All posts by Les Rosen

EEOC Public Meeting Explores Use of Credit Histories of Job Applicants for Employment Background Screening

By Thomas Ahearn, ESR News Blog

According to a press release from the U.S. Equal Employment Opportunity Commission (EEOC), the EEOC held a public Commission meeting on Wednesday, October 20 to hear testimony from representatives of various groups, social scientists, and the Federal Trade Commission (FTC) on the growing use of credit histories of job applicants as selection criteria during employment background screening.

The EEOC Chair commented that the discussion provided important input into EEOC’s work to ensure that “the workplace is made free of all barriers to equal opportunity.” She also said that as a result of high unemployment forcing more people into the job market, an increasing number of job applicants are exposed to employment background screening tools such as credit checks that could unfairly exclude them from job opportunities. 

The Commission heard from a diverse set of experts, including one from the National Consumer Law Center (NCLC) who expressed concerns that the use of credit histories creates a “Catch-22” situation for job applicants during the current period of high unemployment and high foreclosures, both of which have negative impacts on credit. Others explained using credit histories for employment purposes can have a disparate impact on protected groups, including people of color, women, and the disabled. 

Representatives from the business community – including the U.S. Chamber of Commerce (USCC) and the Society for Human Resources Management (SHRM) – told the Commission that the use of credit histories is permissible by law, limited in scope, and predictive in certain situations of reliability. A recent survey from SHRM revealed that 13 percent of organizations conduct credit checks on all job candidates and another 47 percent consider credit history for selected jobs. Also, it is the experience of SHRM member companies that few organizations utilize credit histories for every job opening. 

However, an industrial psychologist said that there is little research exploring the implications of using credit checks in the employment context and – given the potential for discriminatory exclusion – he concluded that it would be wise to use an applicant’s credit history only within the context of a thorough background check.

The statements of all the panelists at the meeting, along with their biographies, can be found on the EEOC website at A complete transcript of the testimony will be posted later.

For more information about employment background checks, visit Employment Screening Resources (ESR) at


New Research Finds Companies Using Employment Background Screening Experience 60 Percent Better Quality of Hire Compared to Companies without Screening

By Thomas Ahearn, ESR News Blog

A recently published new study on employment background screening has found that organizations using automated tools for background checking, employment and education verification, and reference checking experienced 60 percent better quality of hire compared to those without employment background screening solutions in place.

The new report from Aberdeen Group, a Harte-Hanks Company – “Employment Screening: Mitigating Risk, Driving Down Cost” (September 2010) – is based on over 400 survey respondents to Aberdeen’s 2010 Talent Acquisition Strategies study and looks at the components of employment background screening that are most widely used and how these components impact hiring performance.

The report found that employment background screening is fundamental to best-in-class performance. When asked what kinds of technology they currently used as part of their talent acquisition process, over three-quarters (78 percent) of survey respondents cited the use of employment background screening solutions. The report also found that companies using employment background screening were 43 percent more likely to achieve “Best-in-Class” companies, which Aberdeen Group defines as the top 20 percent of performers along the following categories:

  • First year retention of hires.
  • Percentage of new-hires that were the top-choice candidate.
  • Average year-over-year decrease in time-to-fill vacant positions.

Overall, the research revealed that among Best-in-Class companies the most utilized employment screening technology was employment background screening, with 83 percent using employment screening such as background checks and drug testing.

As for the most common aspects and elements of an employment background screening solution, the Aberdeen Group found that out of all of the survey respondents:

  • 88 percent performed domestic criminal background checks.
  • 87 percent performed previous employment/education verification.
  • 72 percent performed reference checking.
  • 60 percent performed drug screening.

The use of employment background screening has shown an impact on overall quality of hire, with an increase of 7 percent year-over-year for organizations using employment background screening as compared to a 5 percent average increase among those that did not use employment background screening.

The need for criminal background checks and employment and education verifications is key when it comes to risk inherent in hiring, the Aberdeen Group survey found, since even seemingly ideal candidates may have issues unearthed via background checks that make them undesirable for hiring and prospective employees may be included to stretch the truth about their educational backgrounds or previous employment in the current ultra-competitive job market.

