EmployeeScreenIQ Blog

While we respect and admire Workforce Management, we were troubled by the article, “Burden of Proof,” which was part of a special report on Background Checking (February 2010 issue).  Having been quoted in this article, I was disappointed that my quotes, and those of one of my colleagues, were presented out of context.   The author attempts to make a correlation between the lack of empirical data on the ROI of background screening and the benefits of doing so for employers.   The fact is our industry trade group, the National Association of Professional Background Screeners (NAPBS), has not conducted such studies.  However, the author fails to mention that such studies do exist outside of the trade group.

Additionally, some important points and studies on background screening were left out. For instance:

• One report by the Association of Certified Fraud Examiners found that the median loss for small firms with fewer than one hundred employees was $190,000. (http://online.wsj.com/article/SB10001424052748704533204575047594152725262.html?mod=WSJ_Technology_RIGHTBottomSBHeadLines)
• The Society for Human Resource Management says that 70% of all job applications provide information that is not fully accurate. (http://blogs.wsj.com/law/2009/11/13/just-say-no-employers-wisening-up-to-resume-padding/)
• The average jury award for negligent hiring against a company was $870,390 in 2000, according to Barry J. Nadell, former president of InfoLink Screening Services, in Chatsworth, California.

Probably more than anything, the ROI comes from bad press. Consider the following:

• The news that a Radio Shack chief executive falsified his diploma, causing their stock to tumble drastically.
• Last week’s revelation that at least 10 senior executives and directors at publicly-traded companies had corporate biographies claiming unearned academic credentials.

Background screening is one of the most important aspects of the hiring process; in fact, Workforce Management has published many articles over the years citing similar stats, studies and horror stories.

While I agree that the EEOC does have several initiatives to curb some background screening practices, it’s a far stretch to say the burden of proof will be on employers.  Admittedly, some companies are performing screening in a less than desirable manner.  However, NAPBS members have worked hard to separate themselves from these types of companies.  If background screening is done properly, it finds the right jobs for the right people.  If the selection of employees is done properly and no discriminatory hiring practices are utilized, the EEOC finds no cause for action.  Consider that fact that the largest user of background screening services in the world is the U.S. Government and their contractors!

Jason B Morris, President

EmployeeScreenIQ

Past Co-Chairman NAPBS

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Kudos to the National Association of Professional Background Screners (NAPBS) for passing and launching the industries first accreditation program.  Since before I was Co-Chairman of NAPBS hundreds of people have put in thousands of tireless hours to get this program off the ground.  The Background Screening Credentialing Council (BSCC) was formed two years ago to take the hard work that was done previously and implement it into reality.  I couldn’t be more proud of my competitors being able to work together to finally get this done!  EmployeeScreenIQ is looking forward to the challenge of going through this process in the coming year!

New Accreditation Effort Introduces a Self-Regulating Program Poised to Change the Industry

MORRISVILLE, N.C., Feb. 24 /PRNewswire/ — The National Association of Professional Background Screeners (NAPBS®) announced today they will be launching the Background Screening Agency Accreditation Program (BSAAP), the first ever industry-specific background screening accreditation program at the opening ceremonies of the NAPBS 2010 Annual Conference on March 7th in San Antonio.

Each year, U.S. employers, organizations and governmental agencies request millions of consumer reports to assist with critical business decisions involving background screening. Background screening reports, which are categorized as consumer reports, are currently regulated at both the federal and state level.  Since its inception, NAPBS has believed that there is a strong need for a singular cohesive industry standard and created the BSAAP. Governed by a strict professional standard composed of requirements and measurements, the BSAAP is positioned to become a widely recognized seal of approval that brings national recognition to background screening organizations (also referred to as Consumer Reporting Agencies). This recognition will stand as the industry “seal” representing a background screening organization’s commitment to excellence, accountability, high professional standards and continued institutional improvement.

“The BSAAP is the industry’s primary vehicle for quality assurance, self-regulation and public accountability,” said Tracy Seabrook, CAE, executive director of NAPBS. ”Developed and sustained by background screening professionals, the BSAAP reflects, reinforces, and promotes best practices, institutional ethics, and the highest standards of background screening operations.”

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In response to what it perceives as a barrier to people getting jobs, the Oregon Senate has introduced a bill to curb employers’ use of credit reports.

