Compliance “Front and Center” for Employment Background Checks in 2020

Due Diligence

Written By ESR News Blog Editor Thomas Ahearn

“Compliance will be front and center for organizations that conduct pre-employment background checks in 2020,” according to an article about “3 Employment Screening Trends to Know Before You Hire in 2020” that is available on the website of the Society for Human Resource Management (SHRM).

For the article, SHRM Online Manager/Editor for Talent Acquisition Roy Maurer interviewed several experts in the field of background checks, including Attorney Lester Rosen, founder and chief executive officer (CEO) of leading global background check provider Employment Screening Resources® (ESR).

The first trend Maurer mentioned is that class-action lawsuits claiming violations of the Fair Credit Reporting Act (FCRA), a federal law that regulates background checks in the United States, will rise in 2020. Companies paid out $174 million over the past decade to settle FCRA claims, according to data compiled by Good Jobs First.

FCRA lawsuits may originate from mere technical violations such as types of forms used. “The exposure from having bad forms – particularly if you are a larger employer – can mushroom to major liability,” said Rosen, adding that state courts are potential venues even if a federal court does not take a case.

While the 2016 U.S. Supreme Court ruling in Spokeo v. Robins found plaintiffs must prove actual harm in lawsuits for alleged technical violations of statutes such as the FCRA, “that doesn’t mean that these cases can’t still be brought. Laying down your guard on FCRA compliance is dangerous,” Rosen warned.

Rosen added that while FCRA lawsuits have been dismissed or decertified and courts are slowly paying more attention to Spokeo with decisions that say “if there’s no harm, there’s no foul,” the liability risk still exists and there’s no guarantee that any particular judge will rule in the employer’s favor.

Looking to the future, “Rosen believes that once the issue of technical errors on forms settles down, the next litigation area is going to be on the accuracy of reporting, and more specifically, how many points of data background check providers should confirm before reporting a criminal record,” Maurer wrote

The second trend is that state and local laws for background checks such as “Ban the Box” laws removing questions about criminal history from job applications and salary history bans prohibiting recruiters from asking applicants about past compensation to promote equal pay will continue to grow in 2020.

Rosen told Mauer employers will have to keep up with many different laws. “Which law has precedence and which law applies in which case? Is it where the applicant lives? Is it where the job is located? The problem is that instead of a clear line, there’s the possibility of multiple and conflicting laws.”

He also agreed with other experts that the situation is not expected to improve in 2020. “It will probably get more confusing before it gets any clearer, because it’s easier to get a city council or statehouse to pass a law than the U.S. Congress [to approve one national law for all jurisdictions].”

The third trend is that emerging screening technologies such as using artificial intelligence (AI) for background checks will generate more scrutiny in 2020. “AI has potential with screening, but the idea that this magic machine can pick out whether a person is qualified for your job and has the right skill sets is not here yet,” Rosen said.

In addition, Rosen suggested “the jury’s still out” on continuous monitoring, one of the more popular screening trends from 2019. “In some states, continuous monitoring is helpful because the underlying data set is pretty good, but in other jurisdictions the underlying data sets are awful,” he explained.

“There are courts that don’t provide data, or don’t update it, or have not digitized it. Databases are full of false positives and false negatives,” said Rosen. “The idea that there’s a miraculous source of all-knowing information is misleading and not the panacea that the marketing materials make it sound like.”

Rosen – author of “The Safe Hiring Manual” – will present a session at the 2020 SHRM Talent Conference & Exposition taking place in Orlando, Florida, from April 20 to 22, 2020. He will speak about “Legal and Effective Reference Checking, Credential and Education Verification” from 3:00 p.m. to 5:00 p.m. on Tuesday, April 21, 2020.

Founded by Rosen in 1997, Employment Screening Resources® (ESR) is accredited by the Professional Background Screening Association (PBSA), undergoes annual SOC 2® audits, and was named a top screening firm by HRO Today Magazine in 2019. To learn more about ESR, visit www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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