Is Your Background Check Process Compliant?

2 © Copyright 2015 ADP, LLC. Proprietary and Confidential Information. Agenda Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine HR Background Screening Programs Compliance considerations before screening Compliance considerations during and after screening Special Topics Practical Resources

3 HR Background Screening Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine Review current background screening program policies Conduct a privileged review of your background screening program with legal counsel If the screening program polices and procedures are not fully documented, make this a high-priority project Create and implement specific processes to ensure FCRA and state adverse action obligations are detailed and compliant Put policies and procedures in place for confidential information handling and destruction of background reports Document adverse hiring decisions

4 Factors to consider when developing screening programs Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine EEOC guidance on the use of criminal records FCRA regulations Relevance screen matrixes Ban the Box laws State laws on criminal records State laws on credit reports Industry regulated screening requirements

5 Compliance considerations before screening Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine Advertisements & Recruiting Employment Applications Background Check Disclosure and Authorization forms (FCRA) FCRA Certifications

6 Compliance Considerations During Screening Applicant Contact and Communication Develop procedures for handling contact and communication with applicants Limit contact and communication about the results of the background report until it is fully completed 48-Hour Waiting Period vs. FCRA Lawsuit Schedule training for recruiters and hiring managers If your company outsources recruiting functions, ensure you train outsourced recruiters on policies and procedures Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine

7 Compliance Considerations After Screening Discrimination State Laws - Criminal Record Use State Laws – Credit History Use Adverse Action Decisions Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine

Compliance Considerations After Screening Adverse Action –Ensure applicant has copy of report before and taking action (hire, promote, terminate) –Ensure decision makers and procedure designs avoid taking adverse action prior to sending the first adverse notice –Delay final hiring decisions when an applicant disputes the accuracy of the report to allow them time to correct any errors –Ensure recruiters (internal and outsourced) and hiring mangers know proper procedures for communicating final action –Remember that employers are liable for actions taken by contracted and outsourced recruiters

9 Special Compliance Topics Considerations March 2012: EEOC issued an update to its original guidance Background – disproportionate arrest and conviction rates of minorities, incomplete and inaccurate criminal sources, and the increase in use of background checks by employers Guidance focuses on 3 key areas: –Intentional (or "disparate treatment“) Discrimination –Disparate Impact Discrimination –Business Necessity of Background Screening Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine EEOC Guidance on Background Checks

10 Special Compliance Topics Considerations Adopt a "common-sense" and consistent approach Have legal counsel review of criminal screening policies and procedures While the Guidance is not law, employers should still consider the EEOC's complaints filed against employers Revise polices and procedures that automatically eliminate applicants Utilize an individual assessment approach to applicants Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine EEOC Guidance: Employer Take-Aways

11 Special Compliance Topics Considerations Before you request a background check report you must: –Tell the applicant or employee that you might use information in their background report –Get written permission from the applicant or employee –Certify compliance to the company from which you are getting the background report from You must certify that you: –Notified the applicant or employee and got their permission to get a background report; –Complied with all of the FCRA requirements; and –Will not discriminate against the applicant or employee or otherwise misuse the information Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine Disclosure and Authorization Forms

12 Special Compliance Topics Considerations Review sample disclosures/ authorization annually Purge disclosures of extraneous information Separate disclosure and authorization Consider the following challenges: –Functionality of ATS solutions –User experience –State laws Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine Disclosure and Authorization: Employer Takeaways

13 Special Compliance Topics “Ban the Box” (also known as “Fair Chance Policies”) refers to removing the “check box” from employment applications or to move questions about criminal records to later in the hiring process Primary Objectives of “Ban the Box” laws: –Remove barriers to employment to compete for jobs –Require employers to judge applicants on their qualifications, no criminal past –Reduce past offenders from re- offending again by gaining employment Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine

14 Special Compliance Topics Considerations Know the State and Local Laws –No matter where an applicant lives, be aware of the laws that govern the workplaces they support (which may be across states) –EEOC Guidance and “ban the box” go hand-in-hand Review Hiring Policies and Procedures with Legal Counsel –New laws are emerging all the time –Periodic reviews of hiring and screening practices, including job advertisements/applications –Have recruiters and hiring managers go through the hiring process to identify red flags and potential applicant concerns Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine Ban the Box: Employer Takeaways

15 Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine Special Compliance Topics Considerations Educate recruiters and hiring managers In the case of "ban the box," candidates may ask what the company’s policy is on hiring employees with criminal records Train recruiters and hiring managers and make sure they have access to updates and changes Ban the Box: Employer Takeaways

16 Special Compliance Topics Considerations Regulated industry employers have specific regulatory background screening requirements that would prevent hiring applicants with certain criminal records Examples of regulated employers are: –DOT (FMCSA, FAA,) –Healthcare –Financial and banking entities –Casino/gambling –Government contractors If you utilize a CRA for your screening program, ensure there are no gaps in what the CRA offers, searches, and reports back. Do they meet your compliance obligations? Be aware that FCRA compliance places restrictions on CRAs Ensure your screening provider can provide you audit support if needed. Privileged & Confidential. Attorney Client Communication. Subject to the Attorney Work Product Doctrine Regulated Industry Employers: FCRA vs Regulatory Screening

Practical Resources and Tools for developing background screening programs Best practice standards – the proper use of criminal records in hiring EEOC Guidance on the consideration of arrest and conviction records in employment decisions Federal Trade Commission (FTC) and EEOC joint guidance

18 Questions

19 © Copyright 2015 ADP, LLC. Proprietary and Confidential Information. Thank you! 19 Chris Christian Compliance Manager