ESR Newsletter and Legal Update

This newsletter is sent to clients of Employment Screening Resources (ESR), as well as employers, Human Resources and Security professionals, and law firms who require information on pre-employment screening, safe hiring, the FCRA and legal compliance. If this was sent in error, you can be removed from this mailing by using the “remove” feature at the end of the newsletter.

ESR will be closed December 24 and December 31 in observation of the holidays. ESR wishes everyone a joyous and peaceful holiday season.

(Reading time: Less than 5 minutes)

December 2004 Vol. 4, No. 12

Employment Screening Resources (ESR) Newsletter and Legal Update

1. Revised FCRA Notice to Take Effect January 31, 2005

2. New Free Credit Report Rules Goes Into Effect

3. Even Major League Baseball Teams Need to Screen Employees

4. ESR Seminars

1. Revised FCRA Notice to Take Effect January 31, 2005

On November 30, 2004, the Federal Trade Commission (FTC), the agency charged with enforcing the Fair Credit Reporting Act (FCRA), released a new version of certain notices that must be provided to consumers and employers.

The FCRA is the federal law that regulates pre-employment screening. Under the FCRA, a background-screening firm must provide certain notices to employers and a summary of rights for use by consumers. Congress amended the FCRA with the passing of the FACT Act in 2003, which required changes in these notices.

The new notices are effective January 31, 2005. The notice primarily affects issues such as identity theft and credit. However, as of January 31, 2005, screening firms need to begin utilizing the revised summaries.

For a copy of the revised summaries, see the ESR section on the FCRA at

The FTC publication containing the new rules can be found at:

For any questions about the new summaries, contact Jared Callahan at 415-898-0044 or

2. New Free Credit Report Rules Goes Into Effect

Effective December 1, 2004, a new rule went into effect concerning credit reports. The 2003 amendment to the FCRA also requires each of the nationwide consumer reporting companies to provide a consumer with a free copy of their credit report, at the consumer’s request, once every 12 months.

According to the Federal Trade Commission’s website, the free reports will be phased in during a nine-month period, rolling from the West Coast to the East beginning December 1, 2004. Beginning September 1, 2005, free reports will be accessible to all Americans, regardless of where they live.

Consumers in the Western states — Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming — can order their free reports beginning December 1, 2004.

The new rules are in addition to current rules that already mandate a free report, such as an employment screening report, where an employer intends to take adverse action based upon a screening report.

To see a full discussion of the new free credit reports, go to:

The new rule does not affect screening agencies such as ESR, since ESR only provides a one-time report for employment purposes only, and does not maintain permanent files on consumers.

Although a credit report is a tool that employers can utilize, ESR urges that their use be approached with caution. Employers should have a policy and procedures in place to ensure that credit reports are only used when there is a clear reason that information from a credit report would be a valid and non-discriminatory predictor of job performance. In addition, employers should only rely upon information that is relevant, recent and accurate. For a special report on the uses and limitations of credit reports, see an ESR special report:  â€œCredit Reports and Job Hunting”

3. Even Major League Baseball Teams Need to Screen Employees

Article quoting ESR by Paul Herrera of the Riverside Press-Enterprise and re-printed in the Oakland Tribune — Nov. 2004

For as little as $100 for a background check, the Arizona Diamondbacks could have avoided embarrassment after it hired as manager a man who had a pair of arrests and a bankruptcy in his past.

Four days after announcing they’d hired Wally Backman as their new manager, the baseball team withdrew its offer and named someone else. In between the two events, The New York Times uncovered the arrests and bankruptcy, revelations the team said were not previously disclosed.

Although Backman never signed a contract, the team could have prevented an avalanche of bad press for as little as $100, the cost of a background check, industry experts said.

According to the Society of Human Resource Management, more than 80 percent of large companies check for criminal backgrounds and verify resume information of job candidates. Some companies, particularly when hiring someone with financial responsibilities, follow up with credit checks.

“By the time a new employee takes their lunch break on the first day at work, a company has paid that person more than the cost of the background check,” said Les Rosen, president of Novato-based Employment Screening Services and author of “The Safe Hiring Manual — The Complete Guide to Keeping Criminals, Terrorists and Imposters out of the Workplace.”

Inaccurate or false statements on a resume are among the most common reasons people are fired or screened from a job, said Rosen, who last year founded the National Association of Professional Background Screeners.

“… Companies can’t immediately reject candidates based on a criminal record,” Rosen said. Federal law requires employers to further examine the record and base their decision on the specific merits of the charges and how they could pertain to the job for which they applied.

4. ESR Seminars

ESR is pleased to announce the publication of the first definitive book on pre-employment screening and safe hiring. The book, The Safe Hiring Manual-the Complete Guide to Keeping Criminals, Terrorists and Imposters Out of Your Workplace, is by ESR President Lester S. Rosen. The 512 pages cover only pre-employment background checks and safe hiring. It is available from, Borders, Barnes and Noble and numerous other bookstores.

ESR will be participating in the following seminars across the United States.

April 25, 2005–Little Rock, AR “Background Screening and Higher Education: Special Issues involving Background Screening and Due Diligence in the Educational Environment.” Annual Conference for the Southwest Region for the College and University Professional Association for Human Resources (CUPA-HR). CUPA HR

April 21 and 22, 2005–Dallas, TX “Criminals, Imposters and Recruiting – The Role of Pre-employment Screening in the Hiring Process.” SRHM 36th Annual Employment Management Association Conference and Exposition (EMA website).

March 3, 2005–Aptos, CA “Are You Ready to Hire?” Things are starting to look up, so come in for a tune-up. This half-day seminar will cover everything you need to know in order to hire successfully! Speakers: Janett Spirer, Humanex, Inc. and Les Rosen, Employment Screening Resources (ESR). Sponsored by the Santa Cruz EAC-Aptos Seascape Golf Club event room.

February 23, 2005–San Francisco, CA “Keeping Imposters and Criminals Out of the Workplace–An Introduction to Safe Hiring and Pre-employment Screening in California.” (A three hour workshop for HR professionals and employers sponsored by the NCHRA–

February 9, 2005–San Jose, CA “Keeping Imposters and Criminals Out of the Workplace–An Introduction to Safe Hiring and Pre-employment Screening in California.” (A three hour workshop sponsored by the

Contact ESR for further details.

Employment Screening Resources (ESR)

1620 Grant Avenue, Suite 7 

Novato, CA 94945


3Back to Newsletters