Category Archives: background checks

Warren: Credit Checks are Discrimination

Earlier today, Sen. Elizabeth Warren (D-Mass.) and Rep. Steve Cohen (D-Tenn.) posted an op-ed piece titled “It’s Time to Stop Employer Credit Checks” on Time’s website, based on the idea that a person’s credit history “has no correlation with his or her ability to succeed in the workplace.”

For hardworking people struggling to make ends meet, the pair writes, the only way to get back on their feet is to find a good job and earn a paycheck. But even when they are able to sell their homes—often at a loss—or after they are forced to close their business’ doors or find temporary work, that bad credit history continues to haunt them.

To quote directly from the piece:

And despite the often-desperate effort to find a job, many employers are unfairly shutting the door on applicants with less-than-stellar credit. We should call this what it is: discrimination.

And, Warren and Cohen note, such discriminatory practices are why they are re-introducing the Equal Employment for All Act.

“It would help level the playing field for hardworking families who deserve a fair shake,” they write. “Our legislation would prohibit employers from requiring prospective employees to disclose their credit history as part of the job application process, unless the position requires a national security clearance or a credit report is required under state or local law. It makes sure that hiring decisions are based on an individual’s skill and experience—not on past financial struggles. The bill also would stop discrimination against African Americans, Latinos and seniors who are more likely to be hit by bad credit.”

This is an issue of basic fairness, they write. “Americans should be able to compete for jobs on their merits, not on whether they have enough money to pay all their bills. Much of America—hard-working, bill-paying America—has damaged credit. It is wrong to shut them out of the job market.”

In its coverage of the op-ed piece, the Huffington Post cites a 2012 survey conducted by the Society for Human Resource Management that found 53 percent of employers said that they did not conduct background checks on any of their job candidates, though 87 percent said that they did check the credit history of potential employees in financial positions. Forty-five percent of respondents in the survey said that they conducted credit checks to prevent theft and embezzlement.

“No one should be denied the chance to compete for a job because of a credit report that bears no relationship to job performance and that can be riddled with inaccuracies,” the pols write. “Our Equal Employment for All Act would make sure all hardworking Americans have a real shot to get back into the workforce and back on their feet.”

It’s unclear how many more working Americans would actually benefit from a ban on employers’ ability to check the credit reports of prospective candidates, but what is certain is that this issue won’t be going away any time soon, just like a bad credit report.

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Doing Your Homework in the APAC Region

If there’s an underlying message in First Advantage’s latest study on background checks in the Asia Pacific region, it’s to tread carefully.

ThinkstockPhotos-122576156I received a copy of the firm’s 2014 Background Screening Trends Report for Asia Pacific the other day, analyzing 2 million of its background checks it conducted in the region. Among the findings: a 6.5 percent increase in candidates misrepresenting their curriculum vitae. Digging deeper into the data, Australia and New Zealand (27 percent) consistently recorded a higher discrepancy rate across Asia Pacific, followed by Singapore and Hong Kong (19 percent and 16 percent, respectively).

As has been the case in prior years, the discrepancy rate in China continued to be lowest among the lot, at around 9 percent in Q4.

So where are the discrepancies occurring?  In terms of employment discrepancies, 54 percent concerned employment history. The three most common education-related gaps in the region were graduation dates with a variance of more than six months (6 percent), graduation dates with a variance of less than six months (5 percent) and unconfirmed degree (3 percent).

The research also revealed that employers are beefing up their screening efforts and increasing their number of background checks, with 67 percent of all cases subjected to at least five checks in 2014, compared to 42 percent in 2013.

Mathew Glasner, South Asia managing director for First Advantage, found the lower discrepancies in the less mature and higher risk markets like Malaysia, China and the Philippines particularly interesting. “This is driven by fewer checks per screen than we typically find in the more mature markets,” he said. “In the Philippines, for example, our customers conducted, on average, only 3.5 checks per screen and uncovered only 12.8 percent discrepancies compared to Australia, where they conduct, on average, 5.2 checks per screen and uncover 26.94 percent discrepancies. This behavior is counterintuitive when you consider the risk associated with hiring into these emerging and higher risk markets.”

Among the other trends Glasner is spotting: increasing usage in the region of infinity screening—or the rechecking of existing employees’ backgrounds. “The ongoing screening of staff represents a real opportunity to mitigate fraud, financial crime and reputational risk,” he said.

It goes without saying, of course: These findings should bode well for First Advantage and other background checkers with operations in the region.

