an Eastern Operations Center in Chapin, S.C., backgroundchecks.com is home to one of the largest online criminal conviction databases in the industry. For more information about backgroundchecks’ offerings, please visit www.backgroundchecks.com.

The Equal Employment Opportunities Commission has issued new enforcement guidance on employers' use of criminal history in employment decisions. The Commission adopted the new guidance by a vote of 4 to 1 on April 25. The new guidance and related documents are available on the EEOC's website at:

·         EEOC Press Release;

·         Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1984 (html);

·         Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1984 (pdf), and

·         Questions and Answers About the EEOC’s Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII.

Industry and legal commentary on the new guidance has generally found that the guidance does not prohibit employers use of criminal history and does not pose severe barriers. Thus far, commentary notes that employers will need to review their policies and processes and raises concerns about potential conflicts between state laws and the EEOC guidance. These commentaries include:

·         Commentary from a Human Resources Executive;

·         Detailed Commentary from Seyfarth Shaw;

·         Society for Human Resource Management Regulatory Alert, and

·         Commentary from the Society for Human Resource Management.

The situation

Offshoring is running rampant in the United States. For many companies this is a standard and acceptable business practice. Most of the companies that offshore, however, are offshoring rather innocuous jobs – customer service, coding, things that don’t allow access to a person’s PII or Personally Identifiable Information.

The background screening business doesn’t fit into this category. While many outsource, it is the nature of the business that there is very little outsourcing that could be done that doesn’t include access to PII.

In response, the California Investigative Consumer Reporting Agencies Act (ICRA), was updated. Effective January 1, 2012, any Consumer Reporting Agency (aka CRA aka background check company) that does business in California must have information regarding any offshoring of a consumer’s PII.

The bill, which is detailed here, states that this notification to the consumer should be part of the disclosure. Details regarding offshoring of PII don’t have to be divulged in the disclosure, however they must provide information for a website or telephone number where information regarding offshoring can be found.

It’s not because we don’t care. It’s also not because we don’t have any locations in California and were hoping to skirt the rule that way. No, backgroundchecks.com isn’t adding a lengthy disclosure about offshoring for the simple reason that we do not offshore our processes. The only time we send work to anyone outside the US is when we are running an international background check that requires information that originates in another country.

So if you’ve heard about this bill, you can relax and kick up your heels because there’s nothing for you to worry about.

The Federal Trade Commission has released guidance for employers who use consumer reports for employment purposes. The guidance reminds that a report on a person’s character such as a report that includes criminal history is a consumer report if anyone will use it for employment purposes, which includes employment, promotion, reassignment, or retention as an employee.  

The FTC and the courts have previously said that the phrase “as an employee” only applies to the word “retention,” so the terms employment, promotion, and reassignment can relate to any activity that produces income, even if it is not normally considered employment. The new guidance reminds employer in plain English of their obligations when using consumer reports for these purposes. Employers may find it to be a good checklist when evaluating the compliance of their programs.

If you are a backgroundchecks.com customer and have questions, please contact Client Services. All other inquiries can be sent to info@backgroundchecks.com.

In 2010, Massachusetts enacted a new law governing the use of criminal records for employment in Massachusetts. Since then, the Massachusetts legislature delayed the effective date of some of the parts of the law that would have come into effect on February 6, 2012. The new effective date is May 4, 2012. The change is buried deep in the general appropriations act for 2010 and 2011 (section 102 of Chapter 359 of the Massachusetts session laws).

One key component that employers must address before May 4 is this requirement:

A person who annually conducts 5 or more criminal background investigations, whether criminal offender record information is obtained from the department or any other source, shall maintain a written criminal offender record information policy providing that, in addition to any obligations required by the commissioner by regulation, it will: (i) notify the applicant of the potential adverse decision based on the criminal offender record information; (ii) provide a copy of the criminal offender record information and the policy to the applicant; and (iii) provide information concerning the process for correcting a criminal record.

Employers who do not already have a more elaborate policy may want to adopt a simple policy similar to the following:

The company’s policy is that, before making an adverse decision based on criminal offender record information, the company notifies the subject of the potential decision, of the criminal offender record information on which the potential adverse decision would be based, of this policy, and of how to correct a criminal record.

A company that follows this recommendation should send an additional letter just to Massachusetts applicants. The key part of the letter would include text like the following:

The company’s policy is that, before making an adverse decision based on your criminal offender record information, we notify you of the potential decision, of the criminal offender record information on which we might make an adverse decision, of this policy, and of how to correct a criminal record. This letter notifies you of these items.

To correct a criminal record, please contact backgroundchecks.com customer service. at the number below. We will assist you by identifying the court or agency to contact.

Since this policy and statement would be true for all applicants and employees, we see no reason to limit them to Massachusetts applicants and employees.

The other key component that employers must implement by May 4 is this requirement:

In connection with any decision regarding employment, volunteer opportunities, housing or professional licensing, a person in possession of an applicant’s criminal offender record information shall provide the applicant with the criminal history record in the person’s possession, whether obtained from the department or any other source prior to questioning the applicant about his criminal history. If the person makes a decision adverse to the applicant on the basis of his criminal history, the person shall also provide the applicant with the criminal history record in the person’s possession, whether obtained from the department or any other source; provided, however, that if the person has provided the applicant with a copy of his criminal offender record information prior to questioning the person is not required to provide the information a second time in connection with an adverse decision based on this information.

