Senator Warren Introduces Bill Banning Credit Checks Of Job Applicants

[January 8, 2014]  At this time of year when visions of credit card bills dance in our heads, Senator Elizabeth Warren (D-Mass.) has introduced a bill that would ban employers from checking the credit of applicants during the hiring process.  The Equal Employment for All Act would prohibit employers from using credit reports for employment purposes, unless for a national security position or otherwise required by law.

In her floor speech supporting the bill, Senator Warren explained that a bad credit rating is often the result of a personal crisis, and she pointed to research demonstrating that a person’s credit rating has little to no correlation to his or her ability to succeed at work or likelihood to commit fraud.  Other supporters of the bill have argued that credit checks are discriminatory, pointing out that African Americans and Hispanics have considerably lower credit scores than non-Hispanic Whites.

Is this a solution without a problem?  A 2012 survey by the Society for Human Resource Management found that less than half of employers (47 %) conduct employment credit checks.  Only 13% of employers conduct credit checks on all job candidates.  The remaining 34% of employers conduct credit checks only on those candidates applying for sensitive positions, including positions with financial responsibilities, senior executive positions, and positions with access to highly confidential employee information.  For employers who conduct credit checks, most do so only after making a contingent job offer.

If you are in the minority of employers conducting credit checks, we recommend that you stay tuned to this bill, which appears to coincide with the Obama Administration’s renewed focus on income inequality.  We also recommend that you take this opportunity to review your credit-check policy and other background-check practices.

Rhode Island Joins “Ban the Box” Trend: Prohibits Criminal History Inquiries On Employment Applications

[August 7, 2013]  Effective January 1, 2014, Rhode Island will join Massachusetts and other state and local governments in restricting pre-employment inquiries about job applicants’ criminal histories.  In all, ten states (California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, New Mexico, and Rhode Island) and 52 municipalities (including New York, New York, Austin, Texas, and Detroit, Michigan) have passed similar laws and ordinances.

Rhode Island employers will be prohibited from asking in employment applications whether an applicant has ever been arrested, charged with, or convicted of any crime.  Employers also will be prohibited from orally asking job applicants for this information prior to the first interview.

The law applies to public and private Rhode Island employers with four or more workers, with certain exceptions.  For example, pre-interview criminal history questions are permissible for law enforcement agencies.  Other employers may make such inquiries where federal or state law prevents them from hiring persons convicted of a specified crime or where a bond is a job requirement and a prior offense would disqualify an applicant from obtaining such a bond.

Even when employers comply with these “ban the box” laws and request criminal history information only after an initial interview, use of such information poses risks.  The EEOC recently revealed its focus on this issue by filing lawsuits against two large employers, alleging that their use of criminal background checks disproportionately affected African-Americans.  The EEOC issued guidance on the use of criminal checks in 2012, and employers would be wise to review the guidance in light of the EEOC’s recent activity.

We recommend that employers review the EEOC’s 2012 guidance, determine whether the municipalities and states in which they operate have “ban the box” laws, review and revise their job applications and policies for compliance with the laws, and train hiring and recruiting managers on the change.

Employers: Proceed With Caution When Using Background Checks

[June 3, 2013]  The New York Times recently reported on a risky practice involving background checks:  many U.S. retailers are obtaining and using information about applicants’ past admissions of stealing on the job.

The Federal Trade Commission (“FTC”) is cracking down on this practice, examining whether the databases that contain this information comply with the Fair Credit Reporting Act (“FCRA”).  Key concerns include whether the workers are coerced into confessing, and whether they understand what they are signing or how it will be used.

Employers receiving such information as part of a background check should be cautious about using it as the basis for an employment decision.  The risks may greatly outweigh the benefits.

FCRA is being applied to new technology in other ways.  For example, on May 1, 2013, the FTC approved a settlement order in its first FCRA case involving mobile applications (“apps”).  Companies were selling apps that allowed users to access criminal records, without complying with FCRA.  The settlement order requires compliance in the future.

