A Brief Overview              of Laws Affecting                 Employment                 Background                Inves...
Why Employers RunBackground Checks
Why Employers RunBackground Checks            Jeffrey Hefling
Why Employers RunBackground Checks  Michael Gilbert
Why Employers RunBackground Checks
Why Employers RunBackground Checks
Why Employers RunBackground Checks          Stephen Robertson
Why Employers RunBackground Checks       2009 National Retail Security Survey
Why Employers RunBackground Checks
The federal Fair Credit Reporting Act     governs consumer reports.
FCRA applies to info collected by a thirdparty to be used for certain purposes. Insurance Underwriting                Exte...
FCRA applies to reports about“consumers.”     Consumer def: “An individual”
Report providers (investigators) areConsumer Reporting Agencies. Consumer Reporting Agency def: Anyone who, “for monetary ...
Report providers (investigators) areConsumer Reporting Agencies. Consumer Report def:  “Any written, oral, or other commu...
FCRA applies to background checksprovided to employers.                             DrivingCredit Reports               Hi...
Disclosure must be made and writtenauthorization received by employer.
Disclosure must be made and writtenauthorization received by employer.
The FCRA has two standards foraccuracy of reported information.        Accuracy of Information (all information) “Whenever...
Disclosure must be made and writtenauthorization received by employer.        Accuracy of Public Record Information The CR...
The FCRA limits what can be reported in        background checks.
The FCRA limits what can be reported in        background checks.                     Reportability of Negative Informatio...
The FCRA limits what can be reported in        background checks.                     Reportability of Negative Informatio...
The employer must provide informationprior to making an adverse decision.
The employer must provide additionalnotice after taking the adverse decision.
The CRA has 30 days to reinvestigate     any disputed information.       MY LAWYER SAID THAT        WOULDN’T SHOW UP      ...
Sample State Consumer Reporting LawsTexas’ only restriction (limiting allinformation to seven years) wasinvalidated by the...
Sample State Consumer Reporting Laws The authorization and consent must  contain a “box” for the consumer to  check to re...
Sample State Consumer Reporting Laws          Employers may not consider non-           conviction criminal information. ...
Sample State Consumer Reporting Laws                     Employers may not inquire                      about criminal re...
Sample State Consumer Reporting Laws                   Many states have                   passed or are                   ...
Title VII of Title VII of the of 1964             the Civil Rights Act    Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964    Prohibits both intentional discrimination     (“disparate treatment”) and se...
Title VII of the Civil Rights Act of 1964 Criminal Records Brightline Rule: Have you ever been arrested?  No  Yes (pleas...
Title VII of the Civil Rights Act of 1964When reviewing criminal records, an employer must consider:    – The relevance of...
Protected Classes under Federal Law                     •   Age                     •   Race                     •   Sex  ...
EEOC Activity 99,922 charges filed in 2010 (20% increase  since 2005) E-RACE (Eradicating Racism and Colorism  from Empl...
EEOC Activity Anticipates an $18M budget increase allocated  to:   improve enforcement initiatives,   reduce the backlo...
EEOC v. Freeman Companies
EEOC v. Kaplan Higher Education Corp.
EEOC v. PeopleMark
State EEO LawsMany states have their own equal employmentopportunity or human rights laws.   Washington state will not al...
Ban The Box Initiatives
Ban The Box Initiatives Massachusetts: Employers may not inquire about criminal  records on the initial written applicati...
Ban The Box Initiatives Similar legislation is pending in Nebraska, New Jersey,  and Rhode Island. Minnesota considering...
Questions?
A Brief Overview of Laws Affecting Background Checks
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A Brief Overview of Laws Affecting Background Checks

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This presentation was made to a Texas Association of Licensed Investigators meeting in May 2011.

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A Brief Overview of Laws Affecting Background Checks

