Insights & Resources for Employers

Kenneth Morales • June 17th, 2011

Alabama Governor Signs Law Requiring All Businesses to Begin Using E-Verify

On June 9, 2011, Alabama Governor Bentley signed HB 56, which is similar to Arizona's immigration legislation.

Penalties for violations include probation, the loss of business license for the offending location, and ultimately the loss of business license for all locations throughout the state.

Kenneth Morales • June 6th, 2011

Employers Settle FCRA Documentation Class Actions for $5.9 Million

First Transit and First Student are apparently related companies that provide transportation services to school. They recently settled class action claims against them for three alleged violations of the Fair Credit Reporting Act:

One important lesson from this case is in how to make the required disclosure. The FCRA requires an employer to present the disclosure to the consumer “in a document that consists solely of the disclosure,” but allows the employer to include the required authorization in that document. For example, the disclosure must not be in the employment application. According to one of the pleadings in the case, the document included a release of liability for the consumer reporting agency. Since the case was settled, we can’t know whether the plaintiffs would have won, but drafting to the most extreme possible interpretation of the FCRA could have avoided the claim.

Another important lesson is the impact of big, disruptive events. The websites of First Transit and First Student both reflect that they acquired Laidlaw in 2007. Large acquisitions like this one are usually followed by rapid consolidation, including the acquiring company’s application its pre-existing policies to the employees of the acquired company. According to a pleading in this case, the companies ran background checks on thousands of employees acquired in the acquisition without first obtaining authorizations. One can guess that the acquiring companies thought that the employees’ files would have everything needed to run a new background check.

In the resulting settlement, class members received a total of $1.2 million for the first claim and $2.1 million for the second claim. To collect these amounts, they did not have to show that any adverse action was taken or that the reports were inaccurate. These were simply claims of a technical failure to have the right documentation.

Kenneth Morales • May 25th, 2011

backgroundchecks.com Legislation and Compliance Update - Social Security Administration (SSA) to Begin Randomizing Social Security Numbers (SSNs)

The Social Security Administration (SSA) has announced plans to begin randomizing Social Security Numbers (SSNs). This move will change the way in which third-party providers like backgroundchecks.com can verify SSNs.

Kenneth Morales • May 24th, 2011

District Court Allows Class Action Suit Based On Technical Failures to Comply with FCRA

FCRA

Legal

In the case, the employer obtained and used background reports for employment purposes. The employer allegedly did two things wrong.

The court found that the plaintiff could win based on these claims if she proved them. On the first claim, this means the court found that the plaintiff can win by proving that the disclosure was included in a general employment application. On the second claim, the court found that the plaintiff can win by showing that the period of time between the two notices was not reasonable.

Employers should review their current practices. To avoid expensive class actions like this one, employers should not include FCRA-required disclosures in the same document as a general employment application and should wait at least five days after sending a pre-adverse-action notice before sending an adverse-action notice.

HubSpot System • May 20th, 2011

Georgia and Indiana Pass Laws Requiring Employers to Utilize E-Verify

Both Georgia and Indiana have enacted laws requiring some or all employers in their states to use E-Verify to check the work eligibility status of new employees.

Social Security Administration (SSA) to Begin Randomizing Social Security Numbers (SSNs)

The Social Security Administration (SSA) has announced plans to begin randomizing Social Security Numbers (SSNs). This move will change the way in which third-party providers such as GIS can verify SSNs.

Legislation and Compliance Update: New Guidance from Office of Inspector General on permissive exclusion authority

The Department of Health and Human Services Office of Inspector General (OIG) has released a new guidance on the implementation of its permissive exclusion authority. This new guidance outlines four factors that will be considered when determining whether to exclude an individual.