Oregon Senate Bill 1045 would prevent most employers from using a prospective candidate’s credit history into pre-employment screening, promotion or other employment-related decisions.  According to The Oregonian “[the] bill would continue to allow businesses to look into an applicant’s criminal and employment history and do other background checks. And certain employers could continue to consider credit histories, such as banks, law enforcement agencies and other businesses that can show credit checks are necessary to evaluate candidates for specific positions.

The proposal will be reviewed by Governor Ted Kulongski and is expected to pass.  Oregon is among the states with the highest unemployment rates in the country and is well-known for its liberal policies and practices.  Opponents are stating that this law would be anti-business by limiting the information employers can use to make an informed hiring decision.

If the law is passed, Oregon would join Hawaii and Washington as the only states that limit the use of credit reports.

We anticipate that NAPBS will advocate on behalf of employers on this issue and will keep you posted.  We are, of course, opposed to this bill.  As long as credit reports are used legally and without discrimination, employers should have the ability to exercise the rights granted under the Fair Credit Reporting Act (FCRA).

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Yesterday we covered the Amy Bishop shooting story on our blog.   Later in the day we were contacted by the Associated Press for comment due to our extensive coverage of Workplace Violence issues.  Other than being a bit mis-quoted, the story turned out great.  Background screening firms do NOT check weapon registrations are part of the employment screening process.  There was obviously a bit of confusion, what I said was a reference check or employment verification MAY have uncovered something.  Oh well, we are working to have the quote restated!

Jason Morris, president of EmployeeScreenIQ, a Cleveland, Ohio, company that does background checks for colleges and other large institutions, said it’s possible a background check would not have turned up the incidents in Bishop’s past, particularly since she wasn’t charged.

“It’s not a silver bullet,” he said of background checks, but a check of weapons records “might have uncovered something.”

For the full story, read below:

Husband: Ala. prof went to range before shooting

HUNTSVILLE, Ala. — The husband of an Alabama college professor accused of shooting her colleagues says the couple went to a shooting range weeks before the killing but he didn’t know where she got the gun.

James Anderson told The Associated Press Monday that he did not know how long Amy Bishop had a gun before Friday’s attack. He says the family did not own a gun.

Bishop is accused of opening fire at a faculty meeting at the University of Alabama in Huntsville, killing three and wounding three.

Anderson says she was acting like “a normal professor” in the days before the shooting.

He also says he and his wife were cleared in the investigation of a pipe bomb sent to one of her former bosses in Massachusetts in 1993.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

HUNTSVILLE, Ala. (AP) — Disclosures that an Alabama professor accused of fatally shooting three colleagues was twice questioned by criminal investigators years ago raised concerns Monday of why background checks didn’t prevent her hiring at the school in 2003.

University of Alabama in Huntsville officials were meeting privately to review the files concerning Amy Bishop, a Harvard-educated neurobiologist accused of pulling a gun at a Friday faculty meeting and shooting six people, three fatally. Two of the survivors remained in critical condition Monday.

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We’re a little late to the party on this one, but we just learned that the Equal Employment Opportunity Commission (EEOC) has filed a lawsuit against Freeman Companies saying that they have “engaged in a pattern or practice of unlawful discrimination by refusing to hire a class of black, Hispanic, and male job applicants across the United States.”

They’ve arrived at there position because, “Freeman has rejected job applicants based on their credit history and if they have had one or more of various types of criminal charges or convictions. This practice has an unlawful discriminatory impact because of race, national origin, and sex, and is neither job-related nor justified by business necessity, the EEOC charged in its lawsuit.”

Read EEOC Release

There is a lot that is being left unsaid here.  We met with the EEOC in March and they specifically said that they were not opposed to background checks and employment screening.  They were mainly concerned about “bright-line” hiring decisions that had a disparate impact on minorities.  Therefore, it is my assumption that there is more to the suit than the fact that Freeman conducted background checks and made some adverse hiring decisions.
We’ll follow this case as information becomes available and report our findings.

Just our $.02.  Employers need to weigh each instance of adverse information on its own merits to determine job relatedness, seriousness of offenses or transgressions, how long ago the activity took place and whether the person is a habitual offender.