When considering using new hiring tools, employers should always consider whether such use complies with FCRA as well as any applicable state law (see our article about the Massachusetts CORI law here).

Update On The New Massachusetts Fingerprinting Law and Its Potential Impact On Summer Camps Operated by Independent Schools

[February 5, 2013]  Private schools operating summer camps or programs in 2013 will not have to run fingerprint checks on employees and subcontractors, but the rules and regulations will  most likely change by Summer, 2014.

Through communications with the Massachusetts Department of Early Education and Care (EEC), we have learned that regulations implementing the new background check law will likely require private schools operating summer camps to run fingerprint checks on current and prospective employees who may have direct and unmonitored contact with children.  Additionally, such checks will have to be conducted on any individual who regularly provides school-related transportation to children and any subcontractor or laborer commissioned to perform work on school grounds who may have direct and unmonitored contact with children.  The regulations by the EEC and the Massachusetts Department of Elementary and Secondary Education (ESE) are being drafted in time for the start of the 2013-2014 academic year, and thus will not be in effect during the 2013 summer months when camps are in session.

In order to assess whether a summer school or camp program will be covered by the new background check law, private schools must analyze whether the summer activities taking place on their campuses qualify as a “camp” or a “summer program.” Camps are regulated by the Department of Public Health, which is currently not under the purview of the new fingerprinting law (though we believe that it is likely only a matter of time before camps will also be covered).  A “camp” that takes place at a school is considered a camp (and therefore not subject to the new fingerprinting requirements) only if it is incorporated as its own separate entity, with its own staff, and is separately operated from the school, but just happens to use the school facilities for its base of operations.  In that context, the school is considered “closed” for the summer, while the camp is in operation.  On the other hand, “summer programs” that are not separate corporate entities from the school, that take place at the school and are run by school staff, will likely be covered by the forthcoming EEC/ESE regulations implementing the new fingerprinting requirements and will need to comply with this law in the Summer of 2014 and beyond.

As we await the regulations implementing the new fingerprinting requirements, we recommend that schools review the new background check requirements with counsel and devise a practical plan for complying with them.  If you have any questions about policies and procedures for background checks, please do not hesitate to contact any member of the Firm’s education practice group.

New Fingerprinting Requirements In Massachusetts

[January 15, 2013] Massachusetts recently enacted a wide-reaching fingerprinting law that requires public and private schools to obtain fingerprint-based criminal background checks on current and prospective employees who may have direct and unmonitored contact with children.  Additionally, the law requires public and private schools to obtain such checks for any individual who regularly provides school-related transportation to children and any subcontractor or laborer commissioned to perform work on school grounds who may have direct and unmonitored contact with children.

Under the new law, fingerprints will be submitted to the State Police for a state criminal history check and forwarded to the Federal Bureau of Investigation for a national criminal history check.  The fingerprinting requirements take effect for the 2013-2014 school year for new employees, and employees hired before that time must submit fingerprints for federal background checks before the 2016-2017 school year.

In addition to the requirements discussed above, the new law requires the Department of Early Education and Care to conduct fingerprint-based checks on “any applicant for a family child care, small group and school age, large group and school age, residential and placement license or family child care assistant certificate.”  Furthermore, the law requires fingerprint checks for all applicants for employment who have the potential for unsupervised contact with children, in any program licensed or funded by the Department of Early Education and Care.  The law also requires fingerprint checks for “all household members or persons regularly on the premises, aged 15 and older, of applicants for family child care licensure.”

More detailed information regarding the new fingerprinting requirements will be provided in an upcoming E-Alert.  Please note that an incorrect version of the bill has been widely circulated.  The correct version of the law can be found here.

This new law presents a valuable reminder for schools to re-evaluate their written guidelines for assessing criminal and sex offender records. Please do not hesitate to contact us if you need any assistance updating or preparing your school’s criminal and sex offender record compliance packages, as the Firm prepares these for schools across the country.