Tag Archives: Risk Management

Company Pays Over 13 Million Dollars to Settle Suit Alleging Background Check Reports Were Sold to Debt Collectors

A U.S. company providing risk management solutions has agreed to pay $13.5 million and overhaul its background check search product to settle a national class action suit that claimed the firm sold background check reports to debt collectors without following consumer protection laws, according to a report in the Dayton (OH) Daily News that cites the Law360 website. The full story is available at http://www.daytondailynews.com/news/business/lexisnexis-pays-135m-to-settle-suit/nWxJQ/. Continue reading

Employment Screening Resources Partners with GuideOne Insurance SafeChurch Program to Provide Discounted Background Checks

NOVATO, CA – December 17, 2012—Employment Screening Resources (ESR), a nationwide accredited background check firm, is pleased to announce a partnership with the GuideOne Insurance SafeChurch® program, a comprehensive church risk management resource, to offer discounted background check services and expert advice in implementing screening programs to SafeChurch members. For more information about background checks from Employment Screening Resources (ESR) for SafeChurch members, call Toll Free 888-999-4474 or visit https://www.safechurch.com/Pages/bgchecks.aspx. Continue reading

Risk Management Strategy Webinar Hosted by Background Check Expert on July 23

Attorney Lester Rosen, a background check expert and founder and CEO of Employment Screening Resources (ESR), will host a two hour long webinar for BankInfoSecurity.com titled ‘Risk Management: New Strategies for Employee Screening’ on Monday, July 23, 2012 at 3:30 PM Eastern (12:30 PM Pacific) to discuss the latest background check trends facilitating risk management practices that include re-screening current employees after they are initially screened when hired. For more information on the webinar, visit: http://www.bankinfosecurity.com/webinars/risk-management-new-strategies-for-employee-screening-w-282. Continue reading

Background Check Expert Discusses New Risk Management Strategies for Employee Screening in Webinar on July 11

Attorney Lester Rosen, a background check expert and founder and CEO of Employment Screening Resources (ESR), will host a 90 minute webinar for BankInfoSecurity.com titled ‘Risk Management: New Strategies for Employee Screening’ on Wednesday, July 11, 2012 starting at 10:00 AM Eastern (7:00 AM Pacific) to discuss the latest background screening trends facilitating risk management practices. For more information or to register for the webinar, visit: http://www.bankinfosecurity.com/webinars/risk-management-new-strategies-for-employee-screening-w-282. Continue reading

New EEOC Guidance on Criminal Background Checks Could Place Employers in Catch 22 Situation

The new U.S. Equal Employment Opportunity Commission (EEOC) Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 issued on April 25, 2012 could impose undeserved liability and risk on employers by placing them in an irreconcilable “Catch 22” situation where they will have to choose between conducting criminal background checks and risking liability for supposedly violating the EEOC’s Guidance or abandoning background checks and risking liability for criminal conduct by employees, according to a Legal Memorandum from The Heritage Foundation: “The Dangerous Impact of Barring Criminal Background Checks: Congress Needs to Overrule the EEOC’s New Employment ‘Guidelines.’” Continue reading

ACFE 2012 Report to the Nations Finds Fraud Costs Organizations Five Percent of Revenues Each Year

The 2012 Report to the Nations on Occupational Fraud and Abuse from the Association of Certified Fraud Examiners (ACFE) estimates that the typical organization loses five percent of its revenues to occupational fraud each year and that this figure translates to a potential projected global fraud loss of more than $3.5 trillion applied to the estimated 2011 Gross World Product. The study also found that the median loss caused by the occupational fraud cases was $140,000, and more than one-fifth of these cases caused losses of at least $1 million. The ACFE 2012 Report to the Nations is available at: http://www.acfe.com/RTTN/. Continue reading

EEOC Warns Employers of Increase in Discrimination Lawsuits Based on Background Checks

By Thomas Ahearn, ESR Staff Writer

As a recently filed lawsuit alleging one of the largest management consulting firms in the world conducted discriminatory background checks against African-Americans and Latinos shows, employers need to fully understand the U.S. Equal Employment Opportunity Commission (EEOC) policies regarding the use of background checks during the pre-employment screening process – or face the consequences in court.

Due to an increase in discrimination lawsuits such as this, the EEOC has decided to warn employers about background check practices that could get them in trouble. The agency designed a program to combat discriminatory practices tied to background checks called E-RACE (Eradicating Racism And Colorism from Employment) after recently noticing a steep climb in complaints from job applicants who claimed they were unfairly excluded from employment because of information – such as criminal records and poor credit ratings – that appeared on background checks. African-American and Hispanic males in particular, who according to statistics usually have higher arrest rates and lower credit scores than white males, were able to show the EEOC that the criteria used during background checks had a negative impact on their hiring opportunities.

The EEOC has defined two background check practices in particular that have caused – and will continue to cause – the largest legal risk for employers:

  • Blanket policies against hiring anyone with a criminal record or poor credit score.
  • Failing to show the correlation between background checks and the job itself.

