THE CHANGING FACE OF BACKGROUND CHECKS

How New FCRA Regulations Are Impacting the Process … for Better or for Worse

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There are 4 procedures that must be followed to be compliant with the FCRA:

› End User Certification› Disclosure and Authorization› Pre-Adverse Action› Adverse Action

Procedures Required By the FCRA For SterlingBackcheck Clients

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If the background report does not reveal any disqualifying information, there are no additional obligations, with the exceptions that we just discussed:

Individuals in California, Massachusetts, Minnesota, New Jersey and Oklahoma who requested a copy of the report are provided with a copy of their report.

However, if the report reveals disqualifying information, there are two more steps that must be completed.

Is There Disqualifying Information?

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After receiving the Pre-Adverse Action Letter, an individual has 5 days to contest the results

If an individual contacts SterlingBackcheck within the 5 days, we recommend that the client provide the individual with another 5-10 to allow the re-investigation to be completed

However, these are not per se required periods

Pre-Adverse Action Process

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If the individual does not contest the accuracy of the report within 5 days or does contest the information but the re-investigation confirms

the original findings, the client may take adverse action.

Pre-Adverse Action Process

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A letter is sent with another copy of the Federal Summary of Rights as well as the State specific Summary Of Rights.

Adverse Action

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A class action lawsuit was filed by 60,000 members against a North Carolina Grocery chain who used allegedly illegal background check procedures.

There are two classes in this illegal background check class action lawsuit:

Applicants allegedly failed to receive the required stand-alone disclosure that the grocery chain was going to conduct an employment related background check.

Applicants allegedly failed to receive the required notice before adverse employment action was taken based on the background check.

This class action resulted in a $3 million settlement

Disclosure and Authorization & Adverse Action: Class Action Lawsuit

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Eliminate policies or practices that exclude people from employment based on any criminal record

An employer should not consider an arrest record that did not lead to conviction in making employment decisions

An employer should not have a blanket denial policy base on a conviction record

An employer should conduct an individualized analysis and dialogue in utilizing conviction records in making employment decisions

Equal Employment Opportunity Commission (EEOC): General Guidance

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These laws make it illegal for employers to request, on an “initial written application form,” any information about an applicant’s criminal history

Currently over 15 states and over 100 cities / counties have enacted Ban the box legislation

Ban the Box Laws

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Ban the box legislation will continue to grow Companies should consider removing the criminal conviction question

from their application altogether

Class Action Lawsuits Non-compliant Disclosure and Authorization forms National Criminal Database Records provided by a CRA without

primary source confirmation

Scoring/Rating

Trends in Background Screening

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Not following the Adverse Action process: Pre-Adverse Action Letter A copy of the report Summary of Rights (Federal and State as applicable) Opportunity to dispute Adverse Action Letter

Growing restrictions on the use of credit reports

Trends in Background Screening

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Improved technology reducing turnaround times* Court Direct

Employee monitoring* Employee Risk Alert (ERA) through Locator Select

National Association of Professional Background Screeners* Accreditation

Growth in International background checks

Trends in Background Screening