Yearly Archives: 2009

Unjustified fears about Credit Scores and employment

A news release on the web today from a firm that apparently engages in credit repair uses the myth that credit scores are used for employment as an apparent marketing tactic. 

The press article indicates that a national recognized credit score except say, “…millions of Americans are in for a shock when it comes to applying for a high paying job, because many employers seeking to fill these positions will pull credit scores.”  See:   http://www.webwire.com/ViewPressRel.asp?aId=108684 

The problem of course is that it is simply not the case that employers use credit scores.  As pointed out in the ESR Blog on a number of occasions, it is an urban myth that credit scores are part of an employment credit report.  It is true that employers may view  a credit history, but the idea that credit scores are used is just factually wrong.  See the ESR blog at:  http://www.esrcheck.com/wordpress/815/basics-of-credit-reports-and-background-checks 

The bottom line is that consumers have enough to worry about in a recession, without the added and entirely unjustified fear that a credit score will hurt their chances for a job.  There may be a number of good reasons that consumers would want to improve their credit score, but fear of employers seeing the credit score is just not one of them.

Safe Hiring Audit and Due Diligence for Employers

Employment Screening Resources (ESR), a leading pre-employment background firm, and Facts on Demand Press have published “ The Safe Hiring Audit.” This book empowers human resources and security professionals, business owners and hiring managers with the resources needed to perform an effective audit of their employment procedures.

The 25-point action plan evaluates current hiring practices, identifies necessary changes, and shows how to implement these changes. Using the Audit’s action plan assists a company’s compliance with workplace laws, thus helping keep the company out of court.

The book was authored by ESR President Lester S. Rosen, with Michael Sankey, President of BRB Publications.

According to Rosen, “Companies of all sizes must periodically audit their employment practices to insure due diligence and compliance with discrimination and privacy laws, and determine whether an organization is using the current best policies, practices and procedures.” Rosen added that an effective audit can help avoid the high financial costs, legal complications, and managerial headaches of hiring unqualified and even dangerous employees.

Author Lester S. Rosen is an attorney-at-law and founder of Employment Screening Resources (www.ESRcheck.com), a national pre-employment background screening firm. He also is the author of, “The Safe Hiring Manual,” the first definitive book on background checks and safe hiring, and The Safe Hiring Course, the only online educational course available in the U.S. specifically for the background screening industry. 

Michael Sankey is the founder and CEO of BRB Publications, Inc. (www.brbpub.com), the nation’s leading publisher of books and web-based content dealing with access to public records and government information.

Why Background Firms should not contact an applicant directly

Some employers or recruiters want background firms to contact an applicant directly if there is a need to obtain additional information or to clarify information from an applicant.  If this has ever crossed your mind as an employer or recruiter, you might want to reconsider. 

Employment Screening Resources (ESR) generally recommends against having background firms getting in the middle of that special relationship between the Recruiter and the Applicant.  It creates confusion, causes delays, and brings a background screening firm into discussions with the applicant  who may not even realize that a third party is involved.

From many years of experience, ESR knows that background checks actually go much faster where the recruiter exclusively manages the direct applicant relationship and obtains additional information when needed. 

This issue of applicant contact can come up in a number of ways.

First, if a recruiter is submitting faxed orders instead of using the ESR online solutions, recruiters must understand the process can be delayed if orders are sent that are illegible or incomplete. For example, screening firms often face difficulty in deciphering an applicants handwriting as to past employers or a Social Security Number. An eight and a three can easily look alike.  Since a screening firm is not expected to read hieroglyphics or be a mind reader, the screening firm has to contact the recruiter to clarify the information. Some screening firms will make their best guess and if they are wrong, the report is delayed even further, proving the old adage that no good deed goes unpunished.  Recruiters who review all applications for completeness, legibility and accuracy with the candidates before sending the applications to a screening firm will find their report is completed much faster.

Another example is an incomplete employment verification because the past employer has moved, merged, or gone out of business.  If the recruiter still needs that to be verified, then someone needs to contact the applicant and ask for things such as W-2’s, or names of past supervisors.  There are some recruiters who ask their background firm to do this, even though it is the recruiter that has most knowledge about the applicant and has direct contact.

There are a number of complications that arise if the screening firm attempts to contact the applicant. 

1.  The applicant does not know the background firm, and is naturally reluctant to supply a Social Security Number or date of birth to a stranger over the phone, or send pay stubs to someone they do not know.  That typically means the applicant will normally call the recruiter first anyway to find out what the situation is all about, which, of course, delays the screening process further.