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More in the Coffer to Help Prisoners Find Jobs

It wasn’t that long ago (little more than a month) that I was blogging about an announcement by the U.S. Department of Labor that it was 126268666 -- prisoner workingcreating a $5 million funding opportunity to link inmates to jobs before they’re even released.

The idea there was to place American Job Centers inside local jails where soon-to-be-released prisoners would be able to access job-placement services and counseling to increase their chances of getting work without going through that uneasy “limbo” between living behind bars and earning a living.

Now, again from the DOL, comes significantly more, as this release announces: a whopping $27 million to fund its Training to Work-Adult Re-entry grant program to help, as its release says, “thousands of soon-to-be-released inmates become productive citizens.”

I wish I could tell you specifically how the two programs differ. Numerous calls and emails to the DOL went unanswered. But that doesn’t really matter. What does is the added help — significant help — ex-cons will be getting to rejoin the workforce and the world.

According to the announcement, the department expects to award about 20 grants with a maximum value of $1,360,000 each to provide training and employment services for men and women, ages 18 and older (including veterans), who participate in state or local work-release programs.

The approach is designed to link and coordinate education and training services for these people to get industry-recognized credentials. Those credentials will, in turn, help them find meaningful work (translated: not just assembly line and blue-collar) and give employers what they need to fill their gaps in growing sectors and industries.

Having personal experience with this — a relative who is now trying to re-enter society after paying his dues for some very bad life choices — I confess, what U.S. Secretary of Labor Thomas E. Perez has to say about this latest move resonates with me:

“A good job gives a person a sense of dignity and purpose. It enables [him or her] to find a decent place to live and enjoy a hot meal at home. Good jobs are a pathway to the middle class. Those who have paid their debt to society deserve the opportunity to find and hold useful employment. It puts money in their pocket, most of which is pumped back into the economy. In the best America, everyone shares our prosperity. That’s what these grants can make possible.”

Of course, all the money in the world can’t buy a guarantee that all hiring managers will leave all bias at the door when they enter the interview room. Or follow all the steps of the interview process laid out by the Equal Employment Opportunity Commission in its background-check guidelines, including when it’s appropriate to discuss an applicant’s past incarceration.

But it’s safe to say most employers would have to look favorably on an ex-prisoner’s initiative to get the education and credentialing he or she needs to succeed in that particular job in that particular organization in that particular industry.

If there are closed minds out there, this can only help to open them.

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SHRM Legal Conference Gets Under Way

You’ve probably heard of the best-selling book What To Expect When You’re Expecting. Well, what about what to expect when your employees are expecting? This was, in fact, the title of a session during the first day of SHRM’s 2015 Employment Law & Legislative Conference this Monday, where employment attorney Courtney Perez reminded a packed room that the Equal Employment Opportunity Commission has made targeting pregnancy discrimination one of its top enforcement priorities.

“This topic is personal for me,” said Perez, a working mom of two and the expectant mother of a third. As a senior associate at Dallas-based Carter Scholer Arnett Hamada & Mockler, she advises clients regularly on how to avoid discriminating against employees and ending up on the wrong end of a lawsuit.

Mothers make up a huge chunk of the workforce: 57 percent of women with children 1 years old or younger hold down jobs outside the home, according to the Bureau of Labor Statistics, while 62 percent of women who give birth are in the workforce at the time and 40 percent of U.S. households with children younger than 18 have mothers who are the sole or primary breadwinners, she said.

As the number of women in the workforce has grown, so too has the rate of pregnancy discrimination: The number of pregnancy discrimination charges filed with the EEOC went up by 35 percent between 1997 and 2008, said Perez. One of the biggest areas of contention revolves around the topic of light duty for pregnant workers: The Supreme Court is expected to announce its ruling soon in Young vs. UPS, in which delivery driver Peggy Young filed suit against the package delivery company after it required her to go on unpaid maternity leave instead of providing her with light duty during her pregnancy. UPS said Young didn’t qualify for a program in which temporarily disabled employees were given light duty until they could resume their regular jobs.

Should the Supreme Court rule in favor of Young, “it may expand the definition of the Pregnancy Discrimination Act,” the 1978 law passed by Congress in response to an earlier Supreme Court ruling that employers who discriminated against pregnant employees were not guilty of sex discrimination, said Perez.

Although pregnancy itself is not considered a disability under the law, the EEOC’s guidelines recommend that employers treat pregnant employees whose condition limits their job abilities the same as other temporarily disabled employees, said Perez.

She recommended a set of best practices for HR to follow, chiefly that HR ensure that a company’s policies and practices related to hiring, promotion and pay do not disadvantage pregnant employees or those who plan to take or have taken maternity leave. And beware the “mommy track,” she said, referring to the practice of steering pregnant employees into less-prestigious, lower-paying jobs.

