Tag Archives: State laws

California Employers Warned to Use Caution When Dealing with Laws Regulating Pre-Employment Screening

To avoid bad hiring decisions, employers have increasingly turned to pre-employment background screening as a risk management tool. However, no employment screening program can be conducted by employers without a full understanding of a number of laws including the Fair Credit Reporting Act (FCRA), discrimination and privacy laws, and the Americans with Disabilities Act (ADA). The challenge is even greater for California employers who must use caution when dealing with additional rules regulating employment screening. 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

Court Rules Staffing Firm that Outsources Background Checks Cannot be Sued Under FCRA

By Lester Rosen, Attorney and President of Employment Screening Resources (ESR)

A staffing firm that places individuals in temporary positions with independent employers cannot be sued under the federal Fair Credit Reporting Act (FCRA) when a background check firm hired by the staffing firm delivers a background check report that is inaccurate or erroneous. 

In a case from the United States District Court for the Eastern District of Tennessee, a staffing firm retained an employment screening firm to provide a background check report. The background check report indicated that the plaintiff had been convicted of a felony and misdemeanor, had served jail item, was serving probation, and had made restitution for theft and assault. Continue reading

Colorado Bill Would Severely Limit Use of Credit Reports in Employment Screening

A proposed Colorado law would restrict the use of credit reports of job applicants by employers to certain situations, and make employers that use the information adversely indicate what information they relied upon in the credit report to make their decision. Continue reading

Court Finds No Liability Though Background Check Report Inaccurate since Employer Already Decided Not to Hire Applicant

In a case that touched upon number of issues affecting background checks, a federal district court held that even though a background check report was erroneous and inaccurate, it had no bearing on the employment decision since a hospital had already decided to not hire a candidate based upon their prior knowledge of misconduct and a bad interview. Continue reading

Government Accountability Office Report Finds Sex Offenders Employed at K-12 Schools

By Lester Rosen, Employment Screening Resources (ESR) President & Thomas Ahearn, ESR News Editor

The United States Government Accountability Office (GAO) recently released a report to the Chairman, Committee on Education and Labor, House of Representatives that revealed high rates of employees in all sorts of positions at both public and private schools – including teachers, volunteers, aides, support staff, and contractors – who had records of inappropriate sexual conduct and convictions for sex-related crimes.

The GAO report dated December 2010 – ‘K-12 EDUCATION – Selected Cases of Public and Private Schools That Hired or Retained Individuals with Histories of Sexual Misconduct’ – examined 15 cases that showed that individuals with histories of sexual misconduct were hired or retained by public and private schools as teachers, support staff, volunteers, and contractors. At least 11 of these 15 cases involved sex offenders who previously targeted children, and at least 6 cases involved offenders who used their new positions as school employees or volunteers to abuse more children.

The GAO report revealed that the following factors contributed to hiring or retention of sex offenders:

  • School officials allowed teachers who had engaged in sexual misconduct toward students to resign rather than face disciplinary action, often providing subsequent employers with positive references;
  • Schools did not perform pre-employment criminal history checks;
  • Even if schools did perform pre-employment criminal history checks, they may have been inadequate in that they were not national, fingerprint-based, or recurring; and
  • Schools failed to inquire into troubling information regarding criminal histories on employment applications.

Some examples of cases from around the United States that the GAO examined for the report include:

  • Ohio: A teacher forced to resign because of inappropriate conduct with female students received a letter of recommendation from the school superintendent calling him an “outstanding teacher.” After being subsequently hired at a neighboring district, he was convicted for sexual battery against a sixth grade girl.
  • Louisiana: A teacher and registered sex offender whose Texas teaching certificate had been revoked was hired by several Louisiana schools without receiving a criminal history check. A warrant is currently out for his arrest on charges of engaging in sexual conversations with a student at one of these schools.
  • Arizona: A school rushing to fill a position did not conduct a criminal history check before hiring a teacher who had been convicted for sexually abusing a minor, even though he disclosed on his application that he had committed a dangerous crime against a child. He was later convicted for having sexual contact with a young female student.
  • California: A sex offender was convicted for molesting a minor in 2000 and the school where he worked was aware of his conviction but did not fire him. After the GAO referred the case to the California Attorney General, officials placed the sex offender, who has since resigned, on administrative leave.

