Use of Big Data for Background Checks Will Be Closely Watched for Potential Discrimination Issues

Written By ESR News Blog Editor Thomas Ahearn

In October of 2016, the U.S. Equal Employment Opportunity Commission (EEOC) held a public meeting at agency headquarters in Washington, D.C. on how “Big Data” – the use of algorithms, data scraping of the internet, and other means of evaluating thousands of pieces of information about an individual – was being used to make hiring and other employment decisions during background checks. The potential controversies surrounding the use of Big Data is Trend Number 10 in the Employment Screening Resources® (ESR) 10th annual ‘ESR Top Ten Background Check Trends’ for 2017.

“Big Data has the potential to speed up the hiring process and to give employers more tools to both select the right candidates faster but also to identify applicants who employers may consider unqualified or risky. But at the same time, the use of Big Data presents numerous challenges when it comes to fairness, accuracy, and avoiding legal pitfalls, such as creating a discriminatory impact,” says ESR founder and CEO Attorney Lester Rosen. The list featuring emerging and influential trends in the background check industry for 2017 will be available at www.esrcheck.com/ESR-Top-Ten-Background-Check-Trends.

EEOC Chair Jenny R. Yang stated in a press release about the EEOC meeting on October 13, 2016, that Big Data had “the potential to drive innovations that reduce bias in employment decisions” but also added that it is critical that Big Data tools “are designed to promote fairness and opportunity, so that reliance on these expanding sources of data does not create new barriers to opportunity.”

That same month, the EEOC – the agency responsible for enforcing federal laws prohibiting employment discrimination – also approved an updated Strategic Enforcement Plan (SEP) for Fiscal Years 2017-2021 that reaffirmed the Commission’s commitment to advancing equal opportunity in America’s workplaces while also recognizing new areas of potential concern such as the use of Big Data for screening.

The EEOC SEP focused on discriminatory recruitment and hiring practices that may include Big Data background screening tools “that disproportionately impact workers based on their protected status (e.g., pre-employment tests, background checks impacting African Americans and Latinos, date-of-birth inquiries impacting older workers, and medical questionnaires impacting individuals with disabilities).”

In May of 2016, the White House released a report entitled Big Data: A Report on Algorithmic Systems, Opportunity, and Civil Rights that revealed Big Data information “high in volume, velocity, and variety that it requires new forms of processing for decision making” could uncover or reduce employment discrimination but also risk enabling and automating potentially discriminatory hiring practices.

The report – the third in a series by the Obama Administration’s Big Data Working Group – challenged the assumption that Big Data is objective:  It is often assumed that big data techniques are unbiased because of the scale of the data and because the techniques are implemented through algorithmic systems. However, it is a mistake to assume they are objective simply because they are data-driven.

Instead, a White House blog about the report entitled ‘Big Data: A Report on Algorithmic Systems, Opportunity, and Civil Rights’ stated that while the report “illustrates how big data techniques can be used to detect bias and prevent discrimination. It also demonstrates the risks involved, particularly how technologies can deliberately or inadvertently perpetuate, exacerbate, or mask discrimination.”

Lastly, in January of 2016, a report released by the Federal Trade Commission (FTC) entitled Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues discussed the benefits and risks created by the use of Big Data analytics, the consumer protection and equal opportunity laws that currently apply to Big Data, and provided recommendations to businesses on how to properly use Big Data analytics.

These reports from the White House, FTC, and EEOC – all released in 2016 – indicate that the U.S. Government will be closely watching the use of Big Data by businesses during 2017. Employers will have to make sure that if they use Big Data while performing background checks for employment that they do not knowingly, or unknowingly, enable and automate potentially discriminatory hiring practices.

