How to Easily Build the Best Background Checks and Drug Tests

Transcription

1 How to Easily Build the Best Background Checks and Drug Tests INFORMATION YOU NEED. PEOPLE YOU CAN TRUST.

2 Chapters Casting a Wider Screening Net Justifying a Criminal Background Check Following the Letter of the Law The Value of Verifications Creating a Candidate-Friendly Drug Testing Process Simplifying Employment Eligibility Initiatives in the U.S. 2

3 Casting a Wider Screening Net: Filling in the information holes

4 Contents Introduction Evolution of the Background Check Background Checks as a Business Differentiator What do Companies Typically Order? What is the Typical Process? Meeting the Special Needs of Contractors Review Return to Book Contents Page Written by First Advantage. The enclosed information is not intended as legal advice and should not be interpreted or relied upon as such. The legislative environment is constantly changing and you should consult your own legal counsel before taking any action. Copyright 2015 First Advantage. All rights reserved. 4

5 Introduction How organizations are using background checks to reduce risk and make faster, more confident applicant decisions. This chapter explores strategies for: Ordering background checks. Benchmarking your screening practices against industry standards. Differentiating your business by promoting candidate-friendly hiring. Mitigating costly legal liability associated with negligent hiring. Protecting your brand by ensuring that employees are properly screened and credentialed. 5

6 Can you believe has only been around for about twenty years? 6

7 Evolution of the Background Check The Internet has revolutionized background screening. Before the Internet, employment screening was expensive and time-consuming. Few companies considered it essential. The world seemed smaller, and people seemed more trustworthy. Background checks simply didn t make sense to most businesses. Today, everything has changed. The Internet and other advanced technologies make background checks affordable and accessible to everyone, from Fortune 500 companies to parents who screen babysitters. The quality of data has also exponentially improved. Employers can now cast a wider net far beyond the local criminal checks long associated with background screening to unearth vital details about an individual s professional and personal history. Using this data, organizations can now spot risks faster, and Human Resources (HR) and Security departments can work smarter than ever before. These days, it just doesn t make sense not to screen. 7

8 Screening Timeline of Events that Shaped an Industry 1970 $200/check References checked internally or by word of mouth or private investigators $150/check 1983 first USPS shooting Negligent Hiring & Retention Cases with average jury award exceeding $800K Rise of the Background Check Data Providers December 17, 1993 in the St. Petersburg Times: The symposium was sponsored by the U.S. Postal Service, which has seen so many outbursts that in some circles excessive stress is known as going postal. Thirty-five people have been killed in 11 post office shootings since The USPS does not approve of the term going postal and have made attempts to stop people from using the saying. Some postal workers, however, feel it has earned its place appropriately $75/check 9/11/2011 *Background Screening and Investigations by W. Barry Nixon and Kim M. Kerr, Elsevier $40/check Negligent Hiring & Retention Cases with average jury award exceeding $1.5Million 9% or 76% with of workplace homicides are committed by coworkers former coworkers* of all workplace homicides are committed a firearm* 2015 $30/check 8

9 Not Screening is Not Acceptable in Successful Organizations Employees are among an organization s most critical assets they can make or break an organization. Successful employers know that making well-informed hiring decisions based on an individual s background information can help: Validate hiring requirements and credentials Assist with laws or regulations which mandate or require background screening in certain businesses or industries Mitigate risk exposure Results Are In Aberdeen Group reported the following key performance indicators were used to determine the best in class for companies who conduct background checks against those who don t: 89% first year retention of new hires over the past two years as compared to only 68% among laggard organizations 87% of new hires were the top-ranked candidate, as compared to 46% among laggard organizations 6% year-over-year decrease in the time-to-fill vacant positions, as compared to an 8% increase among laggard organizations However, employment screening is evolving. No longer a segregated tool to simply detect criminal records or verify past employment, it is now integrated into online HR applications, providing real-time, in-depth data about candidates. Organizations are using it more strategically than ever, to help differentiate their hiring process and protect against unnecessary risk. 9