The GAO report also found no federal laws regulating the employment of sex offenders in public or private schools and varying laws at the state level. While some states required a national, fingerprint-based criminal history checks for school employment, others states did not. State laws also varied as to whether past convictions would result in termination from school employment, revocation of a teaching license, or refusal to hire.

GAO performed the study after a 2004 Department of Education report estimated that millions of students are subjected to sexual misconduct by a school employee at some time between kindergarten and the twelfth grade (K-12). GAO was asked to:

  • Examine the circumstances surrounding cases where K-12 schools hired or retained individuals with histories of sexual misconduct and determine the factors contributing to such employment actions and
  • Provide an overview of selected federal and state laws related to the employment of convicted sex offenders in K-12 schools.

To identify case studies, the GAO compared recent data in employment databases from 19 states and the District of Columbia to the National Sex Offender Registry and also searched public records to identify cases where sexual misconduct by school employees resulted in a criminal conviction. GAO ultimately selected 15 cases from 11 states for further investigation.

Employment Screening Resources (ESR) – a leading background check provider accredited by The National Association of Professional Background Screeners (NAPBS) performs sexual offender searches as well as criminal record searches around the United States supplemented by a national multi-jurisdictional search. Although no one search is perfect, ESR recommends a series of overlapping tools that must also include checking professional licenses and verifying past employment, especially looking for unexplained gaps in employment where an offender may try to hide past negative information.

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


Kentucky Bill Would Require Criminal Background Checks for All Private Nursing Home Employees

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

Proposed legislation in the state of Kentucky would require criminal background checks for all private long-term care facility employees to help to protect elderly and vulnerable Kentucky nursing home residents from being preyed upon by dangerous criminals.

Senate Bill 44 – introduced by Senator Tom Buford (R-Jessamine) – would prohibit any Kentucky long-term care facility, nursing home, or an assisted living community from employing a person who had been convicted of a felony related to:

  • Theft;
  • Abuse or sale of illegal drugs;
  • Abuse, neglect, or exploitation of an adult; or 
  • A sexual crime.

Current Kentucky law requires criminal background checks for all employees at state-run facilities, but only requires criminal background checks for those employees who provide direct care to residents at privately run nursing homes and assisted-living facilities. S.B. 44 – which is currently under review by the Senate Judiciary Committee – would extend the criminal background checks to all employees at private nursing homes and assisted-living facilities.

As reported previously on ESR News, many states are penalizing nursing homes that employ workers with serious criminal records. Recently, an Indiana an operator of nursing homes was hit with $376,000 in penalties for employing individuals at nursing homes who either had been convicted of criminal offenses or stripped of their licenses.

To assist nursing homes and other long-term care facilities conduct safe hiring programs, Employment Screening Resources (ESR) – a leading provider of background checks accredited by The National Association of Professional Background Screeners (NAPBS) – offers a OIG/GSA Name Search which searches the OIG (Office of the Inspector General) Excluded List and GSA (General Services Administration) Sanctions Report for individuals and businesses excluded or sanctioned from participating in Medicare, Medicaid, and other Federally funded programs.

Employment Screening Resources ESR Home Health Care Check provides background screening services specializing in home health care workers in private homes or elder care facitlites. For more information, visit http://www.esrcheck.com/services/homehealthcare.php.

For more information on background checks, visit Employment Screening Resources 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.




Controversy over Whether Employers Using Credit Reports for Employment Screening is Discriminatory Increases

By Lester Rosen, Employment Screening Resources (ESR) President & Thomas Ahearn, ESR News Editor

A great deal of misinformation about the basics of credit reports, background checks, and job hunting exists in the current economic climate. Most employers are not using credit reports to find ways to eliminate people from jobs. A background check that includes a credit report is usually run only after an employer has gone through the time, cost, and effort to find the right candidate. Employers initiate background checks because they are interested in hiring the applicant and are conducting due diligence to make sure there is no reason not to hire. Under the rules of the federal Fair Credit Reporting Act (FCRA), a credit report is only obtained after the applicant has given consent and after a legally required disclosure has been given. If the employer utilizes the credit report in any way not to hire, applicants are entitled to a copy of their credit report, a pre-adverse action notice, as well as a statement of their rights. Before any employment decision becomes final, applicants also have the right to challenge the credit report before any denial of employment is made final.