This requirement primarily affects the hiring process depending on whether the background check or the interview happens first. If the background check happens first, you must provide a copy of the information to the applicant before asking the applicant about it. (Technically, this could happen outside the interview – it is just more likely to happen inside the interview.) Remember that the part of the law already in effect makes it illegal:

For an employer to request on its initial written application form criminal offender record information; provided, however, that except as otherwise prohibited by subsection 9, an employer may inquire about any criminal convictions on an applicant’s application form if: (i) the applicant is applying for a position for which any federal or state law or regulation creates mandatory or presumptive disqualification based on a conviction for 1 or more types of criminal offenses; or (ii) the employer or an affiliate of such employer is subject to an obligation imposed by any federal or state law or regulation not to employ persons, in either 1 or more positions, who have been convicted of 1 or more types of criminal offenses.

Our view is that the risk-averse reading of this statute is to treat any collection of information from the applicant as the “initial written application form” if it occurs before an interview. Of course, the background check that you request from a background screening agency is not a request on the application form at all. Together with the part of the law cited above, this means that the first time you can ask your applicant about criminal history is during the interview. This rule also has the benefit of being easy for managers to follow.

These requirements apply to any employer that does business in and takes employment applications in Massachusetts. But employers should note that the Massachusetts Commission against Discrimination reserves the right to examine other scenarios on a case-by-case basis.

We are not a law firm and cannot give legal advice. We have not (and cannot legally) considered your company’s specific situation when considering the solutions recommended above. If you need that kind of advice, please consult an attorney of your choice.

If you are a backgroundchecks.com customer and have questions about how we can help, please contact your Client Relations Representative.

The Federal Trade Commission warned several mobile app makers that their products may be consumer reports. According to the FTC’s website, these app makers all performed instant database checks into individual’s criminal histories. The FTC noted that this information, if used for employment purposes, is a consumer report. The FTC placed no weight to the presence of a disclaimer on an app that it is not for employment purposes. Instead, the FTC said it would look to indications of actual use, such as where the mobile apps were advertised and who was on the app-makers’ customer lists.

This is critical for employers who use anything other than a regulated consumer reporting agency for their background reports. The FTC and private plaintiffs’ lawyers may hold employers liable for using services similar to these (whether mobile apps or websites) in violation of the Fair Credit Reporting Act. The FTC points out that a consumer report is a consumer report, regardless of whether the companies providing or obtaining it think so. The FTC is absolutely correct.

At a minimum, the FTC and plaintiffs’ lawyers would be able to show a violation of 15 U.S.C. § 1681b(f)(2), which prohibits anyone from obtaining a consumer report without having first certified to a consumer reporting agency the purpose for which the report will be used. Most likely, they would also be able to show a violation of:

·         15 U.S.C. § 1681b(b)(2), which prohibits anyone from obtaining a consumer report for employment without having first told the subject that that it will obtain a consumer report and having obtained the subject’s authorization;

·         15 U.S.C. § 1681b(b)(3), which requires anyone intending to take adverse action based on a consumer report obtained for employment purposes to give a specific notice before taking that action, and

·         15 U.S.C. § 1681m, which requires anyone who takes adverse action based on a consumer report to give a further notice about the action.

It seems probable that the FTC would show this to be a knowing violation, which would entail civil penalties of up to $3,500 per violation. More significantly, plaintiffs’ lawyers would show this to be willful, which means that the employer would be liable for $100 to $1,000 per violation, plus actual damages, plus punitive damages, plus attorney’s fees.

Using a regulated consumer reporting agency like backgroundchecks.com avoids this particular problem. More importantly, it assures employers that the reports on which they make critical hiring decisions were prepared by a responsible agency using processes designed to produce accurate, complete, up-to-date reports. When another service – whether mobile or web – disclaims the FCRA, that is a sign that the report may be too unreliable to be used for hiring.

Tennessee employers are required to demonstrate that they are hiring and maintaining a legal workforce under new requirements that became effective January 1, according to Tennessee Department of Labor and Workforce Development Commissioner Karla Davis.

“This online verification process is designed to be convenient for employers and only takes a few minutes to complete. The department can provide assistance to employers who don’t have Internet access,” said Commissioner Davis.

Signed into law by Governor Bill Haslam on June 7, 2011, the Tennessee Lawful Employment Act (H.B. 1378) requires employers to verify the employment eligibility of all newly hired employees through the online E-Verify program (www.uscis.gov/everify), or requesting all newly hired employees to provide one of the following identity and employment authorization documents as required:

• A valid Tennessee driver's license or photo identification

• A valid driver's license or photo identification from another state where the license requirements are at least as strict as those in Tennessee

• A birth certificate issued by a U.S. state, jurisdiction or territory

• A U.S. government issued certified birth certificate

• A valid, unexpired U.S. passport

• A U.S. certificate of birth abroad

• A report of birth abroad or a citizen of the U.S.

