Pre-Employment Screening Background Check Blog for Employers, Human Resources and Security by ESR

Employment Screening Resources (ESR) a leading national employment screening firm based in the San Francisco area, has released its third annual Top Ten Tends in Screening and Hiring for 2010.

ESR has identified new trends that are starting to make a difference, as well as old trends that have evolved as the screening industry matures and as plaintiff’s attorneys, including class action lawyers, have started to focus on background checks.  In 2009 for example, ESR noted that the use of social networking sites as a hiring tool would merely be a “hot topic.”  In 2010, the trend has been upgraded to concerns over the potential for litigation alleging the unfair use of social networking sites.   
 
Additional forces that will shape the screening industry and hiring in 2010 are advancements in technology as well as the constant struggle to balance privacy and fairness with security and due diligence.  For instance, the ease with which criminal records can be aggregated conflicts with the laws against the discriminatory use of criminal records. 
 
Another issue related to the industry maturing is the proliferation of fly-by-night background check sites that have jumped on the screening bandwagon to make a quick buck, often using fear tactics or the lure of getting “inside information.”  Of course, legitimate employers understand that employment checks are a professional service that is heavily legally regulated.   In fact, concerns over accuracy and compliance with the requirements of the federal Fair Credit Report Act (FCRA) are likely to cause an increase in lawsuits and class actions in 2010.
 
Other trends are related to privacy, government-mandated screenings, and the emergence of best practice for international background checks.  An issue related to the recession is problems associated with fraudulent educational and employment claims. 

One very positive development that will help employers in 2010 is that the National Association of Professional Background Screeners (NAPBS) has been firmly established as the voice of the screening industry, and is very pro-active in promoting best practices. 
 
“Employers that do not exercise due diligence to weed out potential bad hires are certainly taking an unnecessary risk and exposing a business to serious legal and financial consequences,” said Lester S. Rosen, attorney at law and founder of ESR and author of two books on background screening.  “On the other hand, an employer also faces a risk if they are not using appropriate tools and do not appreciate that, as with all matters related to employment, this area is heavily legally regulated.”  
 
The trends are reviewed at:  http://www.esrcheck.com/2010-trends-backgroundscreening-industry.php

The top trends are:
 
1.      Increased focus on whether the use of credit reports and criminal records are discriminatory.  
2.      More lawsuits including class action litigation over accuracy, privacy, and consumer rights. 
3.      Pressure on privacy and data protection including the physical location of data.
4.      The battle over databases will continue with the  latest wrinkle being the proliferation of cheap “do-it-yourself” websites and even apps for smart phones. 
5.      Lawsuits for unfair use of Social Networking Sites may arise. 
6.      Increased technology will bring about the end of paper and faxing for employment screening.
7.      An increase in fraudulent employment and educational claims due to the pressure of the recession.   
8.      I-9 and other government requirements will grow. 
9.      Screening will expand beyond new employees to vendors and others on premises and even consumer-generated checks.
10.     International screening will be under more scrutiny and best practices will start to emerge,
11.     Bonus Trend:   The emergence of the National Association of Professional Background Screeners (NAPBS) as the voice of the industry and the continuing efforts to establish best practices

More information on background checks and employee screening is at: www.ESRcheck.com

Employment Screening Resources (ESR), a leading national employment screening firm announced today the release of a Resource Center on its web site, containing “All Things Background Checks.” 

The new feature is intended to provide one  centralized location for ESR clients to keep current on the critical task of hiring a workforce that is safe and effective.  The site also allows Employers, Human Resources and Security Professionals, Recruiters and Job Applicants to locate resources on screening and to keep current on evolving issues affecting hiring by going to just one site.

Employment Screening Resources (ESR) is the firm that literally wrote the book on background checks, The Safe Hiring Manual, and provides pre-employment screening services and drug testing internationally.  The firm specializes in legal compliance expertise and industry leading technology, service, accuracy and turnaround. 

The new Resource Center starts with twelve icons, each directing users to a different area, including sections on whitepapers by ESR, Legal Resources, books, courses and even a section for job applicants.  One of the features includes access to ESR’s proprietary summary of staff opinion letters issued by the Federal Trade Commission.  The ESR blog, which is updated frequently, ensures that users of the site are updated on the latest trends and legal developments when it comes to safe hiring.  

“We are very pleased to have the opportunity to provide this critically important information to employers and consumers,” commented Jared Callahan, Director of Marketing, and a national speaker on topics related to safe hiring.  “Background screening is a critical part of the process in identifying the best employees and with this new Resource Center, employers may simply go to just one site to find the information they need.”

See: http://www.esrcheck.com/Resources/

2010 Trends in Screening–Trend Ten:  International screening will be more prevalent 

Given the mobility of workers backcross international borders, international background checks have presented challenges for employers.  There are 192 countries in the world (using the United Nations membership list). That means that there is a great deal to keep track of. Every country of course has its own system and rules. Added to that are international data and privacy protection issues. In the past. Some employers have avoided international background checks due to the perceived difficulty. Due to the number of resources now readily available, an employer that fails to include an international dimension to their screening could well find that they are not exercising due diligence in hiring when it come to applicants that have spend time outside of the United States. 