“That’s the stuff of which discrimination lawsuits are made,” said Perez.

State governments aren’t waiting on the Supreme Court or Congress to give increased protections to pregnant workers, said Jonathan Segal, a partner at Duane Morris in Philadelphia. At least nine states have passed laws that go further than the federal PDA in requiring companies to accommodate pregnant employees, he said, part of a trend in which states are taking a more activist role in workplace matters.

“There may be gridlock at the federal level, but at the state level we’re seeing a lot of action,” said Segal during the session “All Politics is Local: State Law Trends.”

Thirteen states so far (and at least 90 municipalities) have passed so-called “ban the box” laws that prohibit employers from asking job candidates on their initial application whether they’ve ever been convicted of something. Four states have passed laws specifically protecting interns from discrimination and harassment. Twenty one states have passed laws banning discrimination on the basis of sexual orientation, and 19 of those states also have laws banning gender-identity discrimination.

“With the 2016 election, you can expect to see more ballot initiatives pertaining to paid sick leave, raising the minimum wage, gender identity — more Democratic voters tend to participate in presidential elections than mid-term ones, and these issues resonate with them,” said Segal.

Conservative state lawmakers have also been active: Twenty-two states have passed laws protecting the right of employees to store guns in their cars while they’re at work. A new law proposed in Pennsylvania would even allow employees to store guns on the outside of their vehicles, said Segal. Meanwhile, the number of “right to work” states is at an all-time high of 26, having recently been joined by Wisconsin and Michigan.

All of this poses a special burden for multi-state employers, said Segal, who must comply with a patchwork of regulations across the country.

In some cases, he said, the best approach is to keep it simple. With respect to ban-the-box, it might make sense to simply remove the question from all job application forms, rather than having differing forms for different jurisdictions.

“Does it really make sense to have multiple forms for different states?” asked Segal. “This is an area where we’re certainly going to see more states adopt this rule. It’s one thing that actually attracts support from both Republicans and Democrats.”

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2014’s Top 10 Posts

Here at The Leader Board, it was another interesting year covering the HR arena, with issues ranging from the controversy surrounding the HR certification, to lawsuits based on a worker’s commute, to HR leaders’ efforts to ensure their organizations’ compliance with the Affordable Care Act and various other legal requirements, just to name a few.

Below are links to the top 10 most-read posts of 2014, according to Google Analytics.

When viewed together, the posts create an accurate mosaic of the issues HR leaders are faced this year and are likely to continue dealing with into the new year.


  1. SHRM Rolls Out New Certification (May 13)
  2. HR Plaintiffs Build Their Case Against Lowe’s (Jan. 24)
  3. Google Tackles Incentives and Rewards (April 29)
  4. More Restrictions on Criminal-Background Checks (Feb. 10)
  5. Employers Missing ADA Coverage in FMLA Cases (June 30)
  6. Friedman Shakes It Up at SHRM (June 23)
  7. ‘The 27 Challenges Managers Face’ (July 28)
  8. Who’s Leading the Way? (Nov. 13)
  9. Woman Sues Ex-Employer Over Commute (July 2)
  10. Giving HR the Boot (April 9)
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Screening in a Peer-to-Peer World

Does background screening have a role to play in shaping the future of peer-to-peer marketplaces?  HireRight certainly thinks so.

At this week’s HR Tech, the Irvine, Calif., company announced a new practice that aims to address the needs of “sharing” businesses.

Lyft_Pink_MustacheIn recent years, peer-to-peer marketplaces have been gaining traction, with big bets being made on enterprises like Uber, Lyft and Airbnb. But in order for these organizations to thrive, HireRight CEO John Fennelly believes participants are going to want to know that those they’re entering into a business relationship with are trustworthy.

Through its technology platform, HireRight is looking to provide those individuals with some level of comfort.

In some cases, HireRight’s press release says, a marketplace might mandate screening to help ensure consumer safety and mitigate risk, such as for drivers belong to a ride-sharing service. In other cases, it might offer screening as an option so providers can differentiate themselves, such as for clerical or personal-assistant services.

In the world of background screening, Fennelly says, self-verification is pretty much nonexistent today. But if it begins to catch on in the peer-to-peer world, he says, the approach could eventually transition into more traditional workplace settings.

It should be interesting to see if this indeed turns out to be the case.

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Considering Criminal Convictions

mug shotDelving into job applicants’ criminal records during the hiring process can get dicey.

