CONSUMER REPORTING AND EMPLOYER COMPLIANCE INFORMATION
Nationwide Credit Reporting
The three major credit bureaus announced that beginning July 1, 2022, paid medical collection debts will be removed from consumer credit reports, and the time period before unpaid medical debts are reported increases from six months to one year. Additionally, in the first half of 2023, it has been announced that medical collection accounts $500 and under will no longer be included in a consumer credit report. While these changes don’t and won’t eliminate medical debt from credit reports entirely, the three credit bureaus—Equifax, Experian and TransUnion—do note that they anticipate as much as 70% of consumer medical debt will be removed from credit reports. Please keep in mind that for those consumers who have medical debt on a credit card, that will continue to exist as credit card/loan debt until paid.
Nationwide EEOC Guidance
New EEOC guidance for employers using AI during hiring: AI can potentially discriminate against applicants with disabilities. On May 12, 2022, the Equal Employment Opportunity Commission issued a new comprehensive “technical assistance” guidance entitled The Americans with Disabilities Act and the Use of Software, Algorithms, and Artificial Intelligence to Assess Job Applicants and Employees. As referenced in this guidance, the “screen out” problem of AI rejecting applicants who would otherwise qualify for the job with reasonable accommodation is addressed. Under the ADA, a screen out is unlawful if the tool screened out an individual who can perform essential functions of the job with a reasonable accommodation. Employers should proactively manage risk by addressing unintended results from AI technology and communicate up front the knowledge, skill, ability, education, experience, quality, or trait that will be measured or screened with the AI tool. All while further empowering applicants to share if they feel some disability accommodation will be needed.
It’s always a good time to check, double-, and triple-check to ensure that your background check consumer reporting is FCRA compliant. When an employer uses a third party (like A-Check Global) to conduct background checks, there are FCRA compliance requirements that must be followed. For your convenience, here’s a short checklist of key requirements:
- Ensure there is a permissible purpose for performing a background check on an applicant/employee, based on their role and responsibilities.
- Provide clear written notice in a stand-alone document to the applicant/employee that a background check will be conducted, and the resulting information will be used to make an employment decision.
- Obtain the applicant/employee’s written consent to perform a background check and/or investigative report.
- If the background check information results in an adverse action decision, a notice of pre-adverse action, along with a copy of the background check results and a copy of the Summary of Your Rights Under the Fair Credit Reporting Act, must be presented to the individual.
- Allow the individual at least five business days to dispute the information in the background check.
- If adverse action is taken upon final decision, provide the individual with a final notice of adverse action.
We’re focused on helping you remain compliant, and always welcome your questions.
Pre-Adverse Action Requirements
While the case in this example was a win for the employer, it’s a great reminder that compliance with FCRA law at every step of the background screening process can help minimize risk from costly litigation. If an employer decides to rescind an offer based on information from a report—a criminal conviction in this case—then before taking adverse action the employer must provide the applicant with: (1) a copy of the background check and (2) a written summary of consumer rights. The prospective employee then gets a reasonable amount of time to dispute the accuracy of the report. While this employer did not provide the report before rescinding the offer, the applicant’s suit did not prevail under FCRA because they do not have the right to dispute accurate—but negative—information found on the report.
SUBSTANCE ABUSE TESTING
If approved and signed into law, Washington, D.C. will join an increasing number of state and local jurisdictions restricting employers from testing employees for cannabis use as a condition of employment. The bill applies to nearly all employers in D.C. and under the bill, employers cannot terminate, suspend, fail to promote, demote, refuse to hire, or otherwise penalize an employee or prospective employee based on their cannabis use, their status as a medical cannabis program patient, or the presence of cannabinoid metabolites in their system without additional factors indicating impairment. That said, employers can test and discipline employees in safety-sensitive positions for cannabis use and can test to comply with federal statute, federal regulations, or federal contracts. Employers can also require post-accident and reasonable-suspicion drug testing.
Please keep in mind that A-Check Global is always here to help as you determine the course of your own employment drug testing.
BAN THE BOX
We’ll keep an eye on this. Ban the Box regulations—the consideration of an applicant or employee’s criminal history during employment decisions—have been proposed for federal employees, perhaps serving as a model for upcoming regulations governing the consideration of applicant criminal history for federal contractors as well. The U.S. Office of Personnel Management (OPM) proposed initial regulations to implement the Fair Chance to Compete for Jobs Act of 2019 (Fair Chance Act). Initially, as mentioned, these proposed regulations, if adopted, will affect only federal employees.
Des Moines, Iowa
Although not widely promoted, the city of Des Moines, Iowa, passed a “ban-the-box” law limiting employer inquiries into an applicant’s criminal history until after a conditional offer of employment. The Des Moines city council unanimously passed the ordinance amending municipal code to make it “illegal and discriminatory” for employers to: (1) include criminal history inquiries on an application, and (2) inquire into criminal history or conduct criminal background checks before a conditional offer of employment.
Federal Privacy Law Discussion
On June 3, 2022, a bipartisan group of lawmakers published a discussion draft for the proposed American Data Privacy and Protection Act (ADPPA)—momentum in the effort toward a federal privacy law. The ADPPA is a draft bill and is yet to be introduced in the U.S. House or Senate, which means that any provision is subject to amendment. The ADPPA would apply broadly to organizations and businesses operating in the United States and defines consumer protection of “Covered data”—information that identifies or is linked or reasonably linkable to an individual or a device that identifies or is linked or reasonably linkable to one or more individuals, including derived data and unique identifiers. We’ll keep an eye on these efforts and will report progress.
Questions? We’re here to help!