State Screening Laws
The Strange Saga of AB 655 and Critical New Rules Affecting Safe Hiring in California
Note: Employers hiring in California must be in compliance with a large number of special 'only in California' provisions. Failure to be in compliance with California laws can potentially expose employers to liability. ESR is pleased to have played a part in changing California law in 2002. Some of the most critical differences are in the forms and procedures used in the process, and the handling of criminal records. Employers hiring in California must have specific provisions in their screening forms. Forms that are used in the other 49 states are useless in California. Employers also need to file a certification with a background screening firm that contain unique California language. In addition, California has some of the most restrictive and technical rules in the US when it comes to locating and utilizing criminal records. In fact, failure to utilize criminal records correctly can be a misdemeanor offense. The article below by ESR underscores some of the concerns. If an employer, human resources or security professional or labor attorney has any question about forms or procedures being used, ESR can perform a compliance check-up. Additional information, including ESR's 50 state legal compliance information, is available for ESR clients. In addition, ESR can supply clients with Special Reports containing a detailed analysis of the Fair Credit Reporting Act (FCRA), including the legal requirements for Authorization/Disclosure forms and client certification forms, that are compliant for all 50 states.
According to BRB Publications Inc.:
"CA Governor Davis recently signed into law two bills, AB 1068 and AB 2868. These bills substantially amend the ill-conceived AB 655 regarding pre-employment screening and employee investigation in CA. ... Much of the credit for simplifying the law goes to Employment Screening Resources (ESR) president Les Rosen. Mr. Rosen testified before the state legislature on why California employers needed the law to change and he worked with the author of the bills in Sacramento to draft the clean-up language. Below is a summary of the major points covered by these new laws. "
By Les Rosen, Employment Screening Resources (ESR)
Taken from article prepared for the October 2002 edition of the Northern California Human Resources Association (NCHRA) Bulletin. Reprinted in HR.com.
The need for Human Resources professionals in California to keep a close eye on Sacramento was never demonstrated as clearly than by the strange saga of AB 655. That was a well-intended identity theft bill that went into effect this year largely unnoticed, and wreaked havoc on California employers because of unintended consequences. Among other things, the law impacted reference checking and in-house investigations and required employers to provide all background reports to applicants.
The good news is that the 'clean-up' bills passed this year show how HR professionals can effectively work with legislators to make positive changes. Thanks to the efforts of Assemblyman Ronald Wright and his staff (who authored AB 655), two clean-up bills, AB 1068 and AB 2868 were passed unanimously by the California legislature and were signed by the Governor on September 28, 2002. Because the bills contained urgency clauses, they would go into effect immediately.
AB 655 was part of an effort to protect against identity theft. The bill amended the California Investigative Consumer Reporting Act (Civil Code Section 1786 et seq.), the law that governs pre-employment background screening in California. The legislature expressed concern that identity theft had become the fastest growing white-collar crime in America, and that providing pre-employment background reports to applicants would help people to protect themselves sooner.
Another factor behind AB 655 was the concern of privacy advocates that employers could conduct their own in-house background investigations, without any regulation by the federal Fair Credit Reporting Act (FCRA) or state law. Before AB 655, an employer had no obligation to inform an applicant that the employer found a criminal record when not using a background screening service. This loophole has lead to documented cases of people being blacklisted because of incorrect records. AB 655 closed that loophole by requiring employers who do in-house investigations to provide certain notices to applicants.
However, the plain language of AB 655 appeared to place an onerous burden on employers. Employers were placed under the obligation to provide to all applicants any information obtained about them as part of the hiring process, including past employment verifications and references. The law went beyond just providing criminal convictions or matters of public record. According to Civil Code 1786.53, all information had to be provided at either the first meeting or interview between the employer and applicant or within seven days, whichever was sooner.
