Privacy and Discrimination Concerns with Big Data and International Offshoring will Grow in 2015

 Background Check Trends

Written By Attorney Lester Rosen, Founder & CEO of Employment Screening Resources (ESR)

The rapid growth of “Big Data” – a term used to describe the increasing availability of data of all types – will bring added concerns about privacy and discrimination in 2015. The Federal Trade Commission (FTC) hosted a workshop to explore the impact of big data on consumers while the U.S. Equal Employment Opportunity Commission (EEOC) stated that discrimination laws apply to employment decisions that result from big data. In addition, the “offshoring” of big data to foreign countries beyond U.S. privacy laws brings questions about data protection. This trend is number 8 on the Employment Screening Resources (ESR) 8th Annual ‘ESR Top Ten Background Check Trends for 2015.’ For a list of background check trends, visit http://www.esrcheck.com/ESR-Top-Ten-Background-Check-Trends.

In September 2014, the FTC hosted a public workshop entitled “Big Data: A Tool for Inclusion or Exclusion?” to explore the use of big data and its impact on American consumers. The FTC was also concerned about the use of big data by employers in the background check process. In the workshop, the FTC Chairwoman noted that the FTC is already looking for ways that the use of big data by employers may violate the federal Fair Credit Reporting Act (FCRA), which promotes the accuracy, fairness, and privacy of information in a background check report. More information is available at http://www.ftc.gov/news-events/events-calendar/2014/09/big-data-tool-inclusion-or-exclusion.

At the same FTC workshop, representatives from the EEOC stated that using big data could potentially violate employment laws such as Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the American with Disabilities Act, and the Genetic Information Nondiscrimination Act. EEOC representatives states that Title VII applies to employment decisions that result from big data analytics through a disparate impact analysis. And if the measures or factors used to analyze big data from a background check are not job-related and consistent with a business necessity, and create a disparate impact on protected class individuals, a decision based on such big data could violate the law.

Concerns about the use of big data are not limited to the United States. “Offshoring” – the practice of U.S. companies sending big data of American consumers to foreign countries with cheaper production and labor costs – can have negative effects. Employers in America are under increased pressure to protect big data due to increased “offshoring” of information gathered for a background check report overseas beyond U.S. privacy laws. Concerned CRAs – a group of like-minded Consumer Reporting Agencies (CRAs) dedicated to consumer protection – is against the “offshoring” of big data of U.S. consumers. For more information about Concerned CRAs, visit http://www.concernedcras.com.

A member of Concerned CRAs, Employment Screening Resources (ESR) predicted the use of big data for background check reports back in 2004 in the first edition of “The Safe Hiring Manual”: The future of safe hiring may well involve the creation of these large human capital databases, offering the ability to use the information intelligently and fairly. However, all sorts of issues arise from building a human capital database, including how to score, model, profile and predict without discriminating. Equally important is privacy and the ability of a consumer to fairly access, control and contest what is in the database. However, for the long run the future appears to be heading towards massive databases to facilitate employment.

Employment Screening Resources® (ESR) Service Organization Control 2 “SOC 2” Audit Report confirms that ESR meets high standards set by the American Institute of Certified Public Accountants (AICPA) for protecting customer information. Reviewing a SOC 2 report is becoming increasingly important to ESR’s existing and prospective clients seeking assurance about the effectiveness of controls surrounding security, confidentiality, and privacy of the systems and information used by ESR to process background check orders. For more information about the ESR SOC 2 audit report, visit http://www.esrcheck.com/SOC-2/.

ESR TOP TEN BACKGROUND CHECK TRENDS FOR 2015 WEBINAR

Employment Screening Resources® (ESR) will present a complimentary webinar hosted by ESR Founder and CEO Attorney Lester Rosen titled ‘ESR Top Ten Background Check Trends for 2015’ on Wednesday, January 21, 2015 from 11:00 AM to 12:00 PM Noon Pacific Time. To register for this webinar, please visit the registration link at https://attendee.gotowebinar.com/register/3656006267617568513.