However, international screening is more complicated then domestic U.S. screening. The complications are compounded by the fact that different screening organizations are giving information to employers that appears to be contradictory. Some firms say certain countries do not have criminal records available, while another firm may disagree.  Some firms say that a special release is needed whereas other firms indicate that for a number of countries that no additional releases are needed beyond what the applicants normally signs. In this age of information, it is odd that there is still uncertainty  as to exactly what criminal records are available from each country, and the nature and coverage of the records, such as whether the record is just for a particular court, city or state (or province), or nationwide.  This coming year could well see the emergence of generally agreed upon best practices for international criminal checks.

For more informatin on international checks by ESR, see:  http://www.esrcheck.com/international.php

(Employment Screening Resources (ESR), a leading national online employment screening background firm, is releasing the  ESR “Third Annual Top Ten Trends in the Pre-Employment Background Screening Industry” for 2010.   This is the Ten of the ten trends ESR will be tracking in 2010.)

An opinion issued by the U.S. District Court in Northern District of Illinois in 2003 provides a case study on what an employer and screening firm should NOT do when it comes to employment background checks.

According to the allegations filed in the case, the plaintiff was contacted by a major hotel and offered a position. On his first day, he completed several forms, including an employment application where he truthfully stated he had no criminal record.

The application contained an authorization for a background check that the plaintiff did not initial. There was no indication in the court’s opinion that any separate disclosure was signed as required by the FCRA.

After employment began, the major hotel had a background screening firm to do a background check. The screening firm mistakenly reported that the plaintiff had been convicted of a misdemeanor and served six months in jail. According to the court opinion, the plaintiff in fact did NOT have a criminal conviction. Neither the major hotel nor the background firm investigated the denial, and the plaintiff was terminated. To make matters worse, the plaintiff alleged that after he was fired the major hotel told third parties that he was fired because he lied on his application and spent time in jail. The plaintiff eventually found a new job, but at a substantially lower compensation.

Assuming for educational purposes  all these facts were true (keeping in mind that allegations are not proof) , how many mistakes did the major hotel and the background firm make? Here are some of them—

• Failed to provide a separate Disclosure for the background check under the FCRA.
• Failed to comply with the adverse action rules under the FCRA. If the consumer applicant had the chance to explain, it could all have been cleared up.
• Failed to re-investigate when told information was wrong.
• Although the reasons for the mistaken criminal records are not clear, the question arises if reasonable procedures were used in obtaining the background data. 

The allegations in this case demonstrates the importance of understanding the legal requirements for a screening program.  To determine if an employer is legally compliant, contact ESR for an audit of your program, or see the book by  ESR, “The  Safe Hiring Audit at http://www.backgroundchecktraining.com/Safe-Hiring-Audit.asp  Also, see an article by ESR called, The FCRA in Four Easy Steps for Employers at http://www.esrcheck.com/articles/Complying-with-the-Fair-Credit-Reporting-Act.php

To determine if your current screening firm knows what they are doing, do a vendor audit using: http://www.esrcheck.com/diligence-audit-current-provider.php

2010 Trends in Screening–Trend Nine: Increased need for employer due diligence

Another impact of the recession is the likelihood of applicant fraud.  Fraudulent educational claims, or worthless diplomas from degree mills, are already familiar problem for employers, recruiters and HR professionals.  However, resume fraud took on an added urgency in 2009 with the advent of services that would actually create fake employment references from fake companies.  The service apparently even included a phone number that an employer could call in order to reach a service that in fact would verify the fake employment.  Although statistic are not yet available, anecdotally it appears that some job applicants have been willing to resort to these extreme and dishonest measures to gain an advantage in the job market. 

In the long run, worthless diplomas bought over the internet or scams to create manufactured past employment will probably be unsuccessful for the most part, provided that employers exercise some due diligence.  For fake education, a competent background firm will typically verify first if a school is legitimate.  If the school does not appear on accepted lists of accredited institution, then a screening firm can review lists of known diploma mills and scams.  Screening firms will also verify if the accreditation agency is for real, since fake schools have resorted to creating fake accreditation agencies.  

In addition, pulling of a fake job reference is getting much more difficult.    A good background firm will not simply call the name and number provided by the applicant.  Professional screeners 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.   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.  

The bottom-line for employers in 2010 is taking extra caution to ensure you are hiring bona fide employees. 

(Employment Screening Resources (ESR), a leading national online employment screening background firm, is releasing the  ESR “Third Annual Top Ten Trends in the Pre-Employment Background Screening Industry” for 2010.   This is the Ninth of the ten trends ESR will be tracking in 2010.)

