Transcript Board Orientation, January 2009

WELCOME!
SILA VIRTUAL CHAPTER
2ND QUARTER
1
Sila virtual chapter
2nd quarter
• Highlighted Features
–
–
–
–
SILA National Education Conference
SILA Newsletter - 6/28/2013
SILA Discussion Forum
SILA Digest Service
2
Workforce Screening-Navigating New Legislation,
Compliance and the EEOC
Introduction
WELCOME
Workforce Screening
Navigating New Legislation, Compliance and the EEOC
Bon Idziak
CEO, Applicant Insight, Inc.
Chairman, HR-XML Consortium
Co-Chair, NAPBS Government Relations
BOD, SAPAA Substance Abuse Program Administrators Assn
4
Applicant Insight Inc.-Confidential 2013
Legal Notice
DISCLAIMER
This presentation does not constitute legal advice or guidance.
Consult your own legal counsel regarding any questions of law
or how the topics discussed apply to you and the unique needs
within your organization.
Applicant Insight Inc.-Confidential 2013
5
Presentation
Presentation Topics
• Consumer Financial Protection Bureau-FCRA
• EEOC Guidance on the Use of Criminal Records
• End User Responsibilities
• Statewide Legislative Efforts
6
Applicant Insight Inc.-Confidential 2013
CFPB
•
The Consumer Financial Protection Bureau (CFPB) is the federal agency that holds primary
responsibility for regulating consumer protection with regards to financial products and services in
the United States
•
The jurisdiction of the bureau includes banks, credit unions, securities firms, payday lenders,
mortgage-servicing operations, foreclosure relief services, debt collectors and other financial
companies, and its most pressing concerns are mortgages, credit cards and student loans. It was
designed to consolidate employees and responsibilities from a number of other federal regulatory
bodies, including the Federal Reserve, the Federal Trade Commission (FCRA), the Federal Deposit
Insurance Corporation, the National Credit Union Administration and even the Department of
Housing and Urban Development.
•
The bureau is an independent unit located inside and funded by the United States Federal
Reserve, with interim affiliation with the U.S. Treasury Department. It writes and enforces bank
rules, conducts bank examinations, monitors and reports on markets, as well as collects and tracks
consumer complaints.
7
Applicant Insight Inc.-Confidential 2013
CFPB
The following forms and documents have been revised to include the CFPB identity and contact
information. Effective January 1, 2013
•
•
•
•
A Summary of Your Rights Under the Fair Credit Reporting Act
Remedying the Effects of Identity Theft
Notice to Users of Consumer Reports: Obligations of Users Under the FCRA
Notice to Furnishers of Information: Obligations of Furnishers Under the FCRA
8
Applicant Insight Inc.-Confidential 2013
CFPB
A Summary of Your Rights Under the Fair Credit Reporting Act
•
•
•
Provided to Consumers as a component of the Disclosure Notice, Acknowledgement and
Authorization for Consumer Reports, and in the event of Adverse Action
Details the “Rights” of a Consumer as afforded by the Fair Credit Reporting Act
Provided by End-User and/or Consumer Reporting Agency acting on behalf of End-User
9
Applicant Insight Inc.-Confidential 2013
10
Applicant Insight Inc.-Confidential 2013
CFPB
Remedying the Effects of Identity Theft
•
•
•
Provided to Consumers who claim to be a victim of Identity Theft
Details the “Rights” of a Consumer as afforded by the Fair Credit Reporting Act
Provided by Consumer Reporting Agency and/or End-User
11
Applicant Insight Inc.-Confidential 2013
12
Applicant Insight Inc.-Confidential 2013
CFPB
Notice to Users of Consumer Reports: Obligations of Users Under the FCRA
•
•
•
Provided to End-Users who utilize Consumer Reports
Details the “Legal Obligations” of an End-User as outlined in the Fair Credit Reporting Act
Provided by Consumer Reporting Agency
13
Applicant Insight Inc.-Confidential 2013
14
Applicant Insight Inc.-Confidential 2013
CFPB
Notice to Furnishers of Information: Obligations of Furnishers Under the FCRA
• Provided to Furnishers of Information to Consumer Reporting Agencies
• Details the “Responsibilities” of a Furnisher of Information as outlined in the Fair Credit
Reporting Act
• Provided by Consumer Reporting Agency
15
Applicant Insight Inc.-Confidential 2013
16
Applicant Insight Inc.-Confidential 2013
Equal Employment Opportunity
Commission
The Equal Employment Opportunity Commission's (EEOC) new Enforcement Guidance on
Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil
Rights Act of 1964 passed by a 4-1 vote of the EEOC’s Commissioners on April 25, 2012.
http://www.eeoc.gov/eeoc/newsroom/index.cfm
Commissioners
Chair Berrien
Commissioner Lipnic
Commissioner Feldblum
Commissioner Barker
Commissioner Ishimaru -left commission after vote. Now is Commissioner Yang.
17
Applicant Insight Inc.-Confidential 2013
EEOC: What is Title VII?
The EEOC enforces Title VII of the Civil Rights Act of 1964 which prohibits employment
discrimination based on race, color, religion, sex or national origin. The Guidance is issued
as part of the Commission’s efforts to eliminate unlawful discrimination in employment
screening, for hiring or retention, by entities covered by Title VII, including private
employers as well as federal, state, and local governments.
18
Applicant Insight Inc.-Confidential 2013
EEOC: E-Race