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Recently a long awaited study was published on the recidivism rates of ex-criminals in the United States.  This study known in our industry as the “Blumstein Study” examined New York State Arrest records for more than 88,000 individuals who were first arrested in 1980.  Their recidivism rates were followed for 27 years through 2007.  The study which was published in the Journal of Criminology was conducted by Carnegie Mellon Professor Alfred Blumstein and Co-Author Kiminori Nakamura.

To summarize the report, ex-offenders do in fact have a high rate of recidivism within the first five years after arrest.  However, the study suggests that for offenders who “stay clean” for five years or more are much less likely to get arrested.  They suggest that after five years they are almost as likely to commit a crime as the rest of the general population of the United States.

The study is timely and important for many reasons.  First, the Obama administration has made it a point to break down those barriers for individuals who have committed crimes to gain employment.  Secondly, the EEOC has a mission to ensure a disparate class of ex-offenders is not created in the Untied States.  The problem is that the study has a lot of holes.

Noted employment screening industry experts and members of the National Association of Professional Background Screeners (NAPBS)  have commented on this study for months.   This week  Security Management Magazine published a great article on the topic.  One well respected expert concluded that because the study was limited to New York state it fails to find those criminals who may have committed crimes in other states.  Blumstein acknowledges this and expects that might lead to a 10 percent increase in the risk findings after that data is added.  The same expert also notes that because the study only looks at arrests and not convictions the true sample size is greatly reduced.

In my opinion these industry experts are spot on! Having examined the findings of the study I find even more shortcomings.  First, what are the parallels between major crimes and minor ones.  Meaning, how does the recidivism rate for someone convicted of Armed Robbery compare to someone convicted of Petty Theft? Secondly, the study is only able to track the rate of crimes re-committed that the individual has been caught committing.  Many times employees are simply fired and never prosecuted for breaking the law.  Lastly, in the pre-employment screening world, many times we are very concerned with “white collar” crimes.  There is no data on crimes committed at the Federal District Court level.  These crimes could include embezzlement, bank fraud, kidnapping etc..  These are only three examples of where I feel the study falls short.  I will reserve further comments because I feel an article brewing in my head and I don’t want to give it all away here!

In conclusion, the study is very important.  It would have had a huge impact on the recent El Vs. SEPTA case, had it been published a few years back.  It’s also important because it could pose a great defense to employers being sued under the Negligent Hiring doctrine.  What we do know is this; the current administration has made the “ex-offender in the workplace” issue a priority to solve.  The question is do employers want the government telling them which perspective employees are a risk enough to take?

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In Parts 1 & 2, we discussed many very important steps in the RFP process.  We also highlighted why a company may chose to go to bid for their background screening services. Once again, this is a very daunting process; one that takes months to prepare for and months to complete.  This series is not a manual on how to write an RFP, the National Association for Professional Background Screeners has already done that. That can be found by Clicking Here!

Today, we will discuss the final important steps in your RFP process.

• References. References give good insight and provide an added level of reinforcement to what the CRA have already disclosed regarding their products and services.  Bidders should be able to supply at least 3 references, with one being similar in size and scope to your own organization. You may also want them to provide some case studies of comparable clients. This will show you how the company plans on implementing its services into your organization.
• Applicant Tracking Systems (ATS).There is an increasing trend of CRA’s partnering with Applicant Tracking System (ATS) providers. The reason this is becoming so attractive is that it provides a one stop resource for your organization. A recruiter can track the flow of their candidate through different stages of the screening program including the background check.  If your company currently uses an ATS, you’ll want to find out if the CRA can integrate with it and if there is an additional charge. If your company currently does not have an ATS, does the screening provider have any partnerships? (and with whom?)  There is a cost and time saving component in being able to integrate.
• Service Level Agreements. Having this as part of your process will save you the headache down the road of having to go back and define what exactly needs to be done.   You don’t want a negative experience at the expense of your applicant and costing you a hire should a situation arise.  Important questions to ask yourself when creating a Service Level Agreement (SLA): How Will my customer service needs be met? What is the guaranteed ‘uptime’ of the vendors online portal?  Can they guarantee an ‘average’ turnaround time?  Basically, a good SLA should spell out in writing that the promises they are making are being kept.  In return, you guarantee you are giving the Background Screening Firm what they need to do their job!
• Education and Compliance. Education and compliance go hand in hand. CRA’s should offer you assistance in being able to make informed hiring decisions.  Find out what educational tools they offer to keep their clients current on the latest background screening trends and laws.   What steps do they take to keep you in compliance with the ever changing laws?  Do they update you on court closings? Do they publish information for you to education yourself? For example, some companies will publish a blog, a newsletter and other informational sites.
• Financial and Legal Information. A sticking point for companies going out to bid is asking for financial information.  This is something that should be avoided since most companies will not provide this information.   As mentioned throughout this piece there are other ways to determine how stable a company is other than asking for financial records.  Simply asking for this information may put you at risk of quality CRA’s failing to respond solely based on this question.