10 Screening can differentiate your business. 10

11 Background Checks as a Business Differentiator Competition for top talent is fierce. The first step to competing for and hiring the best talent, is recognizing it. And, the first step to recognition is access. Offering Direct, Candidate-Friendly Access Employment screening technologies such as online candidate data capture tools and screening integrations use the Internet to connect candidates with employers. Online candidate data capture leverages a Web portal, usually hosted by a screening provider, branded with logos and colors to align with the look and feel of the employer. The portal allows applicants to conveniently submit required paperwork such as background screening authorizations and acknowledgements via the Web. Integrating For Faster Answers Screening integrations, in which an electronic employment screening solution is integrated into an organization s existing HR technology, such as an applicant tracking system (ATS) or human resource information system (HRIS), are another popular HR strategy. Integrating an online screening service into an HR system offers a convenient, singlesource solution that helps HR work efficiently by automating workflows and tedious, manual tasks associated with hiring, such as data entry. Candidates experience easy Web access to the organization, and a seamless hiring and on-boarding process that puts them to work faster than ever before. Screening for Brand Protection Another proactive use of employment screening is for brand protection. This involves performing adequate, front-end due diligence on potential employees as a way of mitigating fall-out from negative employee-related publicity that can chip away at an organization s brand or reputation. 11

12 Particularly with high-profile employees such as C-level officers or trusted professionals such as physicians, it is critical to validate all background information including education, past employment, professional credentials and all references. Apart from risking public safety in some rare cases, not validating the credentials of professional employees could ultimately jeopardize investor trust and customer loyalty, should the error make the business headlines Consider these statistics about resume discrepancies, provided by a CareerBuilder.com survey: 38 percent of those surveyed indicated they had embellished their job responsibilities. 18 percent admitted to lying about their skill set. 12 percent indicated they had been dishonest about their start and end dates of employment. 10 percent confessed to lying about an academic degree. 7 percent said they had lied about the companies they had worked for. 5 percent disclosed that they had been untruthful about their job title. -Source: ( 12

13 Screening May Assist in Reducing Risk Exposures $9M: The settlement cost of the Sue Weaver case against the employer and subcontractor who hired the attacker. Source: Unfortunately, nothing motivates organizations to screen employees like an employeerelated crime followed by a costly lawsuit. Take the true story of Sue Weaver. She was brutally raped and beaten to death by a convicted sex-offender who had performed service work in her home a few months earlier. At the time, the company she hired to do the work didn t perform background checks on people they sent into customer homes. Had a background check been performed, they would have likely discovered the conviction and could have possibly avoided the horrendous event. Understanding Risk Tolerance To keep things in proper perspective, it s important to understand that employee-related risk is relative. People with criminal records should be not be automatically excluded from employment. However, considering in million adults were incarcerated in the United States ( which translates into about 3 in 100 working-aged adults ( html), employers must clearly understand their risk tolerance when hiring individuals with a criminal history. While most organizations must address unique types of risk based on specific jobs or internal objectives, the following are a few basic guidelines that can serve as a starting point for evaluating risk tolerance. 13

14 Risk Tolerance Indicators Sample Positions Low Risk Moderate Risk High Risk Little to no exposure to vulnerable populations such as children, the elderly, disabled or sick individuals Little to no access to sensitive information about an organization, its employees or its customers No responsibility for the welfare and safety of others Assembly line workers in a manufacturing plant Construction workers (excluding those working on or near school property) Warehouse workers Janitorial staff Waitstaff Limited access to and interaction with vulnerable populations, sensitive information about an organization, its employees or its customers Partial responsibility for the welfare and safety of others Construction workers working on or near school property Administrative and clerical personnel Direct, unsupervised access to vulnerable populations, sensitive information about an organization, its employees or its customers Full responsibility for the welfare and safety of others School teachers, coaches and other authority figures Medical and personal caregivers for sick and elderly Bus drivers Employees and contractors with access to customer homes and businesses Criminal Background Checks National criminal database search with national Sex Offender Registry Search included Courthouse search of one county National criminal database search with national Sex Offender Registry Search included Courthouse search of up to three counties One statewide search National criminal database search with national Sex Offender Registry Search included Courthouse search of all counties lived in within past seven years One statewide search Federal courthouse search 14