E-Race
This new guidance is part of the EEOC’s E-Race (Eradicating Racism and Colorism in Employment)
Initiative which addresses the “21st century manifestations of discrimination” under Title VII of
the Civil Rights Act of 1964.
In 2011 alone, 50,060 charges of discrimination alleging race/color/national origin-based
discrimination were filed with the EEOC, which accounted for 50% of the charges filed that year.
http://www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm
•
Disparate Impact & Discrimination Concerns
“Arrests and incarceration rates are particularly high for African American and Hispanic men.
African Americans and Hispanics are arrested at a rate that is 2 to 3 times their proportion of the
general population. Assuming that current incarceration rates remain unchanged, about 1 in 17
White men are expected to serve time in prison during their lifetime; by contrast, this rate
climbs to 1 in 6 for Hispanic men; and to 1 in 3 for African American men.”
19
Applicant Insight Inc.-Confidential 2013
EEOC: The Guidance

Ban the Box
As a best practice, the EEOC recommends employers not ask about convictions on applications. If
made, they should be job-related.

Arrest Records
The fact of an arrest does not establish that criminal conduct has occurred, and an exclusion
based on an arrest, in itself, is not job related and consistent with business necessity. However,
an employer may make an employment decision based on the conduct underlying an arrest if the
conduct makes the individual unfit for the position.

Pending Cases
The Guidance does not contemplate the difference between arrest records and pending cases.
20
Applicant Insight Inc.-Confidential 2013
EEOC: The Guidance

Criminal Histories
The new Guidance takes a deeper dive into the factors originally set forth in the EEOC Policy
Statement on the Issue of Conviction Records Under Title VII and adds some additional elements
to be considered.

Individualized Assessment
The EEOC recommends that an “individualized assessment” could help employers avoid Title VII
liability.
− Further, as stated by Commissioner Lipnic in her opening remarks
at The Hearing, “when particular criminal history will be so manifestly
relevant to the position in question that an employer can lawfully screen
out an applicant without further inquiry…”
21
Applicant Insight Inc.-Confidential 2013
Three Point Consideration

The nature and gravity of the offense or offenses
Evaluating the harm caused, the legal elements of the crime, and the classification, i.e.,
misdemeanor or felony.

The time that has passed since the conviction and/or completion of the sentence
Looking at particular facts and circumstances and evaluating studies of recidivism.

The nature of the job held or sought
Requires more than examining just the job title, but also specific duties, essential functions, and
environment.
22
Applicant Insight Inc.-Confidential 2013
The Individualized Assessment
The EEOC recommends the following when making
an Individualized Assessment:








