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Immigration Compliance and Background Screening

FTC Comments and Background Screeners

Posted in Background Check, FTC

I recognize this is a few days late, but the content is still timely.  Last month I attended the NAPBS Mid-Year Conference in Washington, DC both as an attendee and speaker. One session of particular interest to me was Maneesha Mittal’s presentation.  Maneesha is the Associate Director of the Division of Privacy and Identity Protection at the Federal Trade Commission (FTC).  Her team is the team that would bring an enforcement action against a background screening company for non-compliance under the Fair Credit Reporting Act (FCRA).

Below are the take-away points I found most helpful for purposes of my day to day practice advising background screening companies on their compliance with the FCRA:

  • Reasonable security of data – Maneesha stressed the importance of “knowing your customer” when transacting with them and provided examples of companies who failed to maintain appropriate data security through reasonable procedures, and failed to ensure a permissible purpose to the reports (e.g., ACRAnet, Inc., SettlementOne Credit Corporation, Statewide Credit Services).
  • The FCRA applies equally to social media when used for background screening purposes and she gave as examples the FTC letter to Social Intelligence Corporation and the ongoing Spokeo v. Robins case.  For the Spokeo case, note that the U.S. Supreme Court granted cert. and will take up this important case next year.  The Spokeo case goes to the issue of whether a plaintiff has to show actual injury in fact in order to have Article III standing, or whether a mere violation of the statute is sufficient to bring suit.  Let’s hope the former and not the latter.
  • Companies cannot disclaim liability under the FCRA and then proceed to sell information to employers which could be used for background screening purposes.  As an example she cited the settlement against Filiquarian Publishing LLC, Choice Level LLC and their CEO for alleged failure to ensure that the information they sold was accurate and could only be used for a permissible purposes.   In this matter, the maker of the mobile app claimed that users could use the app to conduct criminal background searches on individuals but used disclaimers stating that they were not FCRA complaint and that the products should not be used for employment screening purposes.
  • Accuracy of the reports – reports with multiple entries listing the same offense are not acceptable. Basically, a data dump is not acceptable as it does not comply with the FCRA requirement to maintain maximum possible accuracy.  As an example she cited the HireRight Solutions enforcement action and settlement.
  • Consumer disclosures — have adequate staff to respond to consumer requests for their reports.
  • Use of section 603(y) of the FCRA as a defense to litigation is on the rise.  It is the FTC ‘s opinion that this section of the FCRA, which relates to investigations of suspected employee misconduct, is only intended to cover current employees and not job applicants.  Stay tuned for potential guidance from the FTC on this point.
  • U.S. based background screening companies doing background checks on international employees – the FCRA would apply.
  • Regarding the amicus brief in Moran v. The Screening Pros tied to section 605 of the FCRA and the obsolescence rule for dismissals, this is an FTC “opinion” and not just a staff view as the Commission approved the FTC’s participation in the amicus brief.

Update — New York City Prohibition on Requests or Use of Credit History for Employment Screening

Posted in Background Check, Credit Reports

This week New York City Mayor Bill de Blasio will hold on hearing on New York City’s Proposed Int. No. 261-A, which would ban the use of consumer credit history, making its use potentially an unlawful discriminatory practice. Certain exceptions apply to the general prohibition on an employer, or their agent’s, request or use for employment purposes of consumer credit history of a job applicant or employee.  The bill’s definition of “consumer credit history” limits the ban or prohibition to information found in consumer credit reports, a credit score or information provided by the individual.

Impact on Background Screening Companies

Background screening companies should pay special attention to the fact that the proposed legislation will not be limited to employers, but specifically applies the prohibition to “agents” who request consumer credit history of an applicant for employment or an employee.

Exceptions to the General Ban on the Use of Credit History

Certain exceptions to the prohibition on requesting or using credit history for employment include:

  • When an employer, or agent, is required by state or federal law or regulations or by a self-regulatory organization to use an individual’s consumer credit history for employment purposes; or
  • For persons applying for positions or employed in: law enforcement, positions of public trust, where bonding or a security clearance is required, positions involving fiduciary responsibilities and others.

