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Compliance Corder covers articles related to employment decisions due diligence.

Nevada is the latest state to restrict employment-purpose credit reports

On May 25, 2013, SB 127 was signed into law adding Nevada to the fast-growing list of states that restrict employment-purpose credit reports.  Nevada’s new law, which goes into effect October 1, 2013, follows closely the recently enacted legislation in Colorado.  Eight other states (California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington) have similar laws that limit the employers’ use of credit history in personnel decisions.  Aggressive legislative efforts are likely to continue, as Florida, New Jersey, and Pennsylvania are considering similar legislation. But the most restrictive bill yet is pending before the New York City Council. It would prohibit employers from using credit reports in hiring except in few instances where such checks are required by law.

June 5th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

Minnesota becomes the latest state to restrict employment criminal checks

On May 13, 2012, Minnesota became the latest state to restrict criminal background checks for employment purposes with its Criminal Background Check Act  (S.F. No. 523). Under the new law, which will go into effect on January 1, 2014, public and private employers may not inquire about, consider or require disclosure of an applicant’s criminal history until after the applicant has been granted an interview or before a conditional offer of employment is made. Since 2009, Minnesota law prohibited only public employers from asking about criminal records on job applications.

According to a report from the National Employment Law Project (the “NELP”) dated in April 2013, six states and 50 localities have adopted “Ban the Box” legislation.  And pending before Congress is the federal HR 6220 or “Ban the Box Act” introduced last July by Representative Hansen Clarke (D-MI-13) which similar to these state and local laws, would make it illegal for an employer to ask about criminal history in an interview or on an employment application.

May 31st, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

Colorado joins list of states that restrict credit report use for employment

Although the FCRA allows employers to consider credit reports for employment purposes, state laws that are more protective of employee rights trump the federal law. Eight states (California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington) and at least one locality, the City of Chicago, limit the employers’ consideration of credit history in personnel decisions. And Colorado was just added to this list with its   S.B. 18 that was signed into law on April 19, 2013. Aggressive legislative efforts are likely to continue. The most restrictive bill yet is pending before the New York City Council. It would prohibit employers from using credit reports in hiring except in few instances where such checks are required by law.

May 6th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

Proposed New Jersey bills restrict use of criminal records in employment decisions

In February 2013, identical bills aimed at reducing employment discrimination against individuals with criminal histories were introduced in the New Jersey Senate (S2586) and the New Jersey Assembly (A3837). Both bills propose the adoption of the Opportunity to Compete Act (the “Act”) which would impose multiple restrictions and requirements on employers in connection with seeking and using criminal background information about job applicants. If the Act is adopted, New Jersey will join a growing list of states, cities, and localities which have passed similar anti-discrimination legislation.

March 29th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , , |

Congress questions legality of “The Work Number” operated by Equifax

Seven members of Congress wrote a letter last month to Equifax asking for more information about its employment verification subsidiary, The Work Number, which according to a statement made by Jackie Speier (D-California), “appears to have operated under the radar, with little public awareness of the vast trove of

[payroll and other] sensitive data it was gathering.”  Speier asserted that “Equifax needs to explain exactly how it is using this data, and provide evidence that The Work Number does not pose a threat to the privacy of 190 million Americans.”

While companies say that they sign up with The Work Number because it gives them a convenient way to outsource employment verifications, the seven members of Congress are disturbed by the fact that “… this massive database appears to generate revenue using consumers’ sensitive personal information for profit.”

March 29th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , |

Revamped Form 1-9 makes its debut

On March 8, 2013, the U.S. Citizenship and Immigration Services (the “USCIS”) announced that its newly revised Form I-9 is to be used immediately. Notably, as indicated in the Federal Register, the USCIS granted companies until May 7, 2013 to implement the new form, which purportedly has been designed to minimize completion errors. This 60-day grace period allows employers time to adjust their human resource processes, and modify their software. The USCIS has also updated its “Handbook for Employers – Guidance for Completing the Form I-9” (3.8.13 version) to correspond to the new form, and is holding webinars to educate companies in the form’s usage.

The USCIS noted that employers do not need to complete the new form for employees for whom they already have a proper Form I–9 on file, unless re-verification applies. Unnecessary verification may violate the anti-discrimination provision of section 274B of the INA, 8 U.S.C. 1324b, which is enforced by the DOJ’s Office of Special Counsel for Immigration Related Unfair Employment Practices.

March 29th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , , |

No shortcuts to assuring maximum possible accuracy under the FCRA

When Congress formulated the Fair Credit Reporting Act (“FCRA”) more than 30 years ago, it noted that the law was enacted in order to protect consumers against “the trend toward…the establishment of all sorts of computerized data banks

[that placed a consumer] in great danger of having his life and character reduced to impersonal ‘blips’ and key punch holes in a stolid and unthinking machine which can literally ruin his reputation without cause [116 Cong. Rec. 36570].” This intent has been clearly supported by the amendments that followed allowing greater and more effective protection. But despite the leaps and bounds in legislation, much controversy still exists about the level of protection that this law provides to consumers.  And confusion abounds about the compliance requirements for consumer reporting agencies (“CRAs”) on whom the FCRA places “grave” compliance obligations. “There is a need to insure that consumer reporting agencies exercise their ‘grave’ responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy [15 U.S.C. § 1681(a)(4) (2006)].”

The FCRA mandates that “[w]henever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates [15 U.S.C. § 1681e(b)].” So what does this mean? Courts have taken two positions in interpreting the language of this section. The “consumer-friendly” version holds CRAs liable for reports that are technically accurate, but may be misleading or incomplete. (Koropoulos v. Credit Bureau, Inc., 734 F.2d 37, 40; D.C. Cir. 1984: “Congress did not limit the Act’s mandate to reasonable procedures to assure only technical accuracy; to the contrary, the Act requires reasonable procedures to assure maximum accuracy.”) The “business friendly” interpretation requires only technical accuracy in the CRA’s reporting.  [Todd v. Associated Credit Bureau Servs., Inc., 451 F. Supp. 447, 449 (E.D. Pa. 1977)].

