Tag Archives: SHRM

Society for Human Resource Management Issues Statement on the Use of Criminal Background Checks

The Society for Human Resource Management (SHRM), the world’s largest association devoted to human resource management representing more than 250,000 members in 140 countries, has issued a statement on the use of criminal background checks in response to a new study by the National Employment Law Project (NELP) that recommends reforming criminal background checks used for employment screening of job applicants since roughly 65 million U.S. adults – more than one in four – have criminal records. Continue reading

Maryland Legislation Would Limit Credit Checks by Employers on Job Applicants

State lawmakers in Maryland have proposed legislation that would limit the ability of employers to run credit checks using credit reports and credit histories of employees and job applicants for employment purposes in response to complaints from job seekers in the state who said they were denied jobs after their would-be employers learned about their low credit scores, according to an article in The Baltimore Sun. Continue reading

Background Check Myths Exposed by Safe Hiring Expert at 2011 SHRM Employment Law and Legislative Conference

Attorney, author, and safe hiring expert Lester Rosen – founder and President of San Francisco, California-area a background check provider Employment Screening Resources (ESR) – exposed the leading myths associated with employment screening background checks to an audience this week at the 2011 Society for Human Resource Management (SHRM) Employment Law and Legislative Conference in Washington, D.C., according to a special report ‘Due Diligence Myths in Background Investigations’ on HR.BLR.com. Continue reading

Human Resources Advised to Stay Informed about Federal and State Laws Regulating Employment Screening

In an effort to keep Human Resources (HR) leaders and professionals informed about the latest legislative, compliance, and regulatory issues affecting how they conduct day-to-day business in their workplaces – including employment screening and safe hiring – the Society for Human Resource Management (SHRM) will hold the 2011 SHRM Employment Law and Legislative Conference from Monday, March 14, 2011 to Wednesday, March 16, 2011 at the Hyatt Washington in Washington D.C.. For more information about the conference, visit: http://www.shrm.org/Conferences/EmploymentLawLegislativeConference/Pages/default.aspx. Continue reading

EEOC Examines Practice of Employers Excluding Unemployed Job Applicants from Job Vacancies

The U.S. Equal Employment Opportunity Commission (EEOC) held a public meeting on Wednesday, February 16, 2011 to examine the practice by employers of considering only those currently employed for job vacancies and excluding currently unemployed persons from job applicant pools, including in job announcements, and also to hear from invited panelists on the potential impact on job seekers, according to an EEOC press release titled ‘Out of Work? Out of Luck.’ Continue reading

Survey Reveals More than Half of Consumers Want to Ban Credit Report Checks by Employers

More than half of consumers approve of the idea of banning the use of job applicant credit reports by employers for employment screening, according to a recent survey.

A telephone poll survey conducted for Credit.com by GfK Custom Research North America from January 14, 2011 to January 16, 2011 interviewed 1,004 consumers about:

Employers have the right, with your permission, to check your credit report as part of background screening for employment. A number of lawmakers are interested in banning this practice – do you… Continue reading

Use of Credit Reports and Criminal Records for Employment Screening comes under Scrutiny

By Thomas Ahearn, Employment Screening Resources (ESR) News Editor

An article in the February 2011 issue of the Society for Human Resource Management’s (SHRM) HR Magazine‘Close Up On Screening’ – describes how employers are scrambling to adjust to changes in the myriad of state and federal laws that govern pre-employment background screening due to increased scrutiny by legislators and policy enforcers on the use of credit reports and criminal records in hiring decisions.

For examples, Illinois recently became the fourth state — after Hawaii, Oregon, and Washington — to restrict the use of credit histories in hiring decisions, while Massachusetts became the second state, in addition to Hawaii, to prohibit private employers from asking about criminal records of job applicants on initial written job applications.

However, contrary to public opinion, a 2010 survey from SHRM – ‘Conducting Credit Background Checks’ – showed credit histories were used sparingly and wisely in hiring decisions.

“The perception that employers are ordering massive amounts of credit reports is nothing like the truth,” said Lester Rosen, President of San Francisco-area background check provider Employment Screening Resources (ESR), who was quoted in the HR Magazine article.

According to the SHRM survey on credit background checks, when respondents were asked if their organization or an agency hired by their organization conducted credit background checks for any job candidates by reviewing their credit reports:

  • 47 percent responded they performed credit background checks on selected job candidates.
  • 40 percent responded they did not perform credit background checks on any job candidates.
  • 13 percent responded they performed credit background checks on all job candidates.

Regarding which categories of job candidates that organizations conducted credit background checks on, the SHRM survey revealed that 91 percent of “job candidates for positions with fiduciary and financial responsibility” underwent credit background checks.

