California Employers Face Sticky Situations when Using Background Checks

In his article ‘5 Sticky Background Check Situations Facing California Employers,’ Attorney Lester Rosen, Founder and CEO of San Francisco, CA-area background check firm Employment Screening Resources® (ESR), says employers in the Golden States need to know who they hire to avoid unqualified or dishonest job candidates but, at the same time, must be sure to follow proper legal procedures. The article is available to Northern California HR Association (NCHRA) members in the January 2014 HR West magazine at http://www.nchra.org/displaycommon.cfm?an=1&subarticlenbr=21.

For California employers, Rosen writes that “exercising due diligence in hiring is critical given the very real risk of lawsuits for negligent hiring, not to mention the time and energy wasted and the fallout from hiring a candidate that is unqualified, unfit or dishonest.” But he also warns “background checks take place in a complex legal environment, impacted daily by legislation, governmental regulation and litigation.” Rosen says employers should avoid these five common pitfalls and landmines:

  • 1. California is Different:  When it comes to background checks, Rosen says “California lives up to its reputation of doing things its own unique own way.” California law has its own version of the federal Fair Credit Reporting Act (FCRA), which governs background checks on the national level, the Investigative Consumer Reporting Agencies Act (ICRA).  This law, along with other state laws, adds an additional layer of compliance beyond anything required in the other 49 states.  Other background check requirements include special language in the consent and authorization form, a check box for a free report, and special rules concerning the “offshoring” of Personally Identifiable Information (PII) overseas and beyond U.S. privacy laws.  California employers need to these unique requirements since the California Civil Code section provides for a potential civil exposure of $10,000 per applicant.
  • 2. New EEOC Guidance and “Ban the Box”:  The new U.S. Equal Employment Opportunity Commission (EEOC) Guidance on the use of criminal records in hiring decisions issued in April 2012 “has the potential to totally change how every employer in America approaches hiring,” says Rosen. The EEOC has filed lawsuits and investigated employers for practices that allegedly created a “disparate impact” on minorities with higher rates of arrest and conviction records in violation of Title VII of the Civil Rights Act of 1964. Rosen explains how the EOCC has recommended that even private employers “Ban the Box,” referring to the standard question on most applications as to whether an applicant has a criminal record, along with a “yes or no” box.  Many California cities and the state of California have forms of “Ban the Box” legislation.
  • 3. Databases are Dangerous: Rosen says the use of private databases for criminal background checks that appear to offer nationwide criminal searches at a small price is also a danger point for California employers.  Why? Because these databases are next to worthless in California and potentially violate the California rule that requires public record information on consumers used for employment to be complete and up to date. Even California employers with access to the Livescan fingerprint program to obtain FBI records need to be careful since even the FBI database is full of holes and inaccurate.  Retail theft databases are also potentially problematic due to questions regarding the accuracy and legality of such databases.
  • 4. California and Credit Reports: Some ten states, including California, have now passed laws greatly restricting the use of credit reports for employment purposes.  A California law that took effect on January 1, 2012 – Assembly Bill 22 (CA AB 22) – lists the circumstances allowing an employer to obtain a consumer credit report and requires a special language in the consumer authorization.  Rosen also write that “one of the commonly held myths about credit reports for employment is that the report contains the consumer’s credit score.  That is factually wrong since a credit score is not a valid predictor of job performance.” Rosen suggests California employers “should carefully review the law and determine if the usage is job related and meets legal requirements.”
  • 5. California Restrictions on Social Media: Rosen says California employers should be aware of “numerous traps for the unwary when it comes to looking at Facebook, Twitter, blogs, and other cyber sources” as they may unwittingly discover “information that is potentiality discriminatory, such as age, nationality, ethnicity, national origin, medical concerns, marital status, or other factors that are either discriminatory or not a valid predictor of job performance.” Although the material is online, Rosen also explains “there are still potential issues as to privacy if the content was clearly intended for private use, especially if the web site has a term of use that prohibits commercial use.” Other issues include protected off-duty legal conduct and authenticity.  In 2012, California also passed laws prohibiting employers from requiring applicants to provide their usernames, passwords, and other online-related information in order to increase privacy protections for social media users in the state.

Rosen will present a three hour workshop for NCHRA titled ‘Hiring Safe and Qualified Workers Using Pre-Employment Background Checks’ on Wednesday, February 5, 2014. The event will take place from 9:00 a.m. to 12:00 p.m. Pacific Time at the Robert Half Company on 2929 Campus Drive, Suite 101, in San Mateo, CA. To register for this event, which qualifies for three General Recertification Credits, please visit http://m360.nchra.org/event.aspx?eventID=92592&instance=0.

Rosen founded Employment Screening Resources® (ESR) in 1997 and the firm is accredited by the National Association of Professional Background Screeners (NAPBS®).  He is the author of “The Safe Hiring Manual,” a comprehensive guide to background checks. Rosen also served as the chairperson of the steering committee that founded the NAPBS in 2004 and served as its first co-chair. To learn more about ESR, visit http://www.esrcheck.com, call toll free 888.999.4474, or email sales@esrcheck.com.

About Employment Screening Resources® (ESR):

Founded by safe hiring expert Attorney Les Rosen in the San Francisco, CA-area in 1997, Employment Screening Resources® (ESR) – ‘The Background Check Authority®’– provides accurate and actionable information that empowers employers to make informed hiring decisions for the benefit of their organizations, employees, and the public. CEO Rosen literally wrote the book on background checks with “The Safe Hiring Manual” and ESR is accredited by The National Association of Professional Background Screeners (NAPBS), a distinction held by a small percent of screening firms. Employers choosing ESR know they have selected an agency meeting the highest industry standards. To learn more about ESR, visit http://www.esrcheck.com, call toll free 888.999.4474, or email sales@esrcheck.com.