2. The background firm often has to engage in phone tag, requiring back and forth before the screening firm can connect with the applicant.  Since the applicant has no relationship with the screening firm, an applicant does not always realize it is important to call back, especially if the applicant is looking at several different job offers.  On the other hand, if a recruiter is in hot pursuit of an applicant, or the applicant is focused on getting the job, it is likely that the recruiter will have a great deal less difficulty getting in touch with him/her to obtain the additional information or clarification. 

3.  The third issue is tracking.  The screening firm needs to track the status of the additional calls to the applicants and to deal with multiple applicants instead of a single point of contact.  Recruiters presumably already have an ATS or some other system to keep tabs on the progress of each job and each finalist (since typically only a finalist is getting screened). 

4.  The last and most important issue is when a screening firm calls the applicant, an applicant may now believe that the background firm is somehow involved in the hiring decision.  There have been applicants who have wanted to continue selling themselves to a background firm’s clerical employee, whose only mission was to obtain some missing information and who knows nothing about the job.  Or, if the applicant somehow feels that background employee did not give them the attention he or she deserved, the applicant may be left with a negative impression of the potential employer or complain about the contact.

For these reasons, many background firms typically prefer not to get themselves in the middle of the relationship between the recruiter and the applicant.

New EEOC lawsuit for discrimination based on credit report and criminal records

The Equal Employment Opportunity Commission (EEOC) announced  on October 1, 2009 that they have filed a lawsuit against Freeman, a firm that offers nationwide convention services, on the basis that it used credit reports and criminal records to unfairly discriminate against black, Hispanic and male  job applicants.    This case has the potential to have a profound impact on the way employers hire in the U.S.

According to the EEOC press release the lawsuit charged that, “This practice has an unlawful discriminatory impact because of race, national origin and sex, and is neither job-related nor justified by business necessity.”

Even though the use of criminal records and credit history does not directly target people   protected by civil rights laws, the argument is that when those criteria were applied to Freeman applicants, the end result was that greater numbers of blacks, Hispanics and males were affected.  This is referred to as a “disparate impact.”  In other words, by using this information to make hiring decisions, the practical impact was that members of protected groups were unfairly treated and rejected in higher numbers.   

The EEOC has been active in identifying barriers that contribute to discrimination     In 2007, the EEOC launched the “E-RACE” (Eradicating Racism and Colorism from Employment) Initiative. The purpose was to “improve EEOC’s efforts to ensure workplaces are free of race and color discrimination.” http://www.eeoc.gov/eeoc/initiatives/e-race/index.cfm

The use of credit reports and criminal records being used to deny employment has been hot-button issues for the EEOC.  The last significant case was El. v. Septa, 479 F.3D 232 (3d. Cir. 2007), where a 40 year-old second degree murder conviction was allowed to be used to deny employment.  However, part of the decision was based upon the fact that the applicant that was suing for discrimination did not present any statistical evidence to rebut expert testimony by the employer that even a 40 year old crime can be relevant.  The company had a “bright-line” policy of rejecting applicants with convictions for violence. 

Since then, a study was conducted by Professor Alfred Blumstein at Carnegie Mellon University that suggested that after a period of as little as five years for some crimes, a person with a criminal record was no more likely to re-offend then a person with no criminal record.   Ironically, the same professor was the expert in the El v. Septa  matter where a 40 year old murder was sufficient to deny employment .

ESR has written an in-depth analysis of the Blumstein study at:   http://www.esrcheck.com/Blumstein-and-Nakamura-study-on-redemption-in-Criminology.php”>http://www.esrcheck.com/Blumstein-and-Nakamura-study-on-redemption-in-Criminology.php

This case will not likely be finalized anytime soon and could well need to go to higher courts for a final resolution.  However, the case is a stark reminder that employers need to review their hiring practices, to ensure that any pre-employment assessment tool is both a valid predictor and job performance and not discriminatory. 

In the case of criminal records, Employment Screening Resources (ESR) has long advised employers that they should NOT automatically reject an applicant with a criminal record, but should instead determine if there is a business necessity that precludes hiring.  The EEOC has suggested that employers take into account the nature and gravity of the crime, the nature of the job, and the age of the offense.  Similarly, ESR has also long advised employers that credit reports should be approached with caution, and only used where relevant to the job, such as positions involving access to cash, assets or fiduciary duties.

International background checks and data and privacy protection

An important consideration when U.S. screening firms do international background checks are the application of foreign privacy laws regarding the manner in which information is obtained, transmitted, and utilized. The central issues are data privacy and protection. The European Union (EU) has extensive privacy laws that affect U.S. employers and screening firms.  These rules went into effect in 1998. The European privacy rules impact the transmissions of “personally identifiable data” from offices in EU countries to businesses in the U.S.