As for restrictions on criminal records, the SHRM article indicates at least two dozen cities and counties and five states have narrowed questions on their job applications to cover only felony convictions or have stopped asking about criminal history entirely and have “banned the box,” a reference to removing the boxes on applications that job applicants must check if they have even been convicted of a crime. 

“With ‘ban the box’, applicants can be considered without pre-judging,” said Rosen, the author of ‘The Safe Hiring Manual – The Complete Guide to Keeping Criminals, Terrorists, and Imposters Out of Your Workplace,’ a comprehensive guide to background checks. “From a government point of view, it makes sense to get people back to work and to avoid the extra costs of social services. Private employers prefer to ask upfront.”

Furthermore, while employers conduct criminal background checks to guarantee safety in the workplace and to avoid negligent hiring lawsuits, they may attract attention from the U.S. Equal Employment Opportunity Commission (EEOC) if they are not careful in doing so. The article noted that while procedural consistency is important throughout an organization, criteria consistency is important within job groups.

“Not all janitors are background screened the way you screen accountants, but janitors should be screened consistently with janitors,” Rosen explained in the article. “Employers get in trouble when they engage in automated decision-making. There always should be a human review to make sure you’re making the right decision.”

Rosen added that while many employers know the Fair Credit Reporting Act (FCRA) contains procedures for conducting credit background checks, some are unaware the FCRA also covers criminal background checks and offers specific “adverse action” procedures an employer must follow if a background check results in a denial of employment for a job applicant.

As a result, many employers are turning to an outsourced background screening and safe hiring partner to establish protocols and consistent practices while also helping to eliminate inappropriate use of screening results.

“A good background-screening partner makes sure the employer is in compliance with the act and other laws, abides by adverse action rules, conducts consistent checks within job groups, and follows EEOC guidelines for using criminal reports,” Rosen said.

To learn more about background checks, visit the Employment Screening Resources (ESR) website at http://www.ESRcheck.com and read more about ‘credit reports’ and ‘criminal records’ on the ESR News Blog

Founded in 1996 in the San Francisco area, Employment Screening Resources (ESR) wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen and is accredited by The National Association of Professional Background Screeners (NAPBS®) . To learn more about Employment Screening Resources, visit http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations, at 415.898.0044 or jcallahan@ESRcheck.com.


Bill Limiting Credit Checks of Job Applicants for Employment Screening Reintroduced in Congress

A bill that would limit the use of credit checks of job applicants in employment screening has been reintroduced into Congress by U.S. Rep. Steve Cohen (D-TN).

As originally written, the ‘Equal Employment for All Act’ would amend the Fair Credit Reporting Act (FCRA) to prohibit the use of consumer credit checks against prospective employees and existing employees as a means of making adverse employment decisions, with an exception for employers seeking applicants in national security or positions with major financial responsibilities.

Congressman Cohen – who wrote the same bill in the last Congress but it was never voted on – noted in a news report that the recession has led some job applicants into debt and credit checks can keep them unemployed. He also noted the Equal Employment Opportunity Commission (EEOC) has suggested such use of credit checks may affect women and minorities disproportionately.

A 2010 survey from the Society for Human Resource Management (SHRM) on the use of credit reports for employment screening revealed that:

  • 13 percent of employers surveyed conducted credit checks on all job candidates.
  • 40 percent of employers did not conduct any credit checks on job candidates.
  • 47 percent of employers considered credit checks for candidates of selected jobs.
  • 60 percent of employers overall ran credit checks on at least some applicants.

Credit checks for employment purposes have become a very controversial subject. Job applicants looking for work in a tough economy are caught in a classic “Catch-22” situation where they have bad credit because they cannot get a job but cannot get a job because they have bad credit.

Employment Screening Resources (ESR), a leading provider of background checks accredited by the National Association of Professional Background Screeners (NAPBS), believes credit checks are just one of many factors – including education, experience, references, and past criminal history – that employers use to find qualified job applicants, employers should approach with caution when using them for employment screening, and articulate a clear rationale as to why a credit check is related to a particular job. Employers should also be aware of the potential for errors in credit reports.

The question of whether use of credit checks in employment screening is discriminatory is so controversial that the use of credit reports for employment screening is the number one background screening trend for 2011 as chosen by Employment Screening Resources founder and President Lester Rosen. For a list of all trends in ESR’s ‘Top Ten Trends in Employment Screening’ for 2011, visit: http://www.esrcheck.com/Top-Ten-Trends-In-Background-Screening-2011.php.

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

Founded in 1996 in the San Francisco area, Employment Screening Resources (ESR) wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen and is accredited by The National Association of Professional Background Screeners (NAPBS®) . To learn more about Employment Screening Resources, visit http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations, at 415.898.0044 or jcallahan@ESRcheck.com.