The Aberdeen Group survey also shows these two employment background screening elements – criminal background checks and employment/education verifications – are even more important in the financial services, healthcare, and public sector environments:

  • Financial services: 93 percent performed criminal background checks and 97 percent performed employment/education verifications.
  • Healthcare: 94 percent performed criminal background checks and 94 percent performed employment/education verifications.
  • Public sector: 100 percent performed criminal background checks and 83 percent performed employment/education verifications.

Lastly, when it comes to selecting a partner for providing employment background screening, the Aberdeen Group survey found that the speed with which the process was completed (62 percent of respondents) and the accuracy of the results (54 percent of respondents) were far and away the top criteria.

For more information on employment background screening, visit Employment Screening Resources (ESR) at


Hot Off the Press: EEOC To Hear Testimony on Employer Use of Credit Reports as Background Screening Tool at Open Meeting on October 20

By Thomas Ahearn, ESR News Blog

The Equal Employment Opportunity Commission (EEOC) has announced it will hold a meeting Wednesday, October 20, 2010 to hear testimony about employer use of credit reports as a background screening tool and to investigate the practice of using credit histories as employment screening devices.

According to various news releases and news reports, some of the testimony aims to clear up some common misperceptions about the use of employment credit reports by employers, including a common misperception that employment credit reports include a credit score.

The House Financial Services Committee conducted a hearing in September to discuss the Equal Employment for All Act (H.R. 3149), a bill aimed at severely limiting the use of credit checks on employees that would amend the Fair Credit Reporting Act (FCRA) to make it unlawful to discriminate against job applicants based on consumer credit reports. The Equal Employment for All Act would make it unlawful to base adverse-employment decisions against job applicants and current employees on consumer credit reports.

The EEOC last held a meeting on credit checks in 2007. No action was taken. The meeting on Wednesday, October 20, 2010 will be held at 9:30 A.M. Eastern Time in the Commission Meeting Room on the First Floor of the EEOC Office Building, 131 “M” Street, NE, Washington, D.C.

The Employment Screening Resources (ESR) News Blog has several previous posts dealing with the issue of employers using employment credit reports during background screening. As reported before on the ESR News Blog, several states have already passed laws restricting the use of credit checks in hiring: 

ESR has long taken the position that employers should proceed with caution with using applicant and employee credit histories in the background screening process and not use employment credit reports unless they can clearly articulate a business justification, which normally means that that the job applicants or current employees have or will hold “sensitive” positions in which they may handle money or have access to personal data.

ESR also co-authorized a white paper with LexisNexis, “The Use of Credit Reports
in Employment Background Screening – An Overview for Job Applicants,”
on the protections applicants have when it comes to credit reports and the fact that credit reports do not contain credit scores. To read the white paper, visit:

For more information about background checks, visit Employment Screening Resources (ESR) at


Former Texas A & M Administrator Charged with Fraudulent or Fictitious Degree for Allegedly Lying on Resume and Job Application

By Thomas Ahearn, ESR News Blog

The Brazos County (TX) Attorney has filed formal charges against a former top-level Texas A&M Administrator after a background check found he allegedly lied on his resume and job application documents about his degrees and military service.

According to a report on Channel 3 serving Bryan and College Station Texas, the former Senior Vice President for Administration at Texas A&M was charged with Fraudulent or Fictitious Degree, a Class “B” Misdemeanor that carries a fine up to $2,000 and six months in jail.

In June, the accused resigned from his position following a background check of his credentials that revealed he had allegedly lied on his resume and job application by stating he was a Navy SEAL and had a master’s or doctorate degree from Tufts University. A plea hearing is set for November 10th, according to court documents.

Resume fraud is a growing problem, especially during the recent down economy, as people struggle to find work and are willing to do anything – including lie about their experience and education – to find a job. A 2003 study conducted by the Society for Human Resources Management (SHRM) found that over half (53 percent) of all job applications contained inaccurate information, a figure that is likely higher given the current economic climate.