There appears to be ambiguity with respect to how broad an employer can interpret the employer exception in proposed Section 8-107, subdivision 24, which states that the general prohibition on use of consumer credit history for employment purposes does not apply when “(1) an employer, or agent thereof, that is required by state or federal law or regulations or by a self-regulatory organization as defined in section 3(a)(26) of the securities exchange act of 1934, as amended to use an individual’s consumer credit history for employment;”.  This author’s view is that this exception to the general prohibition on credit history is only for those individual’s for whom such is required by state or federal or law.  Meaning it is individual specific and not meant to broadly exempt an employer if they have even one job applicant or employee for whom state or federal law requires a background check which includes credit history.

Upcoming Hearing

On May 6, the mayor (who is expected to sign the legislation) will hold a hearing on the proposed legislation.  Click here and then on “Legislation Details” for notice of the hearing.  No further information regarding the hearing has been provided.  Therefore, to be clear, New York City’s ban on the use of consumer credit history for employment screening purposes is not yet in effect.

Law Citation and Effective Date

The title of the bill is the “Stop Credit Discrimination in Employment Act”, and if signed by the mayor, the law would take effect 120 days after enactment. It would amend New York City’s Human Rights Law, sections 8-102 and 8-107 of the administrative code of the city of New York.


Ban the Box and Background Screening Webinar

Posted in Background Check, Criminal History Records

Last week I posted a blog entry about a presentation I was doing at the NAPBS Mid-Year Conference (click here).  If you weren’t able to attend our session or the conference, no worries as the session is available in webinar format thanks to ClearStar.  The title of the free webinar is: Ban the Box Measures and their Impact on Background Screeners and Employers.

My colleague Henry Perlowski and I will be co-presenters.  Henry and I co-chair Arnall Golden Gregory’s Background Screening Practice Group.  The session will cover Ban the Box measures at the state and federal level and the impact of these measures on background screeners and employers who conduct background checks. Topics discussed will include who (public/private) is affected by these measures; the onboarding and job application process; and what, when, and where multistate companies can ask questions about criminal arrests and convictions. The session will cover federal/EEOC guidance and state and local requirements and potential discriminatory concerns associated with considering criminal arrest and conviction records in the hiring process.

Employers — if you have a box on your job application inquiring about the applicant’s criminal history and asking them to answer “yes” or “no” as to whether they have been arrested or convicted of a crime, this webinar is for you.

We hope you will join us.  Click here to register for this webinar which will be held April 29th at 2 pm EST.

NAPBS Conference Attendees

Posted in Background Check, Criminal History Records

If you are attending the NAPBS Mid-Year Legislative and Regulatory Conference in Washington, DC please join me and my colleague Henry Perlowski for our Monday afternoon session — Ban the Box Measures and their Impact on Background Screeners and Employers.

Henry and I co-chair Arnall Golden Gregory’s Background Screening Practice Group.  This session will cover Ban the Box measures at the state and federal level and the impact of these measures on background screeners and employers. Topics discussed will include who (public/private) is affected by these measures; the onboarding and job application process; and what, when, and where multistate companies can ask questions about criminal arrests and convictions. The session will cover federal/EEOC guidance and state and local requirements and potential discriminatory concerns associated with considering criminal arrest and conviction records in the hiring process.

Also, earlier in the day my colleague Kevin Coy will participate on a panel entitled, How “Safe” is the EU U.S. Safe Harbor Program.  Which will focus on the European Union/U.S. Safe Harbor Program which is one means that can be used by background screeners and others to transfer personal information from the European Union and certain other countries to the United States. This session will provide an overview of the Safe Harbor program and its requirements; discuss the Federal Trade Commission’s role in the enforcement of Safe Harbor; and provide an update on the status of negotiations between the EU and the Department of Commerce over the future of the Safe Harbor program.

FTC-EEOC Publication for Employment Screening

Posted in Background Check, FTC

The Federal Trade Commission (FTC) has issued an updated guide for employers regarding compliance with the federal Fair Credit Reporting Act (FCRA) when conducting background checks, as well as the Equal Employment Opportunity Commission’s (EEOC) guidance on the use of criminal history records for employment screening under Title VII of the Civil Rights Act of 1964.  Read more here.