Background Check Industry Has Changed Much in Years from 2000 to 2010

By Thomas Ahearn, ESR News Editor

With the end of the year 2010 now upon us, the time seems right to look back at how much the background check industry has changed since the year 2000. In slightly over a decade, background checks have gone from a luxury to a necessity, from a primarily  government run endeavor to a substantial private sector business with a large number of firms providing service, and from a mostly expensive time and labor consuming task to, in some cases, a totally automated paperless solution.

Due in large part to the shocking terrorist attacks that unfolded on September 11, 2001 and led to increased security on all fronts in the United States, the background check industry has increasingly helped employers keep criminals, terrorists, and imposters out of their workplaces. Other factors behind the increased use of background checks include well publicized incidents of workplace violence, multi-million dollar negligent hiring verdicts, a sharp rise in cases of resume fraud including some well publicized examples of fake degrees, and a national awareness of the dangers to children and other vulnerable groups when unqualified or dangerous persons are allowed access to them.

Below are comparisons of background checks in 2000 and 2010 in six critical areas that have changed in the industry:

1. Number of employers performing background checks:

2. Industry standards for background checks:

Many changes have occurred with respect to background screening industry standards in the years between 2000 and 2010.

  • 2000: There is no national trade association, industry standards, or definitive publications on background screening. Steve Brownstein, Publisher of the Background Investigator, holds the first ever background check industry conferences in Long Beach, California and then larger events in Tampa, Florida. Employment Screening Resources (ESR) founder and President Lester Rosen is the keynote speaker at these first industry conferences.
  • 2003: As a result of the Tampa conferences, momentum builds for a professional trade association for the background screening industry. ESR President Lester Rosen serves as the chairperson of the steering committee that founded the National Association of Professional Background Screeners (NAPBS®), a non-profit trade association representing the interests of background check companies, and serves as the first co-chair. NAPBS seeks to “…promote ethical business practices, promote compliance with the Fair Credit Reporting Act and foster awareness of issues related to consumer protection and privacy rights within the background screening industry. The Association provides relevant programs and training aimed at empowering members to better serve clients and to maintain standards of excellence in the background screening industry.”
  • 2004: ‘The Safe Hiring Manual – The Complete Guide to Keeping Criminals, Terrorists, and Imposters Out of Your Workplace’ by ESR President Lester Rosen is published, the first comprehensive book on employment screening.
  • 2010: NAPBS launches the Background Screening Agency Accreditation Program (BSAAP) for a singular background check industry standard representing a background check company’s commitment to excellence, accountability, and professionalism. The Background Screening Credentialing Council (BSCC) is the governing accreditation body that ensures background check organizations seeking accreditation meet or exceed a measurable standard of competence. To become accredited, a background check company must pass a rigorous audit of its policies and procedures as they relate to six critical areas of the BSAAP: Consumer Protection, Legal Compliance, Client Education, Product Standards, Service Standards, and General Business Practices.

3. Sources for background check information:

  • 2000: Background check information is mostly limited to traditional sources such as criminal records, driving records, verifications, and reference checks.
  • 2010: With the advent of new technology like the Internet in general – and new media such as blogs, videos on YouTube, and social networking sites like Facebook in particular – there are many more potential outlets from which employers may gather information about job applicants.

4. The need for international background checks:

  • 2000: Before the rise of outsourcing, much of the workforce is perceived to have lived, worked, and been educated inside of the United States, so the idea of international background checks for job applicants seems expensive and unnecessary to most companies. There are also limited resources available for such background checks.
  • 2010: According to recent U.S. government statistics, there are 38.5 million foreign-born U.S. residents representing 12.5 percent of the population, more than 1.1 million persons became Legal Permanent Residents (LPRs) of the United States in 2009, and the unauthorized immigrant population living in the U.S. reached an estimated 10.8 million in January 2009 and grew 27 percent between 2000 and 2009. Given these facts, U.S. companies must be prepared to perform international background checks on job applicants with global backgrounds. Numerous resources are now available for background screening firms to conduct international background checks, as well as resources concerning international privacy and data protection.

5. Compliance issues concerning background checks:

  • 2000: Background check companies must comply with the federal Fair Credit Reporting Act (FCRA), originally passed in 1970, that regulates the collection, dissemination, and use of consumer information and is enforced by the Federal Trade Commission (FTC).
  • 2010: Background screening has become an intensely legally regulated endeavor. Background check companies must comply with a myriad of industry regulations in addition to FCRA requirements such as the Fair And Accurate Credit Transaction Act (FACT Act) of 2003 (which amended the FCRA), Sarbanes-Oxley, the Patriot Act, E-Verify employment eligibility verification, Equal Employment Opportunity Commission (EEOC) discrimination issues against protected classes pertaining to the use of criminal records and credit reports for employment purposes, and new consumer data privacy protections regulations such as “Safe Harbor” and privacy laws that protect the Personally Identifiable Information (PII) of consumers. Another source of intense legal regulations are state laws regulating credit reports and criminal records. California, for example, completely revamped its background screening laws in 2002 and added new requirements in 2010 when PII is sent offshore beyond the protection of U.S. privacy laws. Many states have their own version of the FCRA. 