  1. 1. A Brief Overview of Laws Affecting Employment Background InvestigationsMike Coffey, SPHRPresidentImperative Information Group
  2. 2. Why Employers RunBackground Checks
  3. 3. Why Employers RunBackground Checks Jeffrey Hefling
  4. 4. Why Employers RunBackground Checks Michael Gilbert
  5. 5. Why Employers RunBackground Checks
  6. 6. Why Employers RunBackground Checks
  7. 7. Why Employers RunBackground Checks Stephen Robertson
  8. 8. Why Employers RunBackground Checks 2009 National Retail Security Survey
  9. 9. Why Employers RunBackground Checks
  10. 10. The federal Fair Credit Reporting Act governs consumer reports.
  11. 11. FCRA applies to info collected by a thirdparty to be used for certain purposes. Insurance Underwriting Extension of Credit Employment
  12. 12. FCRA applies to reports about“consumers.” Consumer def: “An individual”
  13. 13. Report providers (investigators) areConsumer Reporting Agencies. Consumer Reporting Agency def: Anyone who, “for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or part in the practice of assembling or evaluating… information on consumers to third parties, and uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.”
  14. 14. Report providers (investigators) areConsumer Reporting Agencies. Consumer Report def: “Any written, oral, or other communication…by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, or credit capacity, character, general reputation, personal characteristics, or mode of living …which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for… employment purposes”
  15. 15. FCRA applies to background checksprovided to employers. DrivingCredit Reports Histories Criminal Records Verifications
  16. 16. Disclosure must be made and writtenauthorization received by employer.
  17. 17. Disclosure must be made and writtenauthorization received by employer.
  18. 18. The FCRA has two standards foraccuracy of reported information. Accuracy of Information (all information) “Whenever 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.”
  19. 19. Disclosure must be made and writtenauthorization received by employer. Accuracy of Public Record Information The CRA must ensure that the information reported “matches the status of the item at the time the report is requested,” (this is the best practice) or “notify the consumer that the negative public record information is being reported, along with the name and address of the employer to whom the report is being provided.” (Commonly called “contemporaneous notification.”)
  20. 20. The FCRA limits what can be reported in background checks.
  21. 21. The FCRA limits what can be reported in background checks. Reportability of Negative Information Age < 7years Age > 7 years, Age > 7 years, wages < $70K wages > $70K Non-conviction criminal Reportable Not reportable Reportable cases under federal under federal under federal (dismissals, acquittals, law law law cases not prosecuted – includes cases dismissed upon completion of deferred adjudication) Civil cases, liens, Reportable Not reportable Reportable judgments, credit items under federal under federal under federal law law law
  22. 22. The FCRA limits what can be reported in background checks. Reportability of Negative Information Age < 7years Age > 7 years, Age > 7 years, wages < $70K wages > $70K Criminal cases ending Reportable Not reportable Reportable in conviction (guilty) under federal under federal under federal law law law Age < 10 years Age > 10 years, Age > 10 years, wages < $70K wages > $70K Bankruptcy Reportable Not reportable Reportable under federal under federal under federal law law law
  23. 23. The employer must provide informationprior to making an adverse decision.
  24. 24. The employer must provide additionalnotice after taking the adverse decision.
  25. 25. The CRA has 30 days to reinvestigate any disputed information. MY LAWYER SAID THAT WOULDN’T SHOW UP ON MY RECORD!!!!
  26. 26. Sample State Consumer Reporting LawsTexas’ only restriction (limiting allinformation to seven years) wasinvalidated by the Fair and AccurateCredit Transactions Act (FACTA),though it is still widely quoted byattorneys and screening firmsunfamiliar with the interplay of thestate and federal laws.
  27. 27. Sample State Consumer Reporting Laws The authorization and consent must contain a “box” for the consumer to check to receive a copy of the report. Employers may not inquire about sealed records and applicants may state that they have no conviction
  28. 28. Sample State Consumer Reporting Laws  Employers may not consider non- conviction criminal information.  Convictions can only be reported for seven years (including murder, rape, arson, etc.)  Special protections for marijuana convictions and sex offenders.  Special notices to applicants when obtaining consent to procure background check.
  29. 29. Sample State Consumer Reporting Laws  Employers may not inquire about criminal records on the initial written application. Time limits effective 2012:  Felonies: 10 years  Misdemeanors: 5 years  Murders, manslaughter and certain sexual offenses: no limit
  30. 30. Sample State Consumer Reporting Laws Many states have passed or are considering laws to limit employers’ use of credit reports.
  31. 31. Title VII of Title VII of the of 1964 the Civil Rights Act Civil Rights Act of 1964
  32. 32. Title VII of the Civil Rights Act of 1964  Prohibits both intentional discrimination (“disparate treatment”) and seemingly neutral policies without business necessity that have adverse impacts on protected classes (“disparate impact” - see Griggs v. Duke Power)  Policies must have a manifest relationship to employment role with no viable alternatives to qualify as a business necessity  Heavily impacts employment qualifications, tests, and background checks
  33. 33. Title VII of the Civil Rights Act of 1964 Criminal Records Brightline Rule: Have you ever been arrested?  No  Yes (please deposit your application in the trashcan on your way out)
  34. 34. Title VII of the Civil Rights Act of 1964When reviewing criminal records, an employer must consider: – The relevance of the offense to the position, including severity and time passed since the offense – The reasonable likelihood that the person committed the offenseDisposition (final judicial outcome) is not the issue!See EEOC Policy Statement on the Issue of Conviction Records underTitle VII of the Civil Rights Act of 1964 and Policy Guidance on theConsideration of Arrest Records in Employment Decisions under Title VII of theCivil Rights Act of 1964
  35. 35. Protected Classes under Federal Law • Age • Race • Sex • National origin • Religion • Marital status • Disability
  36. 36. EEOC Activity 99,922 charges filed in 2010 (20% increase since 2005) E-RACE (Eradicating Racism and Colorism from Employment) initiative looks for systemic discrimination (disparate impact claims) Expects 110K charges in 2011
  37. 37. EEOC Activity Anticipates an $18M budget increase allocated to:  improve enforcement initiatives,  reduce the backlog,  target systemic litigation, and  reinvigorate Federal Sector enforcement.
  38. 38. EEOC v. Freeman Companies
  39. 39. EEOC v. Kaplan Higher Education Corp.
  40. 40. EEOC v. PeopleMark
  41. 41. State EEO LawsMany states have their own equal employmentopportunity or human rights laws.  Washington state will not allow employers to consider any criminal records older than ten years.  6 states have “job-relatedness” requirements for the consideration of criminal records.  Texas has no such limitations.
  42. 42. Ban The Box Initiatives
  43. 43. Ban The Box Initiatives Massachusetts: Employers may not inquire about criminal records on the initial written application. Minnesota, Connecticut & New Mexico: Public employers may not inquire about criminal records on the initial written application. Hawaii: Employer may inquire only after an offer of employment is made More than 2 dozen cities have passed similar ordinances including Philadelphia (04/2011), Baltimore, Memphis, and San Francisco
  44. 44. Ban The Box Initiatives Similar legislation is pending in Nebraska, New Jersey, and Rhode Island. Minnesota considering extending the ban to private employers. Nationwide, community groups are pushing for new legislation at all levels
  45. 45. Questions?

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