A recent survey quoted in Security Management Magazine demonstrates the risk to privacy and data protection when it comes to  off shoring.  According to a new survey, of the firms that outsourced IT jobs to other counties, about half indicted that their security has been negatively impacted. And 61% indicated their company had experienced a data breach.    The study noted data breaches occurred in just 35% of the companies that do not send IT jobs outside of the U.S.  The story and more information about the study,   is available at:  http://www.securitymanagement.com/article/outsourcing-risk-006564 

This survey naturally raises questions as to the safety of sending Personally Identifiable Information (PII) of American job applicants off shore in order to prepare background checks.  A group  called ConcernedCRA now has more than 120 screening firms that have signed on to a standard that opposes sending Personally Identifiable Information (PII) offshore beyond U.S. privacy laws to be processed.  See http://www.concernedcras.com/  A bill was introduced into Congress in June 2009 that would limit the offshoring of data without notice in the financial sector.  A shocking undercover investigation by the BBC in 2009 showed just how easy it was to purchase PII from a call center in India. Of course, identity theft can occur in the U.S., but once data physically goes beyond U.S. privacy laws, consumers have less resources and recourses.  

Employment Screening Resources (ESR) does NOT send U. S. applicant information outside of the U.S. for processing.  ESR takes the position that once data leaves the U.S., the data is beyond the reach of U.S. privacy laws and there is no meaningful recourse for a U.S. consumer.  ESR does all processing and preparation in the U.S.  in order to protect applicants and employers.  In some countries, it is a well known fact that U.S. identities are stolen and used for identity theft.  As a practical matter, someone in the U.S. has no ability to hire a lawyer in a foreign country to pursue legal action or contact a foreign police authority to get any action taken.  The only exception is where ESR is asked to perform an international verification and the information resides outside of the U.S.  Even in that situation, ESR goes to great length to protect applicant data. 

The bottom-line:  Before selecting a screening firm determine if that firm is processing information outside of the U.S.  The risk is significant, even if the off shore facility is wholly owned or a subsidiary of a U. S. firm.   An employer needs to have a full understanding of how data and privacy is protected once it leaves the U.S., and what duty is owed to job applicants in terms of notice that their data is going abroard.

2010 Trends in Screening–Trend Eight:  Screening will expand beyond new employees to vendors and others on premises

This is another ongoing area that will heat up due to the recession.   In a recovery period, employers typically turn to temporary employees before committing themselves to full-time hires.  However, under the legal doctrine of co-employment, an employer has exposure regardless of whether the worker is on the company payroll or being paid by a staffing firm. With lawsuits for negligent hiring on the rise, employers can still find themselves the target of negligent hiring by failing to supervise the hiring practices of their staffing vendors.  Temporary workers and vendors coming on premises have access to company property and can still create a risk of workplace violence, theft, or embezzlement.  New and additional resources are coming online in 2010 to help employers manage the screening of their vendors. 

Another area where screening will expand is the availability of applicants to run their own background checks.  Applicants will have the ability to screen themselves as part of the job-hunting process in order to find out ahead of time if there is anything in the public records about them that is negative, and as a tool to get an employer’s attention. Of course, an employer must still exercise its own due diligence so that all applicants are treated in a similar fashion, but pre-screening may help applicants get noticed faster.  An area that has yet to establish itself is the continual screening of current workers periodically after they are hired.  As Employment Screening Resources (ESR) has noted in previous articles, there are still issues to be worked out before such a practice gains wide acceptance. 

(Employment Screening Resources (ESR), a leading national online employment screening background firm, is releasing the  ESR “Third Annual Top Ten Trends in the Pre-Employment Background Screening Industry” for 2010.   This is the EIGHT of the ten trends ESR will be tracking in 2010.)

The Federal Trade Commission provides excellent resources on identity theft.  Here is an excerpt from their educational website at: http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/about-identity-theft.html#Whatdothievesdowithastolenidentity

How do thieves steal an identity? 

“Identity theft starts with the misuse of your personally identifying information such as your name and Social Security number, credit card numbers, or other financial account information. For identity thieves, this information is as good as gold.
Skilled identity thieves may use a variety of methods to get hold of your information, including:

1. Dumpster Diving. They rummage through trash looking for bills or other paper with your personal information on it.
2. Skimming. They steal credit/debit card numbers by using a special storage device when processing your card.
3. Phishing. They pretend to be financial institutions or companies and send spam or pop-up messages to get you to reveal your personal information.
4. Changing Your Address. They divert your billing statements to another location by completing a change of address form.
5. Old-Fashioned Stealing. They steal wallets and purses; mail, including bank and credit card statements; pre-approved credit offers; and new checks or tax information. They steal personnel records, or bribe employees who have access.
6. Pretexting.  They use false pretenses to obtain your personal information from financial institutions, telephone companies, and other sources.  For more information about pretexting, click here.” 

Keep in mind that many experts note that the majority of identity theft occurs from businesses.  Employment Screening Resources (ESR) will post additional information in the future on how to prevent and protect against identity theft.