For more information on background checks and education and employment verifications, visit Employment Screening Resources (ESR) at


DHS and ICE Announce Record Figures for Fiscal Year 2010 Including 500 Percent Increase in Worksite Enforcement Penalties and Near Doubling of I-9 Audits

By Thomas Ahearn, ESR News Blog

Recently, Department of Homeland Security (DHS) Secretary Janet Napolitano and U.S. Immigration and Customs Enforcement (ICE) Director John Morton announced that ICE worksite enforcement statistics climbed to historically high record numbers in Fiscal Year 2010 – from October 1, 2009 to September 30, 2010 – with more audits of businesses than ever before and increases in prosecutions of employers who hired illegal workers.

According to a news release from the DHS, ICE – the largest investigative arm of the DHS – also removed more illegal aliens than in any other period in U.S. history, removing more than 392,000 illegal aliens, and nearly half of them – more than 195,000 – were convicted of crimes, including murder, sex offenses, and drug violations.

A summary of fines and penalties from ICE reveals that this surge in enforcement of a legal U.S. workforce included a 500 percent increase in penalties from worksite enforcement actions (over $5 million), a nearly two-fold increase in I-9 audits (2,200), a record-breaking 180 criminal prosecutions of employers and the debarring of more than 97 businesses, compared to 30 last fiscal year, with average fines exceeding $110,000.

Due in large part to increased employer scrutiny and several waves of I-9 audits from the U.S. Government, penalties from worksite enforcement inspections have increased in recent months. Here are the latest statistics from ICE comparing Fiscal Year 2010 with Fiscal Year 2009:

  • ICE penalties from worksite enforcement inspections increased to $5,300,000 in FY 2010, up from $1,033,291 in FY 2009.
  • ICE criminally charged a record-breaking 180 owners, employers, managers and/or supervisors in FY 2010, up from 135 in FY 2008 and 114 in FY 2009.
  • ICE conducted more than 2,200 I-9 audits in FY 2010, up from more than 1,400 in FY 2009.
  • ICE debarred 97 business and 49 individuals in FY 2010, up from 30 and 53, respectively, in FY 2009.

Since January 2009, ICE has audited more than 3,200 employers suspected of hiring illegal labor, debarred 225 companies and individuals, and imposed approximately $50 million in financial sanctions-more than the total amount of audits and debarments than during the entire previous administration, according to the news release.

These statistics show that in the past year, ICE has been focusing less on rounding up illegal workers and more on targeting the employers that hire illegal workers through the use of Form I-9 audits and investigations of their hiring practices. In April 2009, the DHS even released a ‘Worksite Enforcement Strategy Fact Sheet’ detailing the most common reasons why a company might receive an audit, as well as who can be targeted.

Now more than ever, U.S. employers must regularly review their Employment Eligibility Verification Form – “Form I-9” – compliance practices. To help maintain Form I-9 compliance and avoid I-9 audits, employers may choose to use the Government’s E-Verify system, an online Electronic Employment Eligibility Verification system that is used along with the Form I-9 to allow employers to check if an employee is legally eligible to work in the United States.

Employers may also choose to have a Designated E-Verify Employer Agent assist them in maintaining compliance in the E-Verify electronic employment eligibility verification process. Employment Screening Resources (ESR) – a Designated E-Verify Employer Agent – can help employers virtually eliminate I-9 form errors, improve the accuracy of their reporting, protect jobs for authorized workers, and help maintain a legal workforce.

For more information about the E-Verify Electronic Employment Eligibility Verification system, visit


Credit Report Case Demonstrates Challenges in Reporting OFAC Terrorist Information in a Background Screening Report

A case involving a consumer credit report used in an automobile purchase demonstrates the potential dangers of terrorist database searches commonly used by background firms. This appears to be the first case in the nation dealing with use of terrorist databases by credit bureaus under the federal Fair Credit Reporting Act (FCRA), and provides guidance for the use of such information by Consumer Reporting Agencies (CRAs), which includes both credit bureaus and background screening firms. Continue reading

U.S. Supreme Court Ponders Question Whether Employment Background Checks by Government Ever Too Invasive

By Lester Rosen, ESR President & Thomas Ahearn, ESR News Blog

A Law Blog on the Wall Street Journal (WSJ) website asks if there are limits to what the government can ask during background checks for employees of defense contractors and at what point – if any – does a government background check into the drug use history of low-level employees violate the constitutional right to privacy of those employees.