However, employers should approach credit reports with caution when using them for employment background checks, and must articulate a clear rationale as to why a credit report is related to a particular job. Employers should also be aware of the potential for errors in credit reports. A debt may be reported incorrectly for various reasons or the applicant could be the victim of identify theft which can also lead to incorrect data. In addition, negative entries may well not be a valid predictor of job performance especially since many job applicants have faced a long period of unemployment that may lead to larger debts.  An overly broad use of credit reports by employers could lead to claims of discrimination from a disparate impact on protected groups such as Blacks and Latinos.

The idea that credit reports can be used in a discriminatory manner in the eyes of the U.S. Equal Employment Opportunity Commission (EEOC) means employers will continue to face controversy with discrimination over using credit reports for employment screening.

This is Trend #1 in Employment Screening Resources (ESR) Fourth Annual ‘Top Ten Trends in Background Screening’ for 2011.

Credit checks for employment purposes have become a very controversial subject. Job applicants look for work in a tough economy are caught in a “Catch-22” situation where they have bad credit because they cannot get a job but cannot get a job because they have bad credit. As a result, the EEOC held a public Commission meeting in October 2010 to hear testimony on the growing use of credit histories of job applicants as selection criteria during employment background screening to see if the practice is discriminatory. At that meeting, a representative of the Society for Human Resource Management (SHRM) told the EEOC that the federal government should not eliminate an employer’s use of credit histories to help make decisions about job candidates since credit history is just one of many factors – including education, experience, references, and past criminal history – that employers use to narrow the job applicant pool to the most qualified. Data from a 2010 SHRM survey 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 history for candidates of selected jobs.
  • 91 percent of employers that conducted credit checks did so for jobs of financial or fiduciary responsibility such as handling cash, banking, and accounting.

Overall, SHRM found that 60 percent of employers ran a credit check on at least some applicants, an increase from the 42 percent in 2006 and 25 percent in 1998. The EEOC heard public comment from SHRM and others to determine the extent of the practice of using credit checks during the background screening of job candidates, the effectiveness of its intended purpose, and its potential impact on different populations. The EEOC works to ensure all U.S. workplaces are made free of all barriers to equal opportunity. For more information, visit http://www.eeoc.gov/eeoc/meetings/10-20-10/index.cfm.

For employers, hiring an applicant that will handle money or assets, make fiduciary decisions, or has access to private data without running a credit report could result in allegations of negligent hiring if embezzlement or identity theft occurs and a credit report as part of a background check would have lead to relevant information. It is an urban myth that employers receive credit scores of the applicant. Employment credit reports are much different than credit reports used for lending and do not contain a credit score since there is no evidence of a connection between credit scores and successful employment. 

In addition to the federal regulations of the FCRA and EEOC, some states are considering passing, or have passed, legislation to restrict the use of credit reports for employment purposes. For example, effective January 3, 2011, the State of Illinois restricts employers from using credit reports for employment purposes. Under Illinois House Bill 4658 ‘The Employee Credit Privacy Act,’ employers in Illinois may not use a person’s credit history to determine employment, recruiting, discharge, or compensation. As reported on ESR News, other examples of stories about limiting the use of credit reports for employment purposes include:

Employers argue that credit checks during employment screening are done responsibly, and are not barriers to employment. They may check credit history during background checks to help them determine whether a prospective employee is a possible risk to the financial health of a business or to its customers. Prohibiting credit checks in screening makes employers, other employees, and customers vulnerable to fraud and identity theft.

Unfortunately, personal financial health can be an indictor of potential employee fraud. The Association of Certified Fraud Examiners (ACFE) reviewed occupational fraud between 2006 and 2008, and found that the top two “red flag” warnings exhibited by perpetrators of fraud leading up to the crime were instances of living beyond their financial means (39 percent of cases) or experiencing financial difficulties (34 percent of cases). To learn more, visit http://www.acfe.com/occupational-fraud/occupational-fraud.asp.

While it is wrong to say all financial difficulties lead to fraud, some employers believe it is also wrong to undercut fraud prevention by outlawing the use of credit report information that may show a correlation between past behavior and future fraud. Credit checks of potential employees protect companies – particularly small businesses – from fraud. According to ACFE, the median loss suffered by organizations with fewer than 100 employees was $190,000 per incident, higher than median losses in large organizations. Overall, employee theft accounted for over $15 billion in losses annually, with companies losing a median of 5 percent of their annual revenue to employee fraud.