According to the EEOC, even if the agency takes a discrimination charge that does not necessarily mean that the government is accusing an employer of discrimination. It is simply the EEOC’s job to investigate the matter to determine whether there is reasonable cause to believe that discrimination has occurred if applicants or workers charge that an employer has allegedly discriminated against them.

In addition, according to the “Employers” section of the EEOC website, the agency enforces Federal laws prohibiting employment discrimination that protect employees and job applicants against employment discrimination when it involves:

  • Unfair treatment because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information.
  • Harassment by managers, co-workers, or others in the workplace, because of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information.
  • Denial of a reasonable workplace accommodation that the employee needs because of religious beliefs or disability.
  • Retaliation because the employee complained about job discrimination, or assisted with a job discrimination investigation or lawsuit.

The EEOC and the courts do recognize that some information uncovered in background checks does provide insight on an applicant’s suitability in certain fields of employment. These instances could include jobs in which applicants would have close contact with customers, handle cash, drive vehicles, and deal with minors.  Employers need to show these correlations between background checks and the suitability for the given job, and also ensure that their background check process does not routinely, even if unknowingly, give preference to white applicants while excluding African-Americans and Hispanics.

For more information about EEOC policies regarding discrimination during background checks for employment, visit Employment Screening Resources (ESR), a national pre-employment screening firm providing background checks, at http://www.esrcheck.com.





Background Check Bashing -Either Too Much or Too Little Depending upon the Most Recent Headline

By Les Rosen, Employment Screening Resources

The recent headlines dealing with background checks demonstrate that to some extent, Americans are conflicted about the whole topic of background checks.

On one hand, as reported in past blogs by Employment Screening Resources (ESR), discrimination and privacy advocates feel that background checks are too intrusive and unfair. The EEOC has filed a test case alleging that a large national employer used credit report and criminal records to unfairly discriminate against members of protected groups. The state of Oregon and others are considering limitations on credit reports. Scientists from the Jet Propulsion Laboratory (JPL) in Southern California have succeeded in taking their complaints all the way to the United States Supreme Court that government mandated security checks revolving around background checks and entry into facilities are overly intrusive and an invasion of privacy. A recent study conducted at a major university suggested that after a relatively short period of time, criminal records are not a predictor of future misconduct.

Conversely, the recent tragic shootings at University of Alabama-Huntsville and Ohio State University have lead to many to question if background checks should be even more in-depth. Those shootings had horrific impacts on the victim’s families and the communities involved and questions have been raised if even more background checks should have been done.

In  the case of the Ohio State University workplace violence, a top notch and highly respected background screening firm performed what appeared to be a standard entry level criminal record search and found what any screening firm would likely have found, which was no record. However, critics note that a 30 year old conviction for receiving stolen property should have been unearthed, even though old records have been destroyed, and there was some confusion about the date of birth that should have been used.

Of course, to find a thirty year old prison record under those circumstances would normally require an employer to retain private investigators at the cost of many hundreds of dollars for each and every potential new hire, as opposed to public record background screenings. And ironically, even if the screening firm had located the 30 year old criminal record for a non-violent offense and was able to establish the record belonged to the shooter, any use of it would have been soundly criticized as unfair and discriminatory. It seems that employers cannot win either way.

As it turns out, in the Ohio State University case a past employment verifications may have raised the red flags that would have alerted the employer to take a closer look at the hiring decision. It underscores that employers need to use a number of overlapping tools to evaluate a potential hire, and that no one tool, such as a criminal background check, can be used to make hiring decisions. In addition, background checks are just one component of an overall workplace violence prevention strategy.

The bottom-line is that background screening occurs at the intersection of competing and compelling societal interests. On one hand, no one wants to see workplace violence, or to have unqualified people get jobs with fake credentials. Safety, security and honesty are core values. On the other hand, society is also rightly concerned with fairness and privacy and as well as efforts to combat discrimination. The issue is reaching the right balance.

It is interesting that nearly every time there is an objection because there is too much screening, there is often a call for even more screening after it is revealed that some crime or offenses occurred or where an inappropriate applicant was hired without a sufficient background check. With all due respects to the JPL scientists, one would assume their position may be different if it ever turned out that a failure to perform background checks resulted in a terrorist hurting the U.S., someone with fake credentials getting hired and obtaining access, or workplace violence occurring that could have been prevented.

For more information about background checks, visit Employment Screening Resources (ESR) at http://www.ESRcheck.com.

Off shoring IT jobs lead to dramatic increases in Data Breaches per survey

By Les Rosen, Employment Screening Resources

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 percent indicated their company had experienced a data breach.  The study noted data breaches occurred in just 35 percent 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.

Screening expands beyond new employees to vendors and others on premises

By Les Rosen, Employment Screening Resources

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 EIGHTH of the ten trends ESR will be tracking in 2010.)