As the buyer of services, you need to be clear on setting your expectations to potential bidders and hold them to these deadlines.   If for whatever reason you can’t hold to these dates, communication needs to go out to the bidders with a revised deadline and again the expectation should be clear.  A realistic time line should also be created to give the bidders time to respond to all questions; usually a minimum of 2 weeks.  Assessing the CRA’s responsiveness and flexibility throughout the entire RFP process will provide key insights as to how they  will  perform  for  you  should  they  earn  your  business.  You’ll also want to look for consistency of their responses throughout the entire document.  Any inconsistencies should be examined further and followed up on if necessary for clarification.  Chose a provider that helps your company maintain its financial, security, and hiring goals.  In some ways this can be a difficult balance, finding out what you are getting in the RFP process is a great start.  If the RFP is the sales pitch, your willingness to follow the process is paramount to its success.   Holding your newly selected vendor to what was promised in the RFP can be difficult.  It’s important that you hold them to the service levels they promise and hold them accountable if they are unable to maintain it.  We understand that its cliché to say “Actions speak loader than words,” but unless you are willing to test a vendor and hold them to their commitments, the process is meaningless.  Anyone can promise anything! Be diligent! Failing to follow critical steps could put your company in peril.  Trying to cut costs could quite simply harm your organization at the expense of your employees and customers!  We hope these tips are helpful to you and your company.  If you have any questions on how to effectively create your RFP we are happy to help.  You may contact us at info@employeescreen.com

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Written by John Sferry, Director of Business Development and Jason Morris, President and COO of EmployeeScreenIQ.

Founded in 1999, EmployeeScreenIQ is a Cleveland, Ohio-based employment screening company offering a variety of employment screening services to mid- and large-cap organizations throughout the world, including those in North and South America, Europe and East Asia. For more information visit http://www.employeescreen.com

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It appears that  HR 3149 was introduced yesterday and Referred to Committee.  HR 3149 is a bill set to amend the Fair Credit Reporting Act (FCRA) to prohibit the use of consumer credit checks against prospective and current employees for the purposes of making adverse employment decisions.  EmployeeScreenIQ and EmployeeScreen University have written about this topic many times in the past.  As an industry, pre-employment credit reports are only suggested to be used when necessary and only for the responsibilities of that particular position.  In fact, the EEOC and FCRA already have provisions that the adverse information can only be used if it fits within the scope of the job. Most background screening programs only impliment this type of check as part of a much broader search.

Section three of the bill provides some exceptions but does not take into account most of them.  We suggest you spend some time reading this bill and write your congressperson to oppose it.  We agree the intent of this bill is to get more people to work.  However, as with most legislation, there are some unintended consequences.  There must be provisions for positions that could be negatively effected by a person with a poor credit history.  This 111th Congress has a horrible track record already for not even reading bills before voting.  Reach out and make a difference, make them read it, make them amend it!

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I was happy to see this article this morning on Reuters.  We still get a lot of questions about using Polygraph tests as a mode for pre-employment screening.  Years ago, lie detector tests were huge in the pre-employment realm, like many things it was legislated out of existence for that purpose.  The polygraph industry was once quite large, now it is limited to a few select specialists.  This article does a great job in summarizing the Employee Polygraph Protection Act (EPPA) and its limitations.  Enjoy!

Lie Detector Tests

Who is Covered

The Employee Polygraph Protection Act (EPPA) applies to most private employers. The law does not cover federal, state and local governments.

Basic Provisions/Requirements

The EPPA prohibits most private employers from using lie detector tests, either for pre-employment screening or during the course of employment.