Because many myths surround credit reports and employment and to get to the bottom of how credit reports are really being used, Lester Rosen, founder and President of Employment Screening Resources (ESR), recently commented about credit reports of job applicants being used for employment purposes in a San Francisco area blog:

  • Employers don’t randomly access credit reports from all job applicants. They only do so for those who are solid candidates.
  • If they are pulling a credit report, congratulations! They are doing a background check, and that is good news, as they are seriously considering the applicant for the position. They won’t run it before the applicant is a finalist.
  • Credit reports aren’t checked for all occupations or industries. Most employers are looking at credit reports for people applying for positions that are clearly related to finance or have access to cash or credit. They usually don’t access credit reports for people applying for minimum wage jobs.
  • The only way an employer can pull an applicant’s credit report is with the applicant’s permission. Therefore, if the employer asks, the applicant should head over to the human resources department and explain his or her particular situation.
  • A potential boss does not have access to the same type of reports that lenders do. The credit reports employers can see never include credit scores or list dates of birth. All they can view is an applicant’s credit history.
  • If applicants are concerned about how these credit report pulls may harm their credit report further, they can relax. Unlike when a prospective creditor checks it, no “inquiry” will be listed.

As for the real impact of a job applicant’s credit damage, Rosen recommends in the blog that they should not worry about even that too much. “Our experience is that employers are very sensitive to the fact that credit reports are not perfect. And everyone in the world knows there is a recession, and employers take that into consideration,” says Rosen. “It’s a misconception that people are being blacklisted because of their credit reports. However, if the employer does make an adverse decision based on your report, you have a right to know about it and get a copy of the report they used.”

Another article quoted Rosen as saying employers are “looking at the debt level compared to the potential income from the job” and added that “if someone is under water financially as shown by the credit report, the thought is perhaps there could be a motive to embezzle or steal.” However, while Rosen says credit checks are one method employers may use to hire honest and trustworthy employees that also provide some legal cover if that employee turns out to be dishonest, he does not encourage routine credit checks on all candidates since credit checks often contain errors and can feel like an invasion of privacy to applicants. Rosen’s advice for employers is to limit credit checks to relevant positions such as those that involve money. In fact, with many states recently passing laws limiting the use of credit checks for employment purposes, employers need to be careful when, to whom, and how they perform credit checks on prospective job applicants.

However, job applicants and the EEOC are taking matters into their own hands regarding use of credit reports during background checks. Workplace discrimination charge filings with the federal agency nationwide rose to an unprecedented level of 99,922 during fiscal year 2010, according to an EEOC press release. In response to seeing an increase in claims of discrimination based upon criminal records and credit reports, the EEOC began the E-RACE (Eradicating Racism And Colorism from Employment) Initiative. Most recently, the EEOC filed a nationwide hiring discrimination lawsuit against a nationwide provider of postsecondary education charging the company engaged in a pattern of unlawful discrimination by refusing to hire a class of black job applicants nationwide by rejecting them based on their credit history, a practice that has an unlawful discriminatory impact because of race and is neither job-related nor justified by business necessity. As a result of these practices, the company has violated Title VII of the Civil Rights Act of 1964. To read the EEOC press release, visit http://eeoc.gov/eeoc/newsroom/release/12-21-10a.cfm.

Another federal agency, the Federal Trade Commission (FTC), issued a notice in May 2010 explaining ‘Credit Reports and Employment Background Checks’ to consumers who have applied for jobs. To see the FTC notice, visit http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre36.pdf. The FTC enforces the Fair Credit Reporting Act (FCRA), a law that protects the privacy and accuracy of the information in a credit report. The FCRA also spells out the rights of job applicants and the responsibilities of employers when using credit reports and other background check information to assess an application for employment. The FTC warns that there are legal consequences for employers who don’t comply with the FCRA if they:

  • Fail to get an applicant’s okay before getting a copy of their credit report or background check report;
  • Fail to provide the appropriate disclosures in a timely way; or
  • Fail to provide adverse action notices to unsuccessful job applicants.

To help both employers and job applicants better understand use of credit reports during background checks Rosen has written articles on using credit reports during background checks:

Employment Screening Resources (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 for credit reports available at: http://www.napbs.com/files/public/Consumer_Education/Credit_Reports_for_Background_Screening.pdf

ESR also provides information – at no charge – to job applicants on background checks and credit check reports can help job applicants navigate the background check process and maximize their chance at employment. The information is available on the ESR ‘Applicant Resources’ page at: http://www.esrcheck.com/Applicant-Resources.php.