The facts or circumstances surrounding the offense or conduct
The number of offenses for which the individual was convicted
Age at the time of conviction, or release from prison
Evidence that the individual performed the same type of work, post conviction, with
the same or different employer with no known incidents of criminal conduct
The length and consistency of employment history before and after the offense or
conduct
Rehabilitation efforts, e.g, education/training
Employment or character references and any other information regarding fitness for
the particular position
Whether the individual is bonded under a federal, state, or local bonding program
23
Applicant Insight Inc.-Confidential 2013
The Guidance & Other Laws
•
Compliance with “federal laws and regulations” disqualifying individuals from certain occupations
is a defense to charges of discrimination.
•
Denying employment based on an individuals failure to obtain a federal security clearance, if the
clearance is required for the job is a defense to charges of discrimination.
•
Compliance with local and state laws and regulations will NOT protect an employer from Title VII
liability due to the Title VII pre-emption of state and local laws. Employers should further
evaluate with counsel if attempting to use this defense to charges of discrimination.
24
Applicant Insight Inc.-Confidential 2013
Non-Legal Opinions
•
End-Users should develop a narrowly tailored policy and conduct a thorough review of their
practices relative to the use of criminal records in hiring and/or retention
•
End-Users should evaluate their application packages and relationships with CRA’s to ensure
compliance with The Guidance
•
End-Users should provide formal training to personnel using criminal records specific to the job
relatedness and individualized assessment components of The Guidance
•
Systems Integrators should evaluate their integrations and raise a red flag to any “blanket”
disqualifications (“fail”) currently being utilized between End-Users and CRA’s.
25
Applicant Insight Inc.-Confidential 2013
Authorizations and Disclosures
Authorization, Disclosure, and Other Documents (CR)
You must provide the following to the applicant per Section 604(b) of the FCRA:
•
A clear and conspicuous written disclosure to the applicant before the report is obtained, in a
document that consists solely of the disclosure, that a consumer report (CR) may be obtained.
•
A document that obtains the applicant’s authorization.
•
A document containing a Summary of Rights under the Fair Credit Reporting Act
•
All applicable supporting state-specific notice documents including, but not limited to:
– Notice Regarding Background Investigation per California Law*
– New York Correction Law Article 23-A*
– Notice Regarding Credit Checks per Vermont Law* if ordering credit check
26
Applicant Insight Inc.-Confidential 2013
27
Applicant Insight Inc.-Confidential 2013
Applicant Insight Inc.-Confidential 2013
28
29
Applicant Insight Inc.-Confidential 2013
30
Applicant Insight Inc.-Confidential 2013
Adverse Action Requirements
You Must Notify Consumers When Adverse Actions Are Taken
The term "adverse action" is defined very broadly by Section 603. "Adverse actions" include all
employment actions affecting consumers that can be considered to have a negative impact as
defined by Section 603(k) of the FCRA – such as denying employment or promotion.
If you take any type of adverse action as defined by the FCRA that is based in whole or in part on
information contained in a consumer report provided by a CRA Section 615(a) requires the user to
notify the consumer.
Under the FCRA, no adverse actions can be taken by an employer against an applicant or employee
until the pre-adverse process and dispute notification time period has passed.
31
Applicant Insight Inc.-Confidential 2013
Pre-Adverse Action
Pursuant to section 604(b)(3) of the FCRA, before taking an adverse action, you must send or initiate a
Pre-Adverse Action Notice to the applicant including:
•
•
•
•
•
•
•
A pre-adverse action notice letter including CRA contact information and website
A statement that CRA is not involved in making the potential adverse decision and is not able to
explain why the decision was made
An opportunity to engage the Consumer in the EEOC’s recommended “Individualized Assessment”
A statement setting forth the applicant’s right to dispute directly with CRA the accuracy or
completeness of any information provided by CRA
A copy of the report
A copy of the applicant’s Summary of Rights under the Fair Credit Reporting Act
All applicable supporting state-specific notice documents including, but not limited to:
–
–
–
–
–
Notice Regarding Background Investigation per California Law*
Notice Regarding Credit Checks per Vermont Law* if ordering credit check
New York Correction Law Article 23-A* - only if there is a NY criminal record
A Summary of Your Rights Under New Jersey Law*
Your Background Check Policy for MA* - only necessary if there is a criminal record in MA
• Information concerning the Process for Correcting A Criminal Record in MA
32
Applicant Insight Inc.-Confidential 2013
33
Applicant Insight Inc.-Confidential 2013
Pre-Adverse Action: Dispute
Re-Investigation Under Pre-Adverse Action
As part of Pre-Adverse Action, the applicant has the right to dispute directly with CRA the accuracy of