The publications featured by the FTC are the following:

Given the amount of private litigation in this space, which I have previously discussed on this blog many times, including here and here, employers should be mindful of both the FCRA and EEOC guidance when conducting employment-related background checks.  In addition, there are state consumer protection statutes that employers should be aware of.  All of which can be successfully navigated if using the services of a reputable background screening company and working with experienced counsel.  At Arnall Golden Gregory we are happy to assist with such.


Free Webinar on Background Checks and the FCRA

Posted in Background Check

Join me for a webinar on April 8th related to background screening, during which I will be speaking with others on legal issues related to background screening.  The title of this free webinar is, “Background Checks and the Fair Credit Reporting Act: Key Issues for North American Employers” and is sponsored by the Employment Law Alliance.  Click here to read more about the webinar and to register.   The webinar is geared toward in-house counsel, human resources professionals and corporate executives and business owners.



GAO Releases Report on Criminal Background Checks for Employment

Posted in Background Check, Criminal History Records

Yesterday the Government Accountability Office (GAO) released a report on the use of criminal background checks (GAO-15-162) tied to a congressional request.  The title of the report is, “Criminal History Records – Additional Actions Could Enhance the Completeness of Records used for Employment-Related Background Checks”.

The GAO report sought to address “to what extent (1) states conduct FBI record checks for selected employment sectors and face any challenges; (2) states have improved the completeness of records, and remaining challenges that federal agencies can help mitigate; and (3) private companies conduct criminal record checks, the benefits those checks provide to employers, and any related challenges.”  This blog will focus on what the report says about private background screening companies.  Specifically the GAO report found that:

  • The use and number of private companies conducting criminal record background checks for employment screening appears to be increasing because of employer demand;
  • Both the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) are responsible for enforcing provisions of the Fair Credit Reporting Act (FCRA) which are applicable to background screeners, as they are considered “consumer reporting agencies” under the FCRA;
  • According to FTC officials, from FY 2009 – 2014, the “FTC settled 16 complaints against private background screening companies and employers for alleged FCRA violations” and of the 16 complaints, 4 included allegations related to the use of criminal history information for employment purposes (See page 35 of the report);
  • CFPB officials noted that “they have not received many consumer complaints regarding the use of criminal history records in employment background checks” (See page 35 ofthe report); and
  • Private background screening companies generally conduct name-based checks as opposed to fingerprint-based checks, which according to the report, can “decrease the accuracy of the information that the check produces.”  However, use of additional identifiers, such as date of birth, can help mitigate accuracy concerns (See page 38 of the report).

The report concludes on page 39 by saying that “employers’ increasing use of criminal history record checks to determine applicants’ suitability for employment, licensing, or volunteering underscores the need for accurate and complete criminal records–including the final disposition of any criminal charges–and assurances that applicants have an opportunity to challenge or correct potentially inaccurate records.”  The report lays out three recommendations for executive action involving the FBI and states, and those are listed on page 40 of the report.

Employer Fined $227,000 for Form I-9 Violations for Remote Employees

Posted in Department of Homeland Security, Form I-9, ICE Enforcement Actions

A national staffing company has been fined $227,000 in civil fines for improperly completing the Forms I-9 for its remote hires.  This despite the fact that Immigration and Custom’s Enforcement (ICE) determined that all employees were legally authorized to work in the United States.   According to a press release by the company, the reason for the fine lies in the fact that the wrong person signed the I-9 forms.   Again, according to a company press release, this was how they completed Forms I-9 for remote hires.  Which, as I will explain later, was not properly done and hence why the company was fined:

Prior to the government’s notifying ESSG of any problem with its employment verification process and because of ESSG’s nationwide sprawl, the company confirmed new employees’ identity via an on-site agent who examined applicants’ documentation for authenticity. Once confirmed, the agent faxed color copies of the documents to company headquarters, where ESSG staff completed and signed the mandatory I-9 forms and again confirmed employees’ authorization with the advanced electronic verification system (E-Verify) used by more than 500,000 companies in the U.S.

The government objected to ESSG’s process, claiming the law requires the same person who views the applicant’s original documents must complete and sign the I-9, and disregarded ESSG’s voluntary use of E-Verify.  Despite the judge’s decision in favor of the government, ESSG is standing its ground and preparing an appeal.”