Firms that acquire data on individuals from EU member countries without compliance with the EU rules can be in violation of EU law. This can have a serious impact on international firms or firms that do business in an EU country.

 However, American firms that develop a privacy policy may enter what is called a “Safe Harbor” by certifying a privacy policy that includes adequate mechanisms to protect confidential personal data. The program is administered by the U.S. Department of Commerce. 

A firm can become Safe Harbor certified by following the guidelines listed at the Department of Commerce.  Information can be obtained at http://www.export.gov/safeharbor/ 

Employment Screening Resources was just the third background screening firm in the U.S. to receive Safe Harbor Certification from the Department of Commerce.  

ESR provides international background checks all over the world, including criminal records, and employment and education verifications.  ESR’s president Lester Rosen was the keynote speaker at the first international background screening conference held in India in 2007, and has traveled to a number of countries to investigate background screening. ESR also published the first comprehensive white paper on international background checks as part of the book, “The Safe Hiring Manual.”   

For more information on international employee screening services, see, see: http://www.esrcheck.com/international.php

fake references and employment screening background checks

From the mailbox:  What are the risks for an applicant in providing a fake reference.  I even hear there are web sites that will give you a fake reference that look real and they even create a web site for the fake company.  In a tough job market, why not? 

Response from  ESR:  The old saying that honesty is the best policy is more then just good advice for a job seeker, it can mean the difference between getting a great job or having your career  get permanently smirched. 

First, the chance of even pulling of a fake reference is getting much more difficult.  Statistics show that most employers routinely contact past employers either themselves or through a background firm.  A good background firm will typically independently establish if the past employer even existed, and locate a phone number independently of whatever number an applicant puts on their resume.  A screening firm may not simply call the name and number provided by the applicant. Employment Screening Resources, for example, goes through an extensive procedure to verify that each past employer is legitimate and does not accept the applicant provided phone number.

Even if the fake reference somehow survives the vetting process, it is hard to keep and live a lie, especially when you never know when the truth may come out.  For example, a supervisor or co-worker may meet someone in your industry that somehow spills the beans. Furthermore, if a person gets a position they cannot actually perform due to a fake reference, it is just a matter of time before they get a negative performance appraisal. 

In addition, co-workers that suspect a fraud have also been known to do their own digging. Furthermore, most employers have employment applications that clearly state that if a person has lied during the application process, it is grounds for termination no matter when discovered.  There is now statistical evidence suggesting that if a person is dishonest in the way they get the job, they the will likely be dishonest once in the job. Once a fabrication is discovered, the resulting termination and the inability to use the most recent employment on your resume can leave a big unexplained employment gap and impact future job searches.

Certainly, applicants have the right to put their best foot forwards, and to cast themselves in the best possible light. But when the resumes goes beyond mere puffing into lies, fiction and fabrication, the long lasting damage to your career,  the emotional energy required to live a lie and the damage to your personal integrity  is just not worth it.

Job Applicants and Online Employee Background Screening Software

A recent post on an HR blog concerned an applicant who was directed online to web-based background screening software to fill out information, finding it took 80 minutes. Not surprisingly, this applicant was not pleased with the amount of time and effort it took to fill out on online background form. Such dissatisfaction can actually lead to qualified applicants going elsewhere. See: http://www.risesmart.com/risesmart/blog/feeling-dissected-by-pre-employment-screening-software/

Employment Screening Resources (ESR)  believes that an applicant’s time is valuable and the online system for a background check should respect the applicant and reflect the value the employer places upon recruiting qualified candidates. The ESR system, for example, only takes a few minutes of an applicant’s time to fill out online. It only asks those questions that are strictly necessary for the screening an employer wants and does not waste time by asking for information that is not needed for the screening involved. It also transfers information already put into an Applicant Tracking System (ATS), if the ATS is able to send it. Also, all work is done in the US in a professional environment, and not sent offshore or into private homes for processing, so applicant privacy and data protection is much greater. Applicants that have had a negative experience with using online background screening systems to fill out their own data may want to suggest that the employer look at other systems, such as the ESR system at: http://www.esrcheck.com/Applicant_Generated_Reports.php

Due diligence risk management and Employment Screening

In the April, 2009 ESR Newsletter, ESR reported on a case in Ohio where a negligent hiring lawsuit was filed on behalf of a sleep clinic patient that was sexually molested by a staff member.  http://www.esrcheck.com/newsletter/archives/April_2009.php.  The article reported that a technician was facing gross sexual imposition and sexual imposition charges for allegedly molesting five victims.  The lawsuit “accuses the sleep clinic of negligence for hiring (the worker) and failing to properly supervise him.”  

