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November 2010 Vol. 10, No. 11
1. Ohio Governor Prohibits Offshoring
Ohio Governor Ted Strickland has issued an executive order that prohibits the expenditure of public funds for services provided offshore and beyond the boundaries of the United States and its territories - a practice known as Offshore Outsourcing or "Offshoring" - a move that is a reaction to public outcry after a El Salvadoran call center was used for Ohio's appliance rebate program, according to a report on Cleveland.com.
A press release on the Office of the Governor website at Governor.Ohio.gov reveals that the state's Department of Development awarded a $357,300 contract to a Texas-based service provider in March 2010 to assist with the agency's implementation of the $11 million federal stimulus-funded appliance rebate program which rewarded consumers with federal stimulus dollars when they bought energy-efficient appliances.
Despite state procurement requirements designed to restrict service providers from using public funds for offshore labor - in particular, an Ohio Department of Administrative Services (DAS) directive that requires agencies to ask potential vendors to list all locations where the services will be performed - the contract was awarded to a company that practiced "offshoring" and used offshore labor.
The company in Texas never told state officials in Ohio it would use a foreign call center, and the state did not require the information with bids. State officials learned about the call center from an Ohio resident who asked a call center employee where the operation was located, according to the press release.
"Ohio's policy has been - and must continue to be - that public funds should not be spent on services provided offshore," Strickland states in the Executive Order. "Throughout my Administration, procurement procedures have been in place that restrict the purchase of offshore services."
In June 2008, Strickland signed an executive order (E.O. 2008-12S) that implemented Think Ohio First practices promoting economic development by maximizing the use of Ohio businesses when agencies conduct purchases.
Banning the practice of offshoring where public funds are concerned - like the governor of Ohio issuing an executive order prohibiting use of public funds for outsourcing - may seem like a no brainer to many, but according to a blog on The Economic Populist the use of taxpayer dollars to offshore outsource jobs happens every day, from food stamp and unemployment support to large software design projects.
The Economic Populist blog also notes that as a result of the State awarding a stimulus contract to support the appliance rebate program to a contractor that practiced offshoring, workers in El Salvador were able to come into contact with the personal and sensitive financial data - also known as Personally Identifiable Information (PII) - of people from Ohio.
The controversial practice of "offshoring" has come to the attention of other states as well. As reported earlier on the ESR News Blog, California Governor Arnold Schwarzenegger recently signed into law California Senate Bill 909 (SB 909), which appears to be the first law in the nation that addresses the issue of personal information being sent offshore outside the United States or its territories.
SB 909 amends the California Investigative Consumer Reporting Agencies Act (ICRA) that regulates background checks in California and requires that a consumer must be notified as part of a disclosure before the background check of the web address where a consumer "may find information about the investigative reporting agency's privacy practices, including whether the consumer's personal information will be sent outside the United States or its territories."
While SB 909 does not prohibit offshoring when it comes to background checks, the law will require a disclosure in the privacy statement of the background check firm's website, as well as a link to that privacy statement.
Employment Screening Resources (ESR) does not offshore information contained in background check reports and is a member of Concerned CRAs, a group of Consumer Reporting Agencies (CRAs) that oppose the practice of offshoring information of U.S. citizens outside the country.
2. SHRM Defends Use of Credit Reports
According to a news story on the Society for Human Resource Management (SHRM) website - "SHRM: Credit Checks Are Legitimate Screening Tool" - a representative for SHRM told the U.S. Equal Employment Opportunity Commission (EEOC) during a public hearing on October 20, 2010 that the federal government should not eliminate an employer's use of credit histories to help make decisions about job candidates.
The representative, in prepared comments, said that "SHRM believes there is a compelling public interest in enabling our nation's employers - whether that employer is in the government or the private sector - to assess the skills, abilities, and work habits of potential hires." In addition, the representative said credit history is one of many factors - including education, experience and certifications - that employers use "to narrow that applicant pool to those who are most qualified."
The SHRM representative pointed out Human Resources (HR) typically conducts a background check on the job finalist or group of finalists before making a job offer, and that background check might include checking personal references, criminal history, and credit history depending on the employer and the position to be filled.
Citing the Fair Credit Reporting Act (FCRA) of 1970 and the Civil Rights Act of 1964, the representative said SHRM believes "employees already have significant federal protection for the misuse of background checks."
Recent SHRM Research Department data on the use of employer background screening practices was also referenced at the meeting. Among the findings:
The EEOC heard public comment from SHRM and others to determine the extent of the practice of using credit checks during the background screening of job candidates, the effectiveness of its intended purpose, and its potential impact on different populations.
More information about the EEOC public meeting can be found at: http://www.eeoc.gov/eeoc/meetings/10-20-10/index.cfm.
3. Contract Workers and Background Checks
A story from Greenwood County, South Carolina shows why background checks should be run on all workers with access to schools, including contractors and sub-contractors, and not just full time employees.
According to a report on the News Channel 7 website at WSPA.com, a contract worker at a Greenwood County, S.C. school was arrested for disorderly conduct when he allegedly yelled and cursed at police after students complained about his behavior. According to a police report, students at the school claimed the accused man made sexual gestures and asked the children to give him a hug.
The 22-year-old man - a subcontractor working at the school - was charged with public disorderly conduct for allegedly cursing at deputies and school officials while they kicked him off campus.
In their report, News Channel 7 learned that, according to a South Carolina Law Enforcement Division (SLED) background check, the man had been accused with sexual misconduct with a child under the age of 16 and sexual misconduct with a child under the age of 11. Although not convicted on those charges, the man had been convicted of aggravated assault.
To ensure a safe workplace (which can include schools), employers following best practices guidelines should run background checks on all employees - from full-time to part-time and from contractors to sub-contractors.
Contact ESR for more information on extending your backgroud checking to include contractors and vendors. You can call us toll-free at 888-999-4474 or email jcallahan@esrcheck.com
ESR Articles (click for more info)
The FCRA in 4 Easy Steps
Find out how to be in compliance with the FCRA
Criminal Records and Employment Applications
What questions should employers be asking?
10 Safe Hiring Tools
These tools don’t cost anything and promote a safe and profitable workplace
Negligent Hiring
What occurs when Due Diligence is not performed
Please feel free to contact Jared Callahan at ESR at 415-898-0044 or jcallahan@esrcheck.com if you have any questions or comments about the matters in this newsletter. Please note that ESR's statements about any legal matters are not given or intended as legal advice.
Employment Screening Resources (ESR)
www.ESRcheck.com
7110 Redwood Blvd., Suite C
Novato, CA 94945
415-898-0044