This new burden created a nearly impossible task. The physical process of hiring, especially for larger organizations with hiring managers and multiple locations, made it nearly impossible to comply. In addition, it added a new barrier to the already difficult task of obtaining employment references. It also made it more difficult for employers to conduct internal investigations of employees suspected of misconduct or wrongdoing.
The law contained other requirements as well. Any employer who obtained a background report had to provide a copy of the report to the applicant. Some law firms took the position that this task had to be performed by the employer, and could not be outsourced to a screening firm. AB 655 imposed additional requirements on disclosure forms to applicants, required employers to certify to background firms that they would comply with California law, and mandated a cover sheet on background reports. AB 655 also contained substantial damages that could be awarded to a consumer against an employer or background firm that failed to comply with the new rules.
After Assemblyman Wright and his staff were made aware of the unintended consequences of AB 655, they immediately took up the difficult task of gathering opinions from various parties, and crafting new legislation that addressed various concerns. They received input from employers, labor lawyers, HR and security professionals, staffing firms, background experts and other groups that were affected. Assemblyman Wright and his staff then successfully shepherded the ???clean-up????? through the legislature.
California???s Human Resources Associations also played a key role in the effort. The author of this article, with the support and assistance of the NCHRA Legislative Action Committee (LAC), was very involved in working directly with Assemblyman Wright???s office, and assisted in drafting some of the language in the new bills, as well as testifying before the state legislature on behalf of the NCHRA as to why California employers needed these amendments. There was also significant efforts by representatives of PIHRA.
Some of the more important changes in the clean-up legislation for employers and HR professionals are:
1. References: The new law clarifies that under Civil Code section 1786.53, in-house references obtained by an employer DO NOT have to be turned over to applicants. Under AB 1068, an employer would have to turn over any public records, such as criminal convictions that it found on its own, but not reference checks.
2. Providing Reports to Applicants: Based in part upon a proposal from the author of the article, the law no longer requires employers to provide every background report to each applicant. Instead, each applicant will have the ability to check off a box on a disclosure sheet and have a background-screening firm send the report directly to the applicant. A similar rule already exists in California for credit reports.
3. Special Cover Sheet: The law revises the rules about a special cover sheet. A screening firm is allowed to post the required notice on the first page of the report instead.
4. Employee Investigations: There is also language in new section 1786.55 that clarifies that the new law is not intended to modify existing law concerning internal investigations of current employees suspected of misconduct or wrongdoing (except for obtaining public records), or employer reference checking. However, the federal FCRA still applies to investigations by third parties.
5. Limitations on ???
6. Limitation on Criminal Record Searches: The new law retains the seven (7) year limitation on a background-screening firm obtaining criminal records. However, the new law clarifies that there is an exception for employers that are required by a governmental agency to go back further when checking qualifications. This addresses a conflict between California law and situations where certain employers are required to go back further in some cases.
7. Employer forms used for background screening: Employers that utilize the services of a background screening firm should have received, shortly after AB 655 was effective, a revised certification form required of all California employers as well as a revised Disclosure from that applicants must receive. Because of the changes in the law, employers should receive a new set of forms reflecting the new requirements
As employers and HR professionals begin to deal with the new laws, there will undoubtedly be issues raised. However, this article is intended as a general introduction and not legal advice. For more information, contact Employment Screening Resources at 888-999-4474 or visit our web site at www.ESRcheck.com or e-mail us at firstname.lastname@example.org
Lester S. Rosen is an attorney at law and President of Employment Screening Resources (ESR), a national background screening company located in California. He is a consultant, writer and frequent presenter on pre-employment screening and safe hiring issues. He is a certified specialist in criminal law in California, a former deputy District Attorney and defense attorney, and has taught criminal law and procedure at the University of California Hastings College of the Law. His jury trials have included murder, death penalty and federal cases. He graduated UCLA with Phi Beta Kappa honors, and received a J.D. degree from the University of California at Davis , serving on the Law Review. He has qualified and testified in court as an expert in the area of safe hiring and pre-employment background screening. Email: lsr@ESRcheck.com