Employers generally may not require or request any employee or job applicant to take a lie detector test, or discharge, discipline, or discriminate against an employee or job applicant for refusing to take a test or for exercising other rights under the Act.

Employers may not use or inquire about the results of a lie detector test or discharge or discriminate against an employee or job applicant on the basis of the results of a test, or for filing a complaint, or for participating in a proceeding under the Act.

Subject to restrictions, the Act permits polygraph (a type of lie detector) tests to be administered to certain job applicants of security service firms (armored car, alarm, and guard) and of pharmaceutical manufacturers, distributors and dispensers.

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I had the honor of representing the National Association of Professional Background Screeners (NAPBS) along with 20 other colleagues from the screening industry on their annual Washington DC lobbying event.  We had a busy schedule of meetings over a two day time period highlighted by sessions with the EEOC, FTC and officers of our nation’s senators and congressmen.

We met with staffers from the following legislators: Senator Chuck Grassley (Republican-Iowa), Senator Kay Bailey Hutchison (Republican-Texas), Senator Mark Warren (Democrat- Virginia), Congressman Sam Johnson (Republican-Texas), Congressman Rodney Frelinghuysen (Republican- New Jersey), Senator Charles Schumer (Democrat- New York), Sentor Orrin Hatch (Republican- Utah), Senator Kay Hagan, Democrat, North Carolina, Senator Arlen Specter (Republican- Pennsylvania), Congressman Lamar Smith (Republican- Texas), Senator Byron Dorgan (Democrat- North Dakota), Senator Patrick Leahy (Democrat- Vermont), Congressman James Moran (Democrat- Virginia), Senator John Kerry (Democrat- Massachusetts), Senator Dianne Feinstein (Democrat- California), Senator Benjamin Cardin (Democrat- Maryland), Senator John Ensign (Republican- Nevada) and Senator Johnny Isakson (Republican- Georgia).  Our meetings primarily focused on three core issues which are being addressed in upcoming legislation:

Senate  Bill 163 (Child Protection Improvements Act of 2009)- Calls for the development of a mandatory background screening process for child care givers (day care, teachers, camps, etc.).  As an industry, we fully support this legislation.  However, we have concerns about the type of background check that the bill calls for, particularly its reliance on the FBI Criminal Database and state criminal record repositories.  It is a commonly held misconception that these two resources are the most accurate and reliable resources for conducting background checks.  In reality, there are far more effective methods for determining whether someone has been convicted of criminal activity.  The most thorough, accurate and reliable method being a county criminal record search in all counties where the subject has resided under all names used complemented by a National Criminal Record Search which includes a multi-jurisdictional Sex Offender Registry Search.

Senate Bill 141 and House Resolution 122 (Protecting the Privacy of Social Security Numbers Act of 2009)- This bill is aimed at curbing identity theft and calls for a limitation on how Social Security Numbers can be used in commercial situations.  Such measures include restricting access to public records which contain this information.  There is a provision to protect the continued permissible use of personal identifiers for legitimate purposes such as background screening and our efforts focused around reinforcing the need for this language and educating staffers on the importance for these identifiers.

Extension of E-Verify Program- This internet-based system is operated by the Department of Homeland Security and the Social Security Administration and allows employers to electronically verify the employment eligibility of their employees.  House Resolution 1105 reauthorized the program through 9/30/09 and we support further extension of this important government program.

Meeting with the EEOC

This was a truly enlightening experience.  We met with Carol R. Miaskoff who is an Assistant Legal Counsel for the agency.  Carol shared with us the role of the EEOC and its stance on background checks.  She was very clear that the EEOC did not have a problem with background checks as anexercise proper due diligence.  Where they do take exception is with bright line policies such as “do not hire anyone with a criminal record”.  They believe that such policies would have a disparate impact on minorities.  We spent a great deal of time discussing El v. Septa as it will continue to be an important force in future guidelines on background screening.  At the end of the day, the EEOC wants employers to demonstrate job relatedness, the nature of the offense, whether the candidate was a repeat offender and how long ago the crime was committed.

Meeting with the FTC

I was not there for this meeting but I understand that much of the meeting focused on the privacy issues previously mentioned on SB 141 and HR 122.

I was a truly an enlightening experience which provided much insight into our legislative process.  I am confident that the work we accomplished in just two days will have a positive impact on our industry and on employers that rely on the use of employment background checks.

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