15 Make better decisions 15

16 What do Companies Typically Order? Companies order searches based on their individual risk tolerance models and the job requirements. Typically, searches and services fall into these broad categories: Monitor Apply Confirm Eligibility Confirm Identity Complete National Criminal Search Manage I-9 or EEV Badge Applicant Lifecycle Background Insight Conduct Biometrics Fingerprint Drug Screen Complete Ready-to-Work Physicals Provide DOT Compliance Support Search Records Search for: Criminal history Education & Employment Sanctions MVRs Credit history Payment history Rental history Comply with Legislation Show Due Diligence: Record Watch Random Drug Screening Drug-Free Workplace Program Support Hiring Tax Credits Receive Actionable Results ATS/PMS Integrations Online Applications Adjudication Services Usage Reports Collections EAP Services Payment Services Re-Certify Select Onboard Click here to see a summary of many of the searches and services offered by First Advantage if you would like to see a more comprehensive list of what can be ordered. A lot are available, but most popular are the criminal record searches which fill the top 5 searches ordered. Top 5 Searches Ordered 1 National Criminal Database Search 2 County Courthouse Search (Single Court Location) 3 County Courthouse Search (Multiple Court Locations) 4 Federal Districts Court Search Source: First Advantage, June DOJ National Sex Offender Registry 16

17 Here is a summary of how many order what types of searches to help you benchmark your processes: What do companies typically order? 69% use a national criminal file to help guide their screening 34% use federal courthouse searches 79% use county courthouse searches other 23% conduct new hire drug screens (13% conduct ongoing random checks) additional searches and services used: I-9 or E-Verify Submission sanctions searches employment, education, professional license verifications fingerprinting 17

18 Warning! A National Database of All Criminal Records in the United States Really Does Not Exist? There is no single, integrated repository of all criminal data recorded in the U.S. State privacy laws and the limited availability of technology at the local level are just two of many reasons this type of resource does not exist. Private national criminal record databases are a good alternative. They contain regularly updated criminal data from hundreds of jurisdictions at the city, county and state level across the U.S. The data is standardized, and made available to employers and other businesses in a searchable format. Users pay a fee for the service, and based on how they intend to the use the database, they must agree to the appropriate usage guidelines determined by the Fair Credit Reporting Act (FCRA) and other laws. Best Practice Tip Always perform a national criminal database search AND a county courthouse search together. Although national criminal database information strives to be comprehensive, the reality is that there are some jurisdictions which do not allow for commercial collection of data to be included in a database, some that do not have electronic storage or access to the data, and some sources that are not necessarily kept up to date. County courthouse information is the most in-depth and up-to-date data available since it is researched at the courthouse on a daily basis; however, it only covers one county out of approximately 3,300 in the U.S. and relies heavily on information provided by an applicant. Combined, these two searches complement each other and drastically enhance the effectiveness of a background check. 18

19 How Does a National Criminal Database Search Help Employers Reduce Risk? A national criminal database search provides fast results and cover a considerably broader geographical reach, compared to a traditional county courthouse search. With national coverage, you can find records in jurisdictions not reported by an applicant in an attempt to hide a criminal history. Since a national criminal database search costs a fraction of a county courthouse search, they can save money if a criminal record is found that would disqualify a candidate, while also saving the time and expense of performing additional searches or drug testing. Learn more about criminal background checks--click here to download the guide, It s a Crime. 19

20 Validate Everything Another proactive use of employment screening is for brand protection. This involves performing adequate, front-end due diligence on potential employees as a way of mitigating fall-out from negative employee-related publicity that can chip away at an organization s brand or reputation. Employment verifications In telephone interviews with existing or previous employers, general information is collected about the employment history of an individual including: date of employment, job title, salary, reason for leaving, eligibility for rehire and overall job performance is sometimes summarized. Education verifications In telephone interviews with educational institutions, general information is collected to verify information about degrees earned including the verification of all degrees specified by a candidate. Credential verifications The appropriate government or industry agencies are contact to provide verification of a specified professional licensure, with results that can include: issuance date, license type, expiration date, disciplinary actions and license status. Sanctions searches These are instant database searches that allow employers to locate sanction and disciplinary action histories taken against an individual s professional license, specifically within two highly regulated industries: healthcare and financial. Reference checks In telephone interviews with personal or business-related references, information is gathered about a candidate s performance that can include: years known and in what capacity, verification of technical abilities or areas of expertise and strengths/weaknesses related to job performance. 20

21 Verifications: In-house vs. Outsourcing Cost Turnaround time Quality Liability In-house Requires one or more dedicated internal resources, an estimated $25K - $35K annually, per resource. Varies from days to weeks, based on workload and efficiency of internal verifier(s). Varies, based on number of attempts made, questions asked and documentation method(s) used. Varies, based on