6. Technology used in background screening:

  • 2000: Most employers are required to fax orders to a background check firm. The idea of entering orders into an online system or making information available online is only in the beginning stages.
  • 2010: Technology in the background check industry has increased substantially, with the use of online processes to not only enter orders but to have paperless systems with electronic signatures and integration into Applicant Tracking Systems (ATS) so background checks can be ordered with the click of a mouse. With the advent of Web 2.0, employers may expect to see more advances in the technology for the background screening process. The downside, however, is that Internet entrepreneurs have seized upon background checks as a way to make quick money and in some instances are playing off the fears of Americans by offering cheap and instant checks that are based upon databases never intended to be a substitute for a background check. 

Much has changed in the background check industry in the years spanning 2000 to 2010.  Employment Screening Resources (ESR) – founded in 1996 in the San Francisco area – has kept pace with advancements in the many changes regarding background screening. ESR is recognized as:

  • An accredited background screening firm by the NAPBS,
  • The company that wrote the book on background checks with ‘The Safe Hiring Manual’ by founder Lester Rosen,
  • The third U.S. background check firm to be ‘Safe Harbor’ Certified for data privacy protection, and
  • One of the first background check firms to introduce an online system to place orders, view status of orders, and retrieve reports.   

To learn more about Employment Screening Resources in 2011, visit the ESR web site at http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations, at 415.898.0044 or jcallahan@ESRcheck.com.

Happy New Year from Employment Screening Resources!

Background Check Expert Lester Rosen Comments on Evolving Background Check Industry in HR Magazine Article

By Thomas Ahearn, Employment Screening Resources (ESR) News Editor

According to background check expert Lester Rosen, while the background check industry is still fragmented, he notes in an article about pre-employment background checks in HR Magazine that some consolidation has occurred and that he expects consolidation in the industry to continue with two background check firm models evolving: large data-driven industries and smaller boutique-style firms emphasizing education and consultation.

Rosen – founder of Employment Screening Resources (ESR) and author of ‘The Safe Hiring Manual – The Complete Guide to Keeping Criminals, Terrorists, and Imposters Out of Your Workplace’ – was quoted in an article “Backgrounds to the Foreground” in the December 2010 issue of HR magazine, a publication from the Society for Human Resources Management (SHRM), saying two background check models have evolved.

“Investment banking firms buying and consolidating big companies is a new trend. Larger financial interests are involved at the same time we still have medium-size or boutique firms,” Rosen, an Attorney at Law, says in the story, adding that two models for background check firms have evolved: “A large data-driven industry with assembly-line-like practices and a boutique approach with emphasis on education and consultation.”

The author of the article, Bill Roberts, a contributing editor for HR Magazine, writes that the stakes have never been higher when it comes to choosing a background check firm to protect a business and its reputation due to legal challenges and security concerns. While juries still punish employers for inadequate background checks – one jury mentioned in the article awarded over $20 million in a negligent hiring case – the U.S. Equal Employment Opportunity Commission (EEOC) has increased enforcement against overuse of background checks that the agency claims violate federal law.

To help employers choose a background check partner, the article notes that the National Association of Professional Background Screeners (NAPBS) launched an accreditation program in March 2010 to apply best practices for consumer protection, legal compliance, and client education, and standards for court researchers, data, and verification, to its members. The NAPBS accredited companies were announced before year-end of 2010.

The article also reveals that while some vendors have ISO certification from the International Organization for Standardization, the ISO only designates that formal business processes are applied and that the ISO is not specific to background checks and does not guarantee quality of products or services like the NAPBS accreditation.

The HR Magazine article “Backgrounds to the Foreground” is currently available only to SHRM members at: http://www.shrm.org/Publications/hrmagazine/EditorialContent/2010/1210/Pages/1210roberts.aspx.

Founded in 1996 in the San Francisco Bay area, Employment Screening Resources (ESR) is the company that wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen. Employment Screening Resources is accredited by The National Association of Professional Background Screeners (NAPBS®) Background Screening Credentialing Council (BSCC) for proving compliance with the Background Screening Agency Accreditation Program (BSAAP). For more information about Employment Screening Resources, visit http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations and Business Development, at 415.898.0044 or jcallahan@ESRcheck.com.