any information contained in the Consumer Report (CR) or Investigative Consumer Report (ICR)
pursuant to section 611(a)(1)(A) of the FCRA.
•
The dispute and reinvestigation process is contingent upon a consumer contacting CRA directly
within a “reasonable” period time (undefined, but commonly interpreted as 5-10 business days).
Generally, the re-investigation must be resolved within 30 days of notification, with 1 minor
exception regarding an extension allowance for applicant-provided information. The most
common resolutions are (1) verification of original results, (2) an edit or correction of the original
result, and (3) removal of the item altogether if unverifiable. The re-investigation is conducted
free of charge, and upon resolution, multiple notification requirements must be satisfied by CRA
pursuant to the FCRA. Based on the results of the re-investigation, the employer must make the
decision to proceed with the hiring process or to initiate final Adverse Action.
•
If the applicant does not file a dispute in response to the Pre-Adverse Notice within a “reasonable”
period time (see above), Adverse Action can be initiated and the proper notices can be sent.
34
Applicant Insight Inc.-Confidential 2013
Adverse Action
A Section 615(a) Adverse Action Notice should be sent only after the pre-adverse action is taken and
after allowing “a reasonable opportunity to dispute with the CRA any information on which the
employer relied” (interpreted as 5-10 business days). The notification must be done in writing and
must include the following:
•
•
•
•
•
•
An adverse action notice letter including CRA contact information and website
A statement that CRA did not make the adverse decision and is not able to explain why the
decision was made
A statement setting forth the applicant’s right to obtain a free disclosure of the
applicant/consumer's file from CRA if the applicant makes a request within 60 days
A copy of the report
A copy of the applicant’s Summary of Rights under the Fair Credit Reporting Act
All applicable supporting state-specific notice documents including but not limited to:
•
•
•
•
•
Notice Regarding Background Investigation per California Law*
Notice Regarding Credit Checks per Vermont Law* if ordering credit check
New York Correction Law Article 23-A* - only if there is a NY criminal record
A Summary of Your Rights Under New Jersey Law*
Your Background Check Policy for MA* - only necessary if there is a criminal record in MA
•
Information concerning the Process for Correcting A Criminal Record in MA
35
Applicant Insight Inc.-Confidential 2013
36
Applicant Insight Inc.-Confidential 2013
37
Applicant Insight Inc.-Confidential 2013
Applicant Insight Inc.-Confidential 2013
38
39
Applicant Insight Inc.-Confidential 2013
Adverse Action: Other
Additional documents to provide upon applicant request:
*
•
Remedying the Effects of Identity Theft
•
A Summary of Rights Under Oregon Law*
•
A Summary of Your Rights Under Washington Law*
Please note the laws and regulations in some states are unclear pertaining to whether or not the applicant
resides in the state, the company is headquartered in the state, or if the company is conducting business within
the state. The suggested best practice is to provide all documents above to all applicants, each time. This
should be your company’s individual determination. If you decide to provide or have your CRA provide forms
on only certain occasions (when a resident of a particular state, etc.), guidelines will have to be established to
set the ground rules for this process and we recommend you consult your Legal Counsel for further guidance.
40
Applicant Insight Inc.-Confidential 2013
41
Applicant Insight Inc.-Confidential 2013
42
Applicant Insight Inc.-Confidential 2013
Restrictions on the Use of Credit Reports
Current Restrictions
•
In the last few years, 8 states have passed laws which, subject to few exceptions, regulate and/or
ban employers' ability to use credit information in making employment decisions. The states are:
o CA, CT, HI, IL, MD, OR, VT, WA
•
Colorado becomes the ninth after signing the “Employment Opportunity Act,” Colo. Rev. St 8-2126, which goes into effect on July 1, 2013.
•
Nevada will become the tenth after signing SB 127, an amendment to Chapter 613: Employment
Practices of the Nevada Revised Statutes. This law goes into effect on October 1, 2013
•
Additionally, 13 states are currently considering legislation that would limit the use of credit
reports when making employment decisions. Those states are:
o FL, GA, IN, KY, MI, MO, MT, NE, NJ, NM, OH, PA, TX
•
There are also 2 additional states that have recommended guidance on record:
o LA, MN
•
That leaves only 25 states and the District of Columbia without active or pending credit report use
legislation or guidance
43
Applicant Insight Inc.-Confidential
This informational webinar has been provided to members of
the Securities & Insurance Licensing Association.
This document remains the property of Applicant Insight, Inc.
and is provided for reference and the convenience of SILA
Members and should be treated confidentially.
Applicant Insight Inc.-Confidential 2013
44
Thank you for Attending!
Bon Idziak
(800) 771.7703
[email protected]
Applicant Insight Inc.-Confidential 2013
45