Kenneth Morales • May 9th, 2011

Federal Reserve Board Issues New Report Studying the Disparate Impact of Credit Histories

The use of credit reports in employment decisions has recently become a controversial issue. It has been put up for debate whether or not making hiring decisions based on credit history could have a disparate impact on racial and ethnic minorities with the end result of hiring fewer minority applicants. A recent report from the Federal Reserve Board calls into question the generally held belief that hiring decisions based in part on credit histories have a disparate impact on racial and ethnic minorities. Rather than analyzing the potential disparate impact in hiring decisions, the October 12, 2010 report analyzed a parallel question: whether the use of credit scores in lending would have a disparate impact on applicants for loans. An important distinction between these two questions is that employment-purpose credit reports do not show a credit score; but they do show the types of information that credit bureaus use in their calculations of credit scores.

Legislation and Compliance Update: North Carolina Administrative Office of the Courts Proceeds with Proposed Data Changes

The North Carolina Administrative Office of the Courts (AOC) has proceeded with their plans announced last December to change the manner in which data is returned to third-party providers such as backgroundchecks.com. This change reduces instant results for criminal records to basic elements (name, DOB, case number, etc) without an indication of the charges or disposition. While a court case is pending to return the results to their previous standard, an injunction has been denied, allowing North Carolina to provide the significantly limited data pending the lawsuit’s final judgment.

Kenneth Morales • April 7th, 2011

background checks questions and answers - county and state criminal record check

County and state criminal history searches: which is important and which is indispensable? Let’s start with county criminal history searches. Knowing what we now do about criminal history databases, many of you are probably unsure why a county criminal history is necessary. There is a reason why we recommend that US OneSEARCH be run with a county criminal history search rather than as a standalone search. As stated previously, county criminal history searches are perfect for digging deep and getting every available detail in targeted areas. Most importantly, county criminal history searches are most likely to yield felony or misdemeanor charge results.

HubSpot System • March 17th, 2011

North Carolina Administrative Office of the Courts Proceeds with Proposed Data Changes

The North Carolina Administrative Office of the Courts (AOC) has proceeded with their plans announced last December to change the manner in which data is returned to third-party providers such as backgroundchecks.com.

While a court case is pending to return the results to their previous standard, an injunction has been denied, allowing North Carolina to provide the significantly limited data pending the lawsuit’s final judgment.

background checks questions and answers - definition of a name and address history search

Which is the most basic definition of a name and address history search?

Your Right to a Safe Home – How Background Checks Can Help

In 2006, Tammara Erica Reed was murdered while visiting one of the residents of a complex on Acovy Road. The murderer was Willie R. Gunn, who held four prior convictions that were marked on a criminal background check: two convictions for DUIs, one for shoplifting and one for sexual battery with solicitation for criminal sodomy with a minor. He had also committed murder previously, which was marked on file in the county clerk’s office.

Late last year, the jury voted in favor of Reed’s family, granting $1.35 million due to the fact that the housing complex authorities were aware of Gunn’s criminal history, and contrary to their own housing agreement, leased the property to Gunn while failing to give adequate security to residents.

During his housing interview and on his application, Gunn lied about his criminal past, though the housing directors found the truth with a background check. The former housing authority director, Faith Johnson, admitted she was aware of the convictions, including the murder, but granted Gunn housing regardless, though it was contrary to their own housing agreements.

Seeking damages for the physical and mental pain of the surviving family members, suffering, funeral expenses and the full value of her life, the family was originally awarded $1.5 million. After a five day trial and six hour deliberation, this price was reduced by 10 percent, as Gunn was held responsible for 10 percent of the fault. The resulting money will be paid to Reed’s surviving two sons, who are now six and seven years old.

Gunn was sentenced to life in prison without the possibility of parole. He was also sentenced for possession of a firearm, though he was a convicted felon. Whether the seller of the firearm utilized a background check or not is not clear. According to witnesses, Gunn and Reed had an argument the previous night of the shooting about a set of car keys. Utilizing background checks is an important step for housing providers, and it is important to think of ways tragedies like this can be avoided in the future.

Kenneth Morales • February 7th, 2011

Is Your Own Criminal Records Check Really Worth It?