Whether the use of credit checks for employment purposes is discriminatory to certain job applicants – which ESR also named Trend #1 in its Third Annual Top Ten Trends in the Background Screening Industry for 2010 – is a question that will be asked as long as employers run credit checks on job applicants with money troubles. For more information about the use of credit reports during background checks, please visit http://www.esrcheck.com/wordpress/tag/credit-reports/.

To read an extended article – Is It Discriminatory For Employers To Use Credit Reports for Employment Screening? – on the subject, visit http://www.esrcheck.com/articles/Is-It-Discriminatory-for-Employers-to-Use-Credit-Reports-for-Employment-Screening.php.

Employment Screening Resources (ESR) is releasing the ESR Fourth Annual ‘Top Ten Trends in Pre-Employment Background Screening’ for 2011 throughout December. This is the First of the Top Ten Trends ESR will be tracking in 2011. To see an updated list of ESR’s ‘Top Ten Trends in Pre-Employment Background Screening’ for 2011, visit: http://www.esrcheck.com/Top-Ten-Trends-In-Background-Screening-2011.php.

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). ESR was the third U.S. background check firm to be ‘Safe Harbor’ Certified for data privacy protection. To learn more about ESR’s Leadership, Resources, and Solutions, visit http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations, at 415.898.0044 or jcallahan@ESRcheck.com.

Florida Governor Signs Executive Order Requiring State Agencies to Use E-Verify

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

Shortly after being sworn-in, new Florida Governor Rick Scott signed Executive Order No. 11-02 (Verification of Employment Status) that requires state agencies to use the E-verify system to verify legal immigration status of workers and check whether all current and prospective agency employees are legally authorized to work in the United States.

E-Verify is a free, web-based system operated by the U.S. government that enables employers to electronically verify the employment eligibility of employees by comparing data on the Employment Eligibility Verification Form I-9 against records in Department of Homeland Security (DHS) and Social Security Administration (SSA) databases.

As explained in the following excerpt from the executive order signed by the Governor, Executive Order No. 11-02 requires state agencies to use the E-Verify system to verify employment eligibility of state employees and contractors:

  • All agencies under the direction of the Governor to verify the employment eligibility of all current and prospective agency employees through the U.S. Department of Homeland Security’s E-Verify system;
  • All agencies under the direction of the Governor to include, as a condition of all state contracts, an express requirement that contractors utilize the U.S. Department of Homeland Security’s E-Verify system to verify the employment eligibility of: a.) all persons employed during the contract term by the contractor to perform employment duties within Florida; and b.) All persons (including subcontractors) assigned by the contractor to perform work pursuant to the contract with the state agency.
  • Agencies not under the direction of the Governor are encouraged to verify the employment eligibility of their current and prospective employees utilizing the E-Verify system, and to require contractors to utilize the E-Verify system to verify the employment eligibility of their employees and subcontractors.

However, as a sign that E-Verify is still not without controversy, Rhode Island’s new Governor Lincoln Chafee signed an Executive Order (also No. 11-02) ‘Terminating Illegal Immigration Control Order’ on his first day in office to rescind a previous order requiring the state and businesses to check the immigration backgrounds of workers using the electronic program E-Verify.

Florida employers that are contractors with state agencies should expect that Florida state agencies will soon take steps to:

  • Amend existing contracts to include the new E-Verify requirement, and
  • Ensure that the E-Verify requirement is part of future contracts.

Florida employers should investigate enrolling in E-Verify to ensure all employees with responsibility for Form I-9 maintenance and E-Verify administration undergo thorough training in Form I-9 and E-Verify compliance. Florida employers may also choose to have a Designated E-Verify Employer Agent help them maintain Form I-9 and E-Verify compliance.

Employment Screening Resources (ESR) – a leading provider of background checks accredited by National Association of Professional Background Screeners (NAPBS) – is a Designated E-Verify Employer Agent and can help employers virtually eliminate Form I-9 errors, improve the accuracy of their reporting, protect jobs for authorized workers, and help maintain a legal workforce.

For more information about E-Verify, visit http://www.esrcheck.com/formi9.php, read ESR News Blog posts tagged ‘E-verify’ at http://www.esrcheck.com/wordpress/tag/e-verify/, and see the E-Verify State Legislation Map is available on the ESR website at http://www.esrcheck.com/State-E-Verify-map.php.

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). ESR was the third U.S. background check firm to be ‘Safe Harbor’ Certified for data privacy protection. To learn more about ESR’s Leadership, Resources, and Solutions, visit http://www.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!