BONUS TRENDS

Here are two “bonus trends” that just missed making the ‘ESR Top Ten Background Check Trends’ for 2017 list:

Global Screening Will Have to Adapt to EU-US Privacy Shield and Worldwide Talent Shortage

Employers around the world who perform global screening are facing the largest talent shortage since the recession as 40 percent of employers worldwide have experienced difficulties filling jobs – the highest level since 41 percent in 2007 – according to a survey of 42,300 global employers from 43 countries by ManpowerGroup. The countries having the most talent shortage problems included Japan (86 percent), Taiwan (73 percent), and Hong Kong (69 percent). Skilled trade jobs such as electricians, carpenters, and plumbers were the hardest to fill globally for the fifth consecutive year, while Information Technology (IT) roles jumped seven places to be the second hardest jobs to fill. Another challenge for global screening is the EU-U.S. Privacy Shield Framework. Created to replace the invalidated “Safe Harbor” agreement for data transfers between the European Union (EU) and the United States (U.S.), the EU-U.S. Privacy Shield Framework that launched on August 1, 2016, may face challenges from Data Protection Authorities (DPAs) in 2017. Designed by the U.S. Department of Commerce and European Commission to provide companies on both sides of the Atlantic with a mechanism to comply with EU data protection requirements in support of transatlantic commerce, the EU-U.S. Privacy Shield Framework includes seven commonly recognized privacy principles combined with 16 equally binding supplemental principles. The 15-year-old international agreement called “Safe Harbor” was invalidated by a European Court of Justice ruling on October 6, 2015 in the case of Maximillian Schrems v. Data Protection Commissioner where an Austrian citizen lodged a privacy complaint about his data being transferred to servers in the U.S. for processing.

Trump Administration Will Bring Changes to Employment Eligibility Verification Process Including E-Verify

The transition from President Barack Obama to incoming President Donald Trump could be a “very significant change of course” that would include changes in the immigration policy for the United States such as mandatory use of the E-Verify electronic employment eligibility verification system, according to a Bloomberg BNA report. E-Verify is a free and voluntary web-based system that allows U.S. employers to verify the work authorization of newly hired employees by checking information on the ‘Employment Eligibility Verification, Form I-9’ with Department of Homeland Security (DHS) and the Social Security Administration (SSA) databases. Kansas Secretary of State Kris Kobach – who played a significant role in draft the drafting Arizona’s strict immigration law S.B. 1070 – told Bloomberg BNA that the Trump transition team for immigration policy on which he serves is already creating a “to do list” of actions the incoming president “may want to do in immigration policy.” That list includes the mandatory use of the E-Verify system – which is currently optional for most U.S. employers – to ensure newly hired employees are authorized to work in the country. Since mandatory E-Verify “would require congressional action,” the Trump transition team for immigration policy is drafting bills to introduce in Congress. In addition, the U.S. Citizenship and Immigration Services (USCIS) – the government agency that oversees lawful immigration to the United States – published a revised version of Form I-9, Employment Eligibility Verification on November 14, 2016, with changes designed to reduce errors and enhance form completion using a computer. Employers must use only the new version of the Form I-9 dated 11/14/2016 N by January 22, 2017. Until then, employers may continue to use the version of the Form I-9 dated 03/08/2013 N or the new version. The new Form I-9 is available on the USCIS website at www.uscis.gov/system/files_force/files/form/i-9.pdf.

ESR Top Ten Background Check Trends for 2017 Webinar

Employment Screening Resources® (ESR) founder and CEO Attorney Lester Rosen will host a live complimentary webinar entitled ‘ESR Top Ten Background Check Trends for 2017’ on Wednesday, January 18, 2017, from 11:00 AM to 12:00 PM Noon Pacific Time. To register for the free webinar, please visit https://attendee.gotowebinar.com/register/733293271056375556.

The webinar is approved for 1.0 (HR (General)) recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute (HRCI). The webinar is worth 1.0 Professional Development Credit (PDC) from the Society for Human Resource Management (SHRM) for the SHRM Certified Professional (SHRM-CP™) and SHRM Senior Certified Professional (SHRM-SCP™).

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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