Employers Using Continuous Monitoring Services Have Important Compliance Considerations

Due Diligence

Written By ESR News Blog Editor Thomas Ahearn

Employers using continuous monitoring services that alert them to changes in the credit and criminal histories of their employees may have potential liability under the Fair Credit Reporting Act (FCRA), according to the article “Employers Need to Grasp Risks of Continuous Monitoring Services” on the Bloomberg Law® website.

The article on the Bloomberg Law® Daily Labor Report® written by Sidley Austin LLP attorneys Margaret Hope Allen and Tiffanie N. Limbrick examined when the FCRA might apply to employers who use continuous monitoring services and what these employers should consider before contracting for these services.

“Employers are increasingly exploring continuous monitoring services that address workforce risk by providing alerts on changes in an employee’s credit history, criminal background, arrest history, litigation history, and even the employee’s inclusion on a terrorist watch list,” Allen and Limbrick explained in their article.

“On first blush, this type of service may appear to implicate the Fair Credit Reporting Act (FCRA) and related state laws. But some continuous monitoring services take the position that they are not subject to the FCRA and prohibit employers from using their services in ways that implicate the FCRA,” Allen and Limbrick wrote.

The article examined whether the FCRA, a federal law regulating background checks for employment purposes in the United States, applies to continuous monitoring services and whether these services are considered a “consumer report,” the official term for a background check report under the FCRA.

The article – posted on September 14, 2020 – offered steps that employers using continuous monitoring services can consider to potentially limit liability under the FCRA. The article is at https://news.bloomberglaw.com/daily-labor-report/insight-employers-need-to-grasp-risks-of-continuous-monitoring-services.

“There are numerous details and issues to consider before using continuous monitoring including accuracy and up to date information considerations,” agreed Attorney Lester Rosen, founder and Chief Executive Officer (CEO) of leading global background check firm Employment Screening Resources® (ESR).

“For one thing, not all states’ complete and up to date information is found in ‘national criminal databases,’ meaning there can be both false negatives and false positives without validation with the primary source of the record. In addition, employers need to make sure that the monitoring is only performed on current employees and not those no longer employed by the company,” added Rosen, author of “The Safe Hiring Manual.”

“Even if a criminal record is found during monitoring, employers need to ensure its use is fair, relevant, and non-discriminatory, and in keeping with local and state laws on the use of criminal records as well as the U.S. Equal Employment Opportunity Commission guidance on the use of criminal records,” Rosen explained.

Rosen was chairperson of the steering committee that founded the Professional Background Screening Association (PBSA) – a nonprofit trade organization representing the background screening industry – and served as the first co-chair. In 2019, he received the PBSA Lifetime Achievement Award.

Employment Screening Resources® (ESR) – which was founded by Rosen in 1997 – is accredited by the PBSA and offers legally compliant continuous monitoring that can be an important component of any company’s post-hire screening hiring program. To learn more about ESR, please 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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