The WSJ Law Blog cites an account from the LA Times in which the U.S. Supreme Court was called upon to ponder this interesting question during a “skeptical hearing” to the 28 Caltech scientists challenging the government’s use of background checks due to the fact that Caltech runs the Jet Propulsion Laboratory under a contract with NASA.

Although the Caltech scientists won earlier at the Ninth Circuit, which held that questions on background checks violated their constitutional right to privacy, the LA Times story indicated most Supreme Court justices were more inclined to uphold the background checks as they explored the limits to what the government should be allowed to ask.

While the Times reported some justices would not close the door to all claims of privacy, the acting U.S. solicitor general urged the justices to rule that the government could ask open-ended questions of its employees and contract workers during background checks. A transcript of the Supreme Court arguments can be found at .

However, Employment Screening Resources (ESR) believes it is important to keep in mind that the type of government security background check discussed in the WSJ Law Blog – and by the Supreme Court – is much more in-depth than what private sector employers perform during background checks of their employees.

In the private sector, background checks are done by private companies for private employers, and not the government. Private sector background checks are focused on those things that a person has done in their public lives, such as where they worked, what schools they attended, or public records concerning criminal matters.

For a summary of the more limited tools used in the private sector for background checks, visit the Employment Screening Resources (ESR) ‘Services’ page at


U.S. Citizenship and Immigration Services (USCIS) Publishes New E-Verify User Manuals

By Thomas Ahearn, ESR News Blog

The U.S. Citizenship and Immigration Services (USCIS) has released several newly revised E-Verify publications – including the popular E-Verify User Manual for Federal Contractors (M-574) and E-Verify User Manual for Employers (M-775) – that offer instructions for using E-Verify, an Internet-based system that assists employers with electronic employment eligibility verification of new hires and existing employees.  

Overseen by USCIS and the Social Security Administration (SSA), E-Verify is an online verification system that is used along with the Employment Elgibility Verification Form, or Form I-9, to allow employers to check if an employee is legally eligible to work in the United States. The new E-Verify manuals – while providing instructions on how to enroll in the E-Verify system, verify a work force, and steps to take after receiving a USCIS non-confirmation notification regarding an employee’s employment eligibility – also reflect recent changes to the E-Verify website and offer additional clarification:

  • Updates in the ‘M-775 E-Verify User Manual for Employers’ (September 2010) include guidance on determining an employee’s “Hire Date” for E-Verify – which determines the timing requirements for when employers are expected to complete Section 2 of the Form I-9 and E-Verify – and new Error Checking capabilities such as the unexpired document requirement.
  • Updates in the ‘M-574 E-Verify User Manual for Federal Contractors’ (September 2010) include guidance on the new E-Verify interface, FAQs, and instructions for federal contractors required to register for E-Verify due to the Federal Acquisition Regulations (FAR) E-Verify clause in their contract.

To download the M-775 or the M-574 documents, visit the ‘E-Verify Publications: Manuals and Guides’ page on the USCIS website at

USCIS has also released a new ‘M-776 E-Verify User Manual for E-Verify Employer Agents’ since employers may choose to have a Designated E-Verify Employer Agent assist them in maintaining compliance in the E-Verify electronic employment eligibility process.

Employment Screening Resources (ESR) – a Designated E-Verify Employer Agent – can help employers virtually eliminate I-9 form errors, improve the accuracy of their reporting, protect jobs for authorized workers, and help maintain a legal workforce. For more information about the E-Verify Electronic Employment Eligibility Verification system, visit

For more information about background screening, visit Employment Screening Resources (ESR) at


September 2010 Jobs Report Shows Private Sector Added 64,000 Jobs Marking 9th Straight Month of Private Sector Growth

By Thomas Ahearn, ESR News Blog

The private sector continues to trend up modestly and lead economic recovery, according to the latest jobs report from the Department of Labor (DOL) that showed the private sector added 64,000 jobs in September 2010.

During a speech the same day as the release of the report, President Barack Obama hailed another month of modest job growth in the private sector by saying the private sector had added jobs for nine straight months, while also conceding that tough times carry on for millions of unemployed people.

