A CRAsh Course on Consumer Reporting Agencies

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As your trusted partner, we love updating our blog with information that helps you make informed employment decisions. When speaking with customers, we’re often asked about the laws surrounding Consumer Reporting Agencies and these laws affect employers, employees, and applicants. Of course, this is such an immense topic that we’ve decided to devote several upcoming blog articles to the subject. For today, here’s a quick intro and a sneak peek at what you’ll see in upcoming entries.

The Birth of the Consumer Reporting Industry

The consumer reporting industry arguably gets its start in 1899 when the first credit bureau—Retail Credit Company—was founded. While originally used to assess a person’s ability to repay debt, consumer reporting now also encompasses tenant screening, employment screening, insurance risk analysis, and more.

Due to the potential for background screens to be used unfairly to deny credit, housing, or employment, a number of regulations have been put in place to protect the subjects of a background investigation. The law refers to these individuals as consumers.

Introducing . . . The Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is the largest piece of consumer protection law. It acts as the foundation of consumer rights at the federal level. Both CRAs, and the companies that act as the end user of a consumer report must adhere to the rules of the FCRA. In addition to the FCRA, many states, counties, and municipalities have passed their own regulations. These regulations are designed to offer further protection to consumers from unfair background screening procedures.

Violations of consumer rights as provided by the FCRA and other consumer protection laws can lead to costly litigation. In 2016 more than $75 million was awarded to defendants who successfully argued violations of the FCRA. What’s worse, these violations are often reported in business news or national media, potentially damaging a company’s brand and ability to recruit qualified talent. This number is expected to rise in 2017 and 2018.

With the potential rise of litigation in mind, we’re dedicated to providing ongoing advice on how to fairly utilize consumer reports, and remain compliant with federal, state and local regulations. In upcoming posts we’ll present regulatory trends affecting the screening industry, and offer advice and best practices to comply with these regulations. We hope you like what you read, and find this information useful. Stay tuned for:

  • The importance of credit reports
  • The rise of “Ban the Box” legislation
  • Restricting the use of salary history when making employment decisions

If you want more information about any of our articles, or if there’s something you’d like us to write about please contact us at connect@acheckglobal.com.

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Why Choose Applicant Tracking System (ATS) Integration?

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These days, many companies wrestle to balance employee workload and overall efficiency. As a result, employees might sometimes feel they are doing the work of three people or more. In that type of environment, it just makes sense to look for solutions that streamline responsibilities and quite frankly, make the job a little easier.

From a Human Resources technology standpoint, one effective solution is an applicant tracking system (ATS) integration. Many use some form of online ATS to hire, on-board and track applicants, and then another system(s) to perform pre-employment and/or drug screening before making employment decisions. An integrated solution unifies these functions through secure data sharing and a user friendly, web-based interface, providing the user a seamless operating environment.

The Goal is Effortless Employee Screening

Employment screening is a key part of the onboarding process. It helps ensure candidates are who they say they are and that they’re qualified to perform the job in question, while also helping to minimize employee-related risk pertaining to a company’s brand reputation, safety, and compliance.

Companies can realize significant benefits by integrating their employment screening process and ATS. A successful integration requires the cooperation of the employment screening provider and the applicant tracking system vendor to ensure software compatibility. Partnering with a screening provider dedicated to strong project management expertise while overseeing the entire process is also a must have.

The beauty of integrating is that you’ll have options to either take a simple workflow solution that’s both affordable and quick to implement, or a custom solution where you have the ability to develop around your specific business rules—integrating a workflow that makes sense to your organization and your system end users, while still providing convenience and efficiency to your candidates. Discussing these options with your employment screening partner will allow you to determine which will work best for your company.

At A-Check Global we’re a well-oiled integration machine

As an experienced employment screening provider with many successful integrations already in place through top ATS providers, A-Check Global works closely with you, combining current technologies with dedicated customer support to securely and effectively bring your company into the future of employee onboarding.

ATS integration allows your staff to maximize efficiency by eliminating redundant processes, thereby saving both time and money. It’s a win-win, and A-Check Global would be honored to partner with you toward that effective solution.

Reviewing the Benefits of a Medical Review Officer (MRO)

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An MRO can play an important role in your employment decisions

A Medical Review Officer (MRO) is responsible for providing a medically-verified evaluation on drug screen results. For applicants and employees not regulated by the Department of Transportation (DOT), this applies to any non-negative laboratory result determination. For applicants and employees who fall under DOT regulation (drivers or fork lift operators, for example), this applies to every drug screen, regardless of the laboratory’s initial determination. DOT applicants or employees are subject to additional requirements because of stricter, federally mandated regulation and “Return-To-Duty” programs.

The entire MRO process is beneficial for both employee and employer, and aims to maximize accuracy throughout the drug screening process.

An added layer of review to assist both applicant/employee and employer

Applicants may disclose any health conditions to a medical professional, allowing them to protect their privacy during the application and screening process.

It is possible for an applicant’s drug screen to show a positive result due to a medical condition or prescribed medication. By presenting drug screen results to an MRO, employers might avoid numerous expenses associated with removing or disqualifying an applicant or employee from employment, only to then discover a medically valid condition.

Additionally, the MRO process might also reveal conditions detrimental to safety. If an MRO believes that a medical condition or prescribed medication associated with an employee can inhibit that worker’s ability to safely perform their duties, they can choose to disclose that information on the final MRO report for the employer. A “Fit-For-Duty” test can also be requested by the MRO to properly assess the worker’s ability to perform job duties and measure any possible impairment concerns.