Many employers are legally permitted to pose questions concerning criminal history on job applications. But an increasing number of cities and states are moving to prohibit such queries, enacting “Ban the Box” laws that eliminate questions about criminal convictions and, theoretically, help level the playing field for job seekers with criminal backgrounds.

The EEOC has recommended that all organizations take similar steps, and has encouraged employers to avoid relying on bright-line background screens to weed out those with criminal infractions in their past.

A recent survey conducted by Cleveland-based EmployeeScreenIQ finds that, while many companies still seek information about criminal histories, they may be starting to put a bit less emphasis on what these inquiries uncover.

In its poll of nearly 600 HR professionals, EmployeeScreenIQ found a majority of respondents (66 percent) indicating they continue to ask candidates to self-disclose criminal convictions on job applications, while 78 percent said they ask them to do so at some point in the hiring process.

Just 8 percent, however, said they automatically disqualify an applicant who admits to having a criminal record before a background check. Less than half of the survey respondents (45 percent) said job candidates with criminal records are not hired due to their past imprudence less than 5 percent of the time.

What sort of indiscretions worry employers the most? When asked what type of convictions would disqualify a candidate from consideration for a job, survey respondents most commonly replied:

• Violent crimes (felony convictions) – 88 percent

• Crimes of theft and dishonesty (felony convictions) – 82 percent

• Drug offenses (felony convictions) – 68 percent

Misdemeanors matter as well, with 52 percent citing misdemeanor convictions for crimes involving theft or dishonesty as dealbreakers. Fifty-two percent said the same about misdemeanor convictions for violent crimes. In addition, 35 percent indicated misdemeanor drug offenses would take an applicant out of the running, and 13 percent said minor infractions and/or driving offenses would exclude a candidate. For that matter, 8 percent of respondents said charges that didn’t result in a conviction may eliminate a job applicant from contention.

(A full, complimentary survey report is available for download here)

Naturally, felonies “have always been of greater concern,” says Nick Fishman, co-founder of EmployeeScreenIQ, and the organization’s chief marketing officer and executive vice president.

“I do think [employers] are justified in their concern over felony offenses,” he says, “especially relating to violence and theft or dishonesty. These types of offenses really speak to a person’s character, and could foreshadow future problems.”

Misdemeanors can be “a bit trickier,” adds Fishman, noting that patterns of behavior should be the key indicator in weighing criminal convictions.

“Regardless of the criminal activity, employers need to look at things such as the type of crime, severity, age [at the time] of conviction, whether the person is a repeat offender and relevance to the job before making a hiring decision.”

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Another EEOC Setback in the Courts

I can’t help but think this latest slap on the wrist of the Equal Employment Opportunity Commission (as documented by HR Morning) will only embolden the agency.

121266265-soc media and hiringThat has been the sentiment after past EEOC court defeats, including this one I blogged about several months back.

In this latest case, a federal appeals court upheld the dismissal of a lawsuit filed by the EEOC against Kaplan Higher Education Corp., claiming the company improperly used credit histories to screen job applicants.

The agency claimed Kaplan discriminated against black candidates applying to senior-executive, accounting and other financially sensitive positions. The EEOC, meanwhile, hired a third party to prove the credit checks had a disparate impact on black applicants, but the court found the third party’s research process — which included examining driver’s licenses to determine race, a technique it calls “race rating” — was flawed and unreliable.

What’s more, the court found, the EEOC was making charges about a background-check technique it employs. And that’s not all the problems found by the court.

As quoted from the ruling, care of HR Morning:

In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses.

… We need not belabor the issue further. The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.”

This piece from Forbes offers additional details and perspective about the case.

From my limited perspective, I’m starting to see enough of these failed EEOC prosecutions to think the agency might have better luck returning to the old days of helping employers comply rather than looking for ways — even paying third parties to find ways — to nail them.

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EEOC Shares Tips on Background Checks

handcuffsSome would argue the EEOC’s guidance on the use of criminal background check information offers more confusion than clarification for employers.

Critics—including a group of nine state attorney generals that penned a letter detailing its grievances to the EEOC—contend the agency’s regulations unduly burden employers with costs, could actually create more opportunities for discrimination, and may circumvent many state laws with respect to background checks for employment purposes.

The EEOC has made efforts to address such concerns. In September 2013, for example, the agency responded to the aforementioned letter, explaining its recommendation that employers use a two-step process for job applicants—including individualized assessment as the second step—rather than relying on bright-line screens alone.

Earlier this week, the EEOC—along with the U.S. Federal Trade Commission—made another attempt at shedding light on the subject, offering tips to employers and job seekers alike, in the form of two technical assistance documents.