Another sleep clinic case, this time from California is now in the news.  According to a story in the Monterey County Herald, a sleep technician was accused of sexual misconduct and the case eventually resulted in a no contest plea to a battery charge.  The case even lead to a new law in California that regulated workers in sleep clinics and required them to pass background check.  See:  http://www.montereyherald.com/local/ci_13864096 

These stories demonstrate a fundamental fact of life for employers. In deciding how extensively to perform background screening, employers need to consider the risks involved.  Patients in a medical facility are highly vulnerable and therefore at greater risk. Presumably, patients at a sleep clinic are even more vulnerable since they are there to sleep.

Examples where employers may have an increased duty of care are: 

  • The workers have contact or responsibilities with groups at risk, such as the young, infirmed, or elderly.
  • Jobs such as a security guard, where a person acts under a “color of authority.”  A person who wears a uniform is even a higher risk since a person may assume they have authority and may let their guard down. 
  • Jobs with special responsibilities such as an apartment manager that has the master key to all of the apartments.
  • Jobs where a worker has access to sensitive consumer information, such as credit card numbers or Social Security numbers.
  • Jobs where by statute, there is particular sensitivity.  An example can be safety sensitive positions such as workers at nuclear plants.  Sarbanes-Oxley compliance is another area where that may create a higher duty of care.
  • Jobs where workers enter homes, or where other unique risks exist.  A person in their own home can be extremely vulnerable since they are shielded from the public and cannot obtain help easily.  In fact, an organization called the Sue Weaver Cause advocates greater due diligence where workers enter homes.  According to their website:
    “August 27, 2001, Sue Weaver was brutally raped and beaten to death by a twice convicted sex-offender hired to do service work in her home. Sue had contracted with a major department store to have the air ducts in her home cleaned.  (The department store) did not conduct criminal background checks on those workers they sent into their clients’ homes.”   For more information, see:  http://www.sueweavercause.org/  

To review the risk management considerations for your screening program, contact Jared Callahan at 415-898-0044 or e-mail him at jcallahan@esrcheck.com

Calling unlisted former employers for employment reference

From the ESR mailbox: I have heard that it is against the law to check any reference other than those provided by the applicant. For example, if an applicant had a job that was not listed on the resume or application, can a background firm or employer still contact that person?

Answer: We are not aware of any legal prohibition against contacting “unlisted” individuals to perform reference checks as part of the employment process. The consent that is given to employers or screening firms to verify past employment or qualifications is not limited to just those individuals an applicant chooses to list or reveal

However, the unlisted” person should only be contacted if the person has knowledge relevant to employment and should only be asked job related questions. Questions for example, about legal off-duty conduct would not be proper. Furthermore, any questions should certainly be non-discriminatory and not an invasion of personal privacy. Typically, a background firm is asked to contact listed employers. There are circumstances however where the person in charge of hiring decides to go a deeper because they are hiring for an important position. The hiring manager hiring may contact the listed references, and then ask who else has they can call that has knowledge about the applicant. This is known as a developed reference. The purpose is to develop the names of other individuals who know the applicant and to get a candid assessment from someone who perhaps has not been “prepared” to give a reference. The topic of unlisted employment may also come up if there are unexplained gaps in employment, and the employer wants to dig deeper. Unlisted jobs may also appear on automated employment verification databases.

One important caveat-”a background firm will typically not contact a current employer without specific permission in order to avoid causing any problems on the current job if the new job doe not work out.

Employers with questions about background checks are free to send them to Jared Callahan at jcallahan@ESRcheck.com . For more information generally, see www.ESRcheck.com

ESR is closed for the holidays on November 26 and 27. Happy Thanksgiving.

Ambiguous References and the Fine Art of a Polite Negative References

Who says there is no humor in the hiring process?  Employers, Human Resources professionals and Recruiters   may enjoy the book, “Lexicon of Intentionally Ambiguous Recommendations (LIAR),” by Robert Thornton, available on Amazon.  The book gives a whole new meaning to the term “damned with faint praise.”  It answers the age old question of how to give a truthful recommendation without getting sued!

Here are  just a few examples from this very clever book:

“Her ability is deceiving” (She lies, cheats and steals)

“No salary would be too much for him.” (He is not worth anything)

“It was a pleasure working with her the short time I did.”  (Thankfully it was not longer)

“I am pleased to say that this candidate is a former colleague of mine” (I can’t tell you how happy I am that she left our firm)

“He’s a man of many convictions.” (He’s got a record a mile long). 

“She gives every appearance of being a reliable, conscientious employee”  (But appearances can be deceiving)

Any employers, recruiters or HR or Security Professionals that want to share their own favorite way of  giving ambiguous references, please send them to Jared Callahan at ESR by  e-mail at jcallahan@esrcheck.com