This practice is described in the OCAHO judge’s order as well.  Namely that an off-site agent of ESSG examined the original documents, copied them and sent them to ESSG in Minnesota where a payroll administrator completed section 2 of the Form I-9 by working off the photocopies.  Turns out the government is right in saying the I-9s were improperly completed.

The regulations at 8 C.F.R. §§ 274a.2(a)(3) and (b)(1)(ii)(A) – (B) clearly state that the individual who examines the original document(s) presented by the employee who completes section 1 must be the same person who completes section 2.  There must be a physical inspection of the document(s) presented for I-9 purposes  AND the person reviewing them must be the person who completes section 2.  No exceptions for remote hires.  Putting aside the reality that this does not allow employers to leverage technology (like Skype) and that it seems like an archaic requirement in the 21st century … truth is that is the law.  Section 2 also includes an affirmative attestation in which the person completing the section states, under penalty of perjury, that they have examined the document(s), they appear to be genuine and relate to the individual presenting them.  This requires a tactile review of the documents.

The judge’s conclusions of law were, among others, that:

  • Failure to review an individual’s original documents before signing section 2 of the Form I-9 constitutes a failure to properly complete section 2 of the I-9 in violation of 8 C.F.R. § 274a.2(b)(1)(v); and
  • Section 2 of the I-9 is properly completed only when the person who signs the section 2 attestation is the same person as the person who examines the employee’s original documents.

In total, the judge found that 243 employees listed in the Notice of Intent to Fine fell under the employer’s incorrect I-9 practices for remote hires.  The judge found no “compelling reason” to adjust the penalties set by the government (and Judge Thomas usually does).  ICE set the penalties “for the false attestations in section 2 of the I-9s” for the 242 employees at $935 each.

To read the Final Decision and Order in United States v. Employer Solutions Staffing Group II, LLC (OCAHO Case No. 14A00005) click here.

If you are a company with remote hires and would like to discuss your practice please contact me at Arnall Golden Gregory LLP.

Pennsylvania Youth Serving Organizations, Volunteers and Background Checks

Posted in Background Check, Criminal History Records

Take note of a new law (H.B. 435) effective this year in Pennsylvania which requires a criminal history background check for volunteers seeking to serve with youth serving organizations.

Legislative History

H.B. 435 was introduced in the House of Representatives on February 11, 2013 and was referred to the Committee on Children and Youth. The bill was unanimously passed as amended by the House on June 24, 2013 by a vote of 197-0. In the state Senate, the bill was referred to the Committee on June 28, 2013.  H.B. 435  was reported out of the Committee on October 6, 2014, after the Committee made substantial amendments.  The bill was subsequently passed unanimously (50-0) on October 8, 2014. After the House concurred in the Senate-passed amendments (175-18), Governor Tom Corbett signed H.B. 435 into law as Act No. 153. The read the final act click here.

Summary of Act 153

Act 153 amends Pennsylvania’s Child Protective Services Law, 23 Pa.C.S. § 6301 et seq., to expand background check and clearance requirements to include volunteers who will have contact with children (among other changes applicable only to adoptive and foster parents). Subsections 6344.2(a)-(b), as amended, requires “employers, administrators, supervisors or other persons responsible for selection of volunteers” who will be “responsible for the welfare of a child or having direct contact with children” to require volunteer applicants to submit documents which prove that they meet background clearance requirements before they begin volunteering. Specifically, a volunteer applicant for a position that will involve working with children is required to provide:

  1. A report of criminal history record information from the Pennsylvania State Police or a statement from the Pennsylvania State Police that the State Police central repository contains no such information relating to that person;
  2. A certification from the department of public welfare as to whether the applicant is named in the statewide database as the alleged perpetrator in a pending child abuse investigation or as the perpetrator of a “founded report or an indicated report” of child abuse; and
  3. A federal criminal history record report obtained by providing a full set of fingerprints to the Pennsylvania State Police to obtain an FBI records check.

23 Pa.C.S. § 6344(b)(1)-(3).

The third requirement, the FBI background check, is waived where the volunteer applicant has been a resident of Pennsylvania for the last ten (10) years, seeks to serve in an unpaid position, and swears or affirms, in writing, that he or she has not been convicted of one or more of the 20 disqualifying crimes listed in 23 Pa.C.S. § 6344(c)(2), which generally include homicide, assault, stalking, kidnapping, sexual offenses, prostitution or child endangerment (and similar crimes). 23 Pa.C.S. § 6344.2(b.1)(1).