The organizations issued the documents—one for employers, one for job applicants and employees—in an effort to “explain how the agencies’ respective laws apply to background checks performed for employment purposes,” according to an EEOC statement.

For example, the EEOC advises employers to “be prepared to make exceptions for problems revealed during a background check that revealed a disability. … If you are inclined not to hire a person because of a problem caused by a disability, you should allow the person to demonstrate his or her ability to do the job—despite the negative background information—unless doing so would cause significant financial or operational disability.”

The document also reminds organizations of their responsibilities before taking an adverse employment action, such as supplying an applicant or employee a notice that includes a copy of the consumer report the company used in reaching its decision, and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.”

The publication geared toward employers does contain some “helpful reminders for employers who pursue background checks on applicants or employees,” says Rachel Reingold Mandel, a shareholder in the Boston office of labor and employment law firm Ogletree, Deakins, Nash, Smoak & Stewart.

The information presented in the document is especially useful in light of FCRA requirements “[losing] the spotlight recently,” says Mandel, “as the EEOC and state law anti-discrimination focus has gained traction.

“This publication helpfully reminds employers that it is important to both use background checks in ways that do not discriminate based on protected characteristics—race, color, sex and national origin, for example—and to follow [FCRA’s] technical requirements.”

Organizations and HR leaders “have worked to balance their obligations under the federal Fair Credit Reporting Act against their obligations under applicable anti-discrimination laws, including those enforced by the EEOC,” she says.

“This publication provides a helpful guide to the steps employers should follow to comply with both the FCRA and federal anti-discrimination laws,” continues Mandel, adding that employers would be wise to “keep in mind separate state-specific laws, including those that prohibit asking any criminal background questions on employment applications.”

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Employers’ ‘Scariest Issues’ in 2014

I don’t know how frightened you are by all these. I do know you’re aware of each and every one of them. But I thought I’d share them anyway.

465250769 -- frightenedWhat intrigued me about this free downloadable list of the 11 (not 10, mind you) Scariest Issues Employers Face in 2014 from XpertHR is how cleanly they’re all packaged. And the list itself seems pretty accurate as well: medical (and, yes, recreational) marijuana in the workplace, same-sex marriage, technology in the workplace, healthcare reform, immigration and Form I-9 compliance, misclassification of independent contractors, minimum wage and overtime violations, curtailing background checks, emerging protected classes and curbing workplace discrimination, employee leaves and reasonable accommodations, and expansion of “protected concerted activity.”

Whoever put this together knows a little something about HR leaders’ sleepless nights, I’m thinking.

I also like the way each topic is broken down into two parts: “The Issue” and “What an Employer Should Do.” Hey, those are certainly two of the most important points we need to cover in our features and news analyses here at HRE.

The same-sex-marriage section was especially helpful, laying out specifically how United States v. Windsor (in which the U.S. Supreme Court declared Section 3 of the Defense of Marriage Act unconstitutional) impacts employers:

Following this landmark decision, both the Internal Revenue Service and Department of Labor adopted a state of celebration rule, meaning that a valid same-sex marriage from another state must be recognized for federal tax purposes in all states. Thus, even if an employee resides in a state that does not recognize same-sex marriage, that employer must comply with IRS regulations regarding the tax treatment of employee benefits. The DOL has pronounced that in the wake of Windsor, same-sex spouses are now eligible for the same benefits and protections as opposite-sex spouses under employer health plans, retirement plans and other benefits covered under the Employee Retirement Income Security Act. Same-sex spouses are also entitled to leave under the Family and Medical Leave Act if living in a state recognizing same-sex marriages.”

Kind of wraps it up nicely. The advice to employers is what you’d expect, and what we’ve written about, but it’s still nice to see it packaged concisely as well:

Accordingly, employers should review their employee handbooks, policies and procedures — particularly pertaining to discrimination, benefits and leaves — and make any necessary revisions regarding the treatment of same-sex spouses. Further, employers should know what types of same-sex relationship their states recognize, the tax benefits provided to an employee’s same-sex spouse or partner, and whether the state follows or departs from federal law under Windsor.”

Also helpful, and in one place, is a chart listing where every state stands on legalized marijuana, same-sex-marriage recognition, minimum wage (with each state’s wage listed) and adoption of Ban-the-Box (criminal background) legislation.

Again, you may not learn anything startlingly new, but armed with brief rundowns and good advice on each of these “scary issues” might help alleviate some trepidation.

I know I plan to hang onto it for some handy frames of reference.



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