While this case law is helpful in understanding the CRA’s liability under the statute, there is no doubt that a comprehensive guidance on the methodology to assure maximum accuracy is still much needed especially in view of the proliferation of the so-called “national databases” in the recent years. But despite the lack of clear guidance, a reputable CRA knows that “to assure” means “to earnestly inform or tell positively; state with confidence.” And reporting a record that was identified by name only or relying solely on private database record information in an employment background check does not pass the reasonable procedures test by any standard.

In an Internet marketplace that touts instant results, a CRA’s practice of sending searchers to the courthouse, pulling dozens of cases, and reviewing legal documents to ascertain correct subject identification and record information may be counterintuitive for many employers. And it takes time and money to assure the most accurate and up-to-date results. On the other hand, in a world of over a million people, is a quick and cheap database background search of any real value?

January 7th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , |

California limits social media use by employers and educational institutions

Effective January 1, 2013, California will join Maryland and Illinois in significantly restricting employers’ access to their employees’ and job applicants’ social media accounts. Signed into law by Governor Jerry Brown on September 27, 2012 and fittingly announced via Twitter, AB 1844 provides that an employer cannot require or request an employee or applicant to do any of the following:

  • disclose a username or password for the purpose of accessing personal social media;
  • access personal social media in the presence of the employer;
  • divulge any personal social media, except as provided in subdivision.

The law also prohibits an employer from discharging, disciplining, or otherwise retaliating against an employee or applicant for not complying with a request or demand by the employer that violates these provisions. However, an employer is not prohibited from terminating or taking an adverse action against an employee or applicant if otherwise permitted by law.

The law does preserve an employer’s rights and obligations to request that an employee divulge personal social media information reasonably believed to be relevant to an investigation of allegation(s) of employee misconduct or violation of applicable laws and regulations, provided that the information is used solely for purposes of that investigation or a related proceeding. An employer is also not precluded from requiring or requesting that an employee disclose a username or password for the purpose of accessing an employer-issued electronic device.

A companion law, AB 1349 that establishes similar requirements for postsecondary education institutions in regard to their students also goes into effect on January 1, 2013.

January 7th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , , |

State laws restricting the use of criminal records gain momentum

By now, most employers are familiar with the EEOC’s April 2012 updated enforcement guidance on the use of arrest and conviction records for employment decisions under Title VII of the Civil Rights Act of 1964. And related state and local laws are quickly gaining momentum. More than 30 cities and at least 26 states now limit the type of criminal background information that employers can obtain or when they can request it.

Effective July 1, 2012, Indiana will join the roster of the restricting states. Its  SB 1033 will, in part, ban certain pre-employment inquiries, limit the types of criminal record information that employers and consumer reporting agencies (CRAs) can obtain from Indiana courts, and restrict criminal history information that CRAs can provide in background reports.

This law also provides that Indiana residents with restricted or sealed criminal records may legally state on an “application for employment or any other document” that they have not been adjudicated, arrested or convicted of the offense specified in these records. Covered employers (the term “employer” is not defined) will be prohibited from asking an “employee, contract employee, or applicant” about such records.

Limiting the scope that can be included in a background report, the law further prohibits courts from disclosing information pertaining to alleged infractions where the individual:

  • is not prosecuted or if the action is dismissed;
  • is adjudged not to have committed the infraction;
  • is adjudged to have committed the infraction and the adjudication is vacated; or
  • was convicted of the infraction and satisfied any judgment attendant to the infraction conviction more than five years ago.

Criminal history providers, such as CRAs, that obtain criminal history information from the state may only furnish information pertaining to criminal convictions, and are prohibited from including the following in background reports:

  • an infraction, an arrest or a charge that did not result in a conviction;
  • a record that has been expunged;
  • a record indicating a conviction of a Class D felony if the Class D felony conviction has been entered as or converted to a Class A misdemeanor conviction; and
  • a record that the criminal history provider knows is inaccurate.

Among other significant mandates, criminal history information obtained from the state by CRAs may not include any Indiana criminal record information in an assembled report unless the CRA updates the information to reflect changes to the official record occurring 60 days or more before the date the criminal history report is delivered.

January 7th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , |

Diploma mill ordered to pay $22.7 million to 30,000 scam victims

On August 31, 2012, Belford High School, Belford University and several of their co-conspirators were ordered to pay $22.7 million to a class of more than 30,000 U.S. residents who were duped into purchasing fake high school diplomas from Belford. The defendants were also ordered to forfeit the websites used to perpetrate the scam, including www.belfordhighscool.com, www.belfordhighschool.org, www.belforduniversity.org, and www.belforduniversity.com.

The lawsuit, filed on November 5, 2009, charged that Belford High School is an Internet scam that defrauded students of their money by offering them a supposedly “valid” and “accredited” high school diploma. As affirmed by the judgment, the school is a fake and the diplomas are not valid. The lawsuit also alleged that the two accrediting agencies by which Belford claimed to be accredited – International Accreditation Agency for Online Universities and the Universal Council for Online Education Accreditation – are not legitimate accrediting agencies.

Notably, we came across Belford University in 2010 when a bachelor’s degree from the “school” was listed on an employment application by a candidate for a professional level position with one of our clients. Click here to read the 2010 blog.

 

December 18th, 2012|Categories: Compliance Corner for Employment Decisions|Tags: , , , , |
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