A criminal records check isn’t just about looking into the history of the people you come into contact with every day. We’ve all heard about the companies that run criminal history checks on their employees, either voluntarily or because it is a legal requirement, and we’ve also heard about private citizens that use information from the sex offender registry to make sure their neighborhood is safe. Sometimes, though, the most beneficial background check is the one you do on yourself.

Legislation and Compliance Update - HIPAA Final Rules Deadline Announced

The deadline for the final rule on modifications to HIPAA privacy, security, and enforcement rules is March, The Department of Health and Human Services (HHS) writes in its semi-annual regulatory update—published last month in the Federal Register.

Refining Job Applicants with Background Checks

The employees you hire determine the success of your business. So if you want to be profitable, you can’t afford to be lax in your hiring process. The economy has had a strange effect on the hiring process, in that more people are applying for fewer positions, and if you aren’t careful, then you might be overwhelmed with the number of responses to your advertisement.

Sometimes, the need to fill a position immediately means that you do not have much time to carefully consider each applicant. With the competitive marketplace, you might think you have found the perfect resume, only to find out later that the applicant was a little too liberal when describing their work experience and credentials. While most people will not lie outright on their resumes, if they have something to hide (such as a criminal background) you might not know about it until after you have already hired them.

You want to give your human resources department all the tools they need to make a good decision, and background checks are a great way to ensure your future employees meet all your legal requirements.

Recently, employment background checks have become more advanced, and they let you verify dates of employment, job titles, recommendations and salary history. While you might not do this type of screening during the first round of interviews, once you become serious about an individual, it is increasingly important to run background checks.

Applicants who hold criminal pasts are more likely to stretch the truth on their resume. CareerBuilder.com published a survey that said 49 percent of employers had noticed applicants who fudged more than they thought appropriate.

To filter out unqualified applicants or to ensure you have made the right choice, a background check can help give you peace of mind in the employment process.

Kenneth Morales • December 30th, 2010

Background checks questions and answers - why carry out a national criminal database search

Today in our journey in continuing education, we’re going to tackle backgroundchecks.com instant database search options which we consider to be the best and the brightest of national criminal databases.

Economic recession leads to higher crime and resume fraud

As layoffs continue and jobs remain scarce, the competition for those scant few job openings becomes fierce. For those companies that are still hiring, and even those who are simply retaining employees, this recession leads to an even greater need to screen applicants and rescreen current employees. Well before the economic downturn officially became a recession, experts estimated that 50%-60% of people lied on their résumés and 23%-45% of résumés contained substantially misleading or inaccurate information.

Compliance and Legislation Update - Randomizing Social Security Numbers

Everyone is familiar with the basic format of a Social Security Number—3 digits, 2 digits, 4 digits. Each of these sets of numbers have historically had significance more than simple randomization, though. Since the inception of SSNs in 1936, the first three digits have indicated area, the second two have indicated group, and the final four have been random and are known as a serial number. Beginning in 1972, when SSNs started to be issued by a central location (instead of the traditional field offices in each state), the three-digit area number indicated state as determined by the zip code provided on the application.

This means that, for as long as SSNs have been in existence, you could determine someone’s origin based on the first three numbers. It’s as simple as 261 is a Floridian, 303 a Hoosier, 134 a native New Yorker, and 387 a Cheesehead.

This will not necessitate a direct reaction from you, however this will cause some issues when it comes to SSN validation. Currently, the SSA issues a monthly table called the High Group List that shows the assigned states and issuance range for the first five digits of an SSN. This table is used to determine the validity of an SSN but, once the patterns are gone, this table can no longer be updated.

So what does this mean to you? For the most part, our process will not change—let’s face it, the majority of the people receiving these new format SSNs won’t be entering the workforce for another 15 years at best. The real difference is in those who are being issued new SSNs for any reason other than birth, from recovering from a stolen identity to immigration.

BackgroundChecks.com Hits Milestone - National Criminal Database Reaches 400 Million Records

The national criminal database service from backgroundchecks.com has reached 400 million records. BackgroundChecks.com is a leading provider of background screening services. According to Craig Kessler, president of backgroundchecks.com, the size of a national criminal database is significant.

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