A volunteer applicant is disqualified from working with children if they:

  • Have been named in the statewide database as the perpetrator of a founded report of child abuse within the last five years (23 Pa.C.S. § 6433(c)(1));
  • If they have been convicted of a felony offense under the Controlled Substance, Drug, Device and Cosmetic Act, 35 P.S. § 780-101, et seq, within the last five years (23 Pa.C.S. § 6344(c)(3)); or
  • If they have ever committed one of the designated crimes listed in 23 Pa.C.S. § 6344(c)(2), which generally include homicide, assault, stalking, kidnapping, sexual offenses, prostitution or child endangerment (and similar crimes) (23 Pa.C.S. § 6344.2(b.1)(2)).

Recertification and Self-Reporting

Effective July 1, 2015, all volunteers having contact with children must obtain the required certifications required by Section 6344.2(b) every thirty-six (36) months. 23 Pa.C.S. § 6344.4 (2). Additionally, if a volunteer who works with children is arrested for or convicted of a disqualifying event, he or she must notify the administrator of the organization’s volunteer program within 72 hours. 23 Pa.C.S. § 6344.3(g)(1). If the administrator suspects that a volunteer who works with children has been arrested for or convicted of a disqualifying offense, they must require the volunteer to re-certify, the cost of which re-certification must be borne by the organization. 23 Pa.C.S. § 6344.3(g)(2).

Transferability and Provisional Clearance

A volunteer who has been cleared to work with children can transfer or provide services to another subsidiary or branch without recertification. 23 Pa.C.S. § 6344.3(f)(1). However, a volunteer must re-certify prior to volunteering to work with children for another organization, agency, or institution. 23 Pa.C.S. § 6344.3(f)(2). Volunteers who have not yet been cleared pursuant to the procedures described above may serve on a provisional basis for a single period not to exceed thirty (30) days if the volunteer is in compliance with the clearance requirements of the jurisdiction where the volunteer is domiciled. 23 Pa.C.S. § 6344.2(f).

Penalties for Noncompliance

It is extremely important that youth serving organizations ensure that they are in compliance with these new requirements, as the penalties for noncompliance are severe. Specifically, any employer, administrator, supervisor or other person responsible for the selection of volunteers who intentionally fails to comply with the law may be found guilty of a third degree misdemeanor, which is punishable by a fine or up to a year in state prison or county jail.

President’s Executive Order Halted

Posted in Department of Homeland Security

President Obama’s executive order on immigration has been halted by a federal judge in Texas. U.S. District Judge Andrew Hanen granted a temporary injunction to allow the government, and the 26 states challenging the President’s executive order issued in November of last year, time to prepare and present arguments to the court on the merits.

What does this mean?  Two key components of the President’s executive action on immigration included expanding the Deferred Action for Childhood Arrivals (DACA) program and creating a new program for parents of U.S. citizens or lawful permanent resident children called DAPA, or Deferred Action for Parents of Americans and Lawful Permanent Residents.  Those have been halted, or enjoined, by District Judge Hanen until the courts hear arguments on the legal issues and rule accordingly.

The Obama administration will likely appeal the decision to the U.S. Court of Appeals for the 5th Circuit, but this is a serious road block to implementation of DACA.  Tomorrow (February 18th), U.S. Citizenship and Immigration Services was to begin accepting applications under the expanded DACA program, which would grant certain individuals unlawfully present a work permit if they meet the eligibility criteria.  The DAPA program was not expected to go into effect until May of this year, but that too is now in jeopardy.  Both programs are intended to grant individuals unlawfully present in the United States with work permits and lawful status in the United States, although not actually granting them any other benefit or right to remain permanently.  DACA and DAPA are both temporary programs that would essentially defer one’s deportation or removal from the United States hence use of the words “Deferred Action” program’s titles.

See Texas v. United States, Case No. 1:14-cv-00254 (2/16/2015) — click here for the Memorandum Opinion and Order

The Copy of the Order of Temporary Injunction enjoins the Department of Homeland Security “from implementing any and all aspects or phases of” an expanded DACA and the new DAPA.