• A certificate of citizenship

• A certificate of naturalization

• A U.S. citizen identification card

• A lawful permanent resident card

The law also requires employers to obtain and maintain a copy of one of the above listed identity/employment authorization documents for all non-employees as well. A “non-employee” is defined as any individual, other than an employee, paid directly by the employer in exchange for the individual’s labor or services.

The employment verification provisions referenced above will be phased in as follows:

• All state and local government agencies must enroll and participate in E-Verify or request and maintain an identity/employment authorization document from a newly hired employee or non-employee no later than January 1, 2012

• All private employers with 500 or more employees must enroll and participate in E-Verify or request and maintain an identity/employment authorization document from a newly hired employee or non-employee no later than January 1, 2012

• All private employers with 200 to 499 employees must enroll and participate in E-Verify or request and maintain an identity/employment authorization document from a newly hired employee or non-employee no later than July 1, 2012

• All private employers with six to 199 employees must register and utilize E-Verify or request and maintain an identity/employment authorization document from a newly hired employee or non-employee no later than July 1, 2013

The Tennessee Department of Labor has authority to impose penalties for non compliance. For a first violation, $500 for each employee or non-employee not verified; for a second violation, $1,000 for each employee or non-employee not verified; and $2,500 for a third violation.

The private employer must submit evidence of compliance within 60 days of the final order. If the employer fails to submit such documentation, then the commissioner has the authority to suspend the private employer's license until the employer remedies the violation.

Any lawful resident of Tennessee or any employee of a federal agency may file a complaint alleging a violation of the employment verification provisions of the Act. If there is satisfactory evidence of a violation, the Commissioner of the Tennessee Department of Labor and Workforce Development will conduct an investigation.

The EEOC has recently made available an opinion letter on the Americans with Disability Act (ADA) and its effect on hiring practices.

As with all other protected classes (e.g. race, gender, age), hiring criteria that have a disparate impact on those with disabilities are only allowed only if job-related and necessary.

In the specific scenario referenced in the letter, the EEOC states that “Under the ADA, a qualification standard, test, or other selection criterion, such as a high school diploma requirement, that screens out an individual or a class of individuals on the basis of a disability must be job related for the position in question and consistent with business necessity. A qualification standard is job related and consistent with business necessity if it accurately measures the ability to perform the job’s essential functions (i.e. its fundamental duties).”

According to the EEOC, the main difference under the ADA (compared to other anti-discrimination laws) is, “Even where a challenged qualification standard, test, or other selection criterion is job related and consistent with business necessity, if it screens out an individual on the basis of disability, an employer must also demonstrate that the standard or criterion cannot be met, and the job cannot be performed, with a reasonable accommodation.”

Employers should review their hiring criteria and determine whether each job requirement is necessary for the job to be done properly and eliminate those job requirements that are not necessary.

For more information on how this may affect your screening program and how backgroundchecks.com can help, please contact our client relationship representatives.

The Equal Employment Opportunity Commission announced settlement of a charge it brought against Pepsi Beverages on behalf of black applicants whom Pepsi had declined to hire due to arrests that had not resulted in convictions or to minor convictions that were not relevant to the position. Pepsi will pay over $3.1m and offer jobs to anyone in the class who is still interested in working for Pepsi.

The EEOC appears to have successfully pressed two theories:

1. According to the EEOC, “Pepsi’s former policy also denied employment to applicants from employment who had been arrested or convicted of certain minor offenses. The use of arrest and conviction records to deny employment can be illegal under Title VII of the Civil Rights Act of 1964, when it is not relevant for the job, because it can limit the employment opportunities of applicants or workers based on their race or ethnicity.”

This is consistent with the EEOC’s long-held position that, to hold a conviction record against an applicant, and employer must show that excluding the applicant based on the conviction is job-related and consistent with business necessity.

In explaining this position, the EEOC cited its long-standing guidance: “When employers contemplate instituting a background check policy, the EEOC recommends that they 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.  Such exclusions can create an adverse impact based on race in violation of Title VII.”

2.    According to the EEOC, “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.”

This is consistent with the EEOC’s long-held position that, to hold a non-conviction against an applicant, an employer must do something beyond finding the criminal history record to determine that the applicant actually committed the offense. Once the employer concludes that the applicant actually committed the offense, then the employer must ensure that excluding the applicant is both job-related and consistent with business necessity, just as it would for a conviction record.

The EEOC’s press release on the subject is available at http://www.eeoc.gov/eeoc/newsroom/release/1-11-12a.cfm.

Pamela Davata, an attorney who represents the National Association of Professional Background Screeners (NAPBS), commented on the action in an Associated Press article available at http://tinyurl.com/7bjamxv.

For more information on how this may affect your screening program and how backgroundchecks.com can help, please contact your client relationship representative.

The Consolidated Appropriations Act, 2012 (H.R. 2055), signed by President Obama on December 23, includes a provision requiring the use of E-Verify for new federal employees. Sec. 629 of the law states:

None of the funds made available by this Act may be expended for any new hire by any federal agency funded in this Act that is not verified through the E-Verify Program established under Section 403 (a) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (8 U.S.C. 1324).