Drug screening best practices prove the need for MRO services

Dismissing a worker or disqualifying an applicant based on a positive drug screen that has not undergone MRO review is not necessarily congruent with industry best-practice policies and can also prove costly for the employer. For example, according to a 2014 Training Industry Report, onboarding a typical full time employee can cost up to $1,000—and require approximately 40 hours of company provided training. MRO consultation during the drug screening process can help an employer make sound employment decisions before that money is spent.

If your company is interested in taking the next step in drug screening accuracy and fairness in your Drug-Free Workplace policy, contact A-Check Global to get started immediately with MRO and other drug screening services.

Salary History – Think Twice Before Asking

Pay Equity Legislation 5_02_2017Salary History Bans gain momentum in the employment process

A growing number of cities and states are voting on or implementing legislation in favor of a salary history ban during pre-employment screening—prohibiting employers from asking wage history questions to job applicants or considering previous applicant salaries as a determining factor in employment decisions.

Asking for an applicant’s salary history may seem an innocuous enough question; one of many that has been standard pre-employment practice for years. But like criminal history, it may lead to an unintended bias against applicants.

Asking for a person’s salary history can perpetuate pay disparity.

Think of it this way; an employee works diligently for five years—earning incremental pay increases along the way—and now wants to apply that experience to a new position at a much larger company. Unfortunately, the larger company asks for the employee’s salary history before offering the new position instead of simply paying market value. That could easily result in pay disparity because this person made less money at the previous position. If this scenario doesn’t seem fair to you, you are not alone.

We’re keeping an eye on legislative activity.

Rep. Eleanor Holmes Norton, (D-DC) and co-sponsors Reps. Rosa DeLauro (D-CT), Jerrold Nadler (D-NY), and Jackie Speier (D-CA) have proposed the Pay Equity for All Act of 2017 which would prohibit employers from asking job applicants for their salary history before making a job or salary offer. Many states are also enacting their own legislation to address this issue.

The following states and cities have implemented or are in the process of implementing pay equity legislation including salary history bans:

Massachusetts     New York City     District of Columbia    Philadelphia      Oregon     Iowa    California    Puerto Rico    New Orleans     Connecticut    Delaware    Georgia    Idaho    Illinois    Maryland    Maine    Mississippi    Montana    New York    Texas    New Jersey    North Carolina    Pennsylvania    Vermont    Virginia    Washington    Rhode Island

And, it’s very likely this trend will continue. Please know that as your trusted partner, A-Check is keeping a close eye on this evolving legislation, and remain committed to developing solutions that ensure you have the ability to continue making informed pre-employment decisions.

 

Effective July 1, 2017: Tighter Regulations on Considering Criminal History During Employment Decisions

In 2016, The California Fair Employment and Housing Council introduced revised regulations governing an employer’s consideration of criminal history when making employment decisions. The Office of Administrative Law approved these regulations, and they will become effective on July 1, 2017.

Essentially, these new regulations focus on two areas:

  1. Adverse impact claims
  2. Prohibitions and notice requirements regarding criminal history

Let’s take a closer look at what this may mean for you and how it might impact your employment decision process.

Adverse Impact Claims

Simply put, these new regulations will impose stricter limitations when using criminal records during employment decisions (for example, an employer’s decision to hire, fire, train or discipline an employee). These California regulations now align with federal law stating Employers are prohibited from using criminal history if doing so has an adverse impact on a current or prospective employee.

Likewise, employees are permitted to confirm adverse impact by using criminal conviction statistics, explaining that state/federal statistics of disparities in criminal convictions of a protected category are sufficient to illustrate adverse impact.

If an existing or potential employee establishes a claim, the burden is on the employer to show that the policy regarding consideration of criminal history is “job-related and consistent with business necessity” and takes into consideration the nature of the offense and the amount of time passed since the offense and/or completion of the sentence. Policies that consider convictions older than seven years may be subject to rebuttable presumption. Bright-line disqualification practices are also subject to new regulations. Employers must demonstrate that this practice can clearly distinguish between employees who do or do not impose a risk, and that criminal conviction has a negative impact on ability to perform job duties. Once employers establish this defense, the burden is on the employee to illustrate an alternative resolution.

Prohibitions and notice requirements regarding criminal history

New regulations also detail criminal history information that employers may no longer consider, and include additional requirements for providing applicant notice. Specifically, employers are prohibited from considering:

  • Arrests that did not result in conviction
  • Pre- or Post-trial diversion
  • Dismissed, sealed, or expunged conviction
  • Certain juvenile criminal history
  • Non-felony conviction (older than two years) of marijuana possession

If an employer receives a disqualifying conviction from a source other than the application, the employer must now provide notice of a disqualifying conviction prior to adverse action AND allow the applicant reasonable opportunity to respond with evidence of factual inaccuracy.

PLEASE NOTE: This notice and opportunity-to-respond requirement differs from the Fair Credit Reporting Act (“FCRA”) and “Ban the Box” California ordinances.

Prior to July 1, 2017, please take a moment to review your policies. California Employers should:

  • Reassess use of bright-line disqualifications
  • Update policies/procedures to remove prohibited disqualifications
  • Confirm that consumer reporting agencies used to screen applicants have implemented new regulations
  • Create policy/procedure providing notice of disqualifying conviction, as now required
  • Remain aware of federal/local regulations imposing additional limitations

The information contained herein is not specific legal advice, and should not be construed as such. You should discuss the use of policies and practices regarding employment decisions with your organization’s legal counsel to ensure regulatory compliance. For more information these and other regulations regarding employment screening, please contact A-Check Global via our contact page or 877-345-2021 today.