According to the U.S. Bureau of Labor Statistics (BLS) ‘THE EMPLOYMENT SITUATION — SEPTEMBER 2010’ report, the number of unemployed persons was essentially unchanged at 14.8 million and the unemployment rate held at 9.6 percent in September.

However, the U.S. economy lost 95,000 nonfarm jobs in September overall as Government employment fell by 159,000, mostly due to the departure of 77,000 temporary Census 2010 workers from federal government payrolls and a decline of 76,000 in local government employment.

  • Health care employment rose by 24,000 jobs in September, and health care employment has risen by an average of 21,000 jobs per month this year.
  • Professional and business services added 28,000 jobs in September, with temporary help services accounting for most of the gain.
  • Leisure and hospitality employment increased by 34,000 jobs over the month in food services and drinking places and has risen by 104,000 jobs so far in 2010.
  • Mining employment continued to trend up over the month by adding 6,000 jobs, and has added 77,000 jobs since a recent low in October 2009.

Employment in manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and financial activities showed little change in September, according to the jobs report. Employment in construction edged down (-21,000 jobs) over the month.

Lastly, Government employment fell by 159,000 in September. Approximately 6,000 temporary census workers for the once-in-a-decade U.S. Census remain on the federal government payroll, down from a peak of 564,000 in May 2010.

For more information about jobs and background checks, visit Employment Screening Resources (ESR) at


Jared Callahan of Employment Screening Resources to Speak at Session on Criminal Record Reporting at NAPBS 2010 Mid-Year Meeting in La Jolla CA on October 12

By Thomas Ahearn, ESR News Blog

Jared Callahan, Director of Client Relations at San Francisco area-based Employment Screening Resources (ESR), the company that literally wrote the book on background checks, will speak at a session titled ‘Criminal Record Reporting from an Operational Perspective’ at the National Association of Professional Background Screeners (NAPBS®) 2010 Mid-Year Meeting in La Jolla, California on Tuesday, October 12. The session takes place from 3:00 p.m. to 3:50 p.m. with a repeat session from 4:00 p.m. to 4:50 p.m. Both sessions are in Pavilion II.

For more information about speakers and session descriptions, visit the NAPBS website at or view the 2010 Mid-Year Meeting Conference Program at

Joining Callahan on the panel for the session ‘Criminal Record Reporting from an Operational Perspective’ will be Christine Cunneen of Hire Image, LLC and Fred Giles of CARCO Group. The three panelists will review the myriad of criminal record reporting regulations mandated by National and State laws that CRAs are responsible for complying with, and how they affect day-to-day operations.

In addition to being a licensed private investigator in the state of California, Callahan also works with employers to conduct background checks and screenings and teaches them about legal compliance efforts across the 50 United States. He began his career in employment screening in 1996 with a private investigative firm and has also worked as an investigator in the special investigations unit of a large workers compensation insurance company.

Callahan has presented to the HR Star Conference, CUPA HR, National Human Resources Association, Employment Advisory Council, California Hospital Association, Washington State Healthcare HR Association, National Association of Colleges and Employers (NACE), and currently sits on the Editorial Review Board of the California Employer Advisor.

Founded in 2003 as a non-profit trade association, NAPBS® serves to represent the interest of companies offering background screening. Their mission is to promote ethical business practices, compliance with the Fair Credit Reporting Act (FCRA), and awareness of issues related to consumer protection and privacy rights within the background screening industry.

The NAPBS® 2010 Mid-Year Meeting – with the theme of ‘Navigating Uncertain Waters: Effective Leadership in Today’s Market’ – lasts from Sunday, October 10 to Tuesday, October 12 at the Hilton Torrey Pines in La Jolla, California. During the opening ceremony on Sunday, the Background Screening Credentialing Council (BSCC) is expected to announce companies that have achieved accreditation in the Background Screening Agency Accreditation Program (BSAAP).

About Employment Screening Resources (ESR):
Founded in 1996 in the San Francisco area, Employment Screening Resources (ESR) literally wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen. The company is a leading provider of information, education, and training on “all things background checks” and is dedicated to promoting a safe workplace for both employers and employees. In 2003, ESR was rated the top U.S. employment screening firm in the first independent study of the industry. To learn more about Employment Screening Resources, visit or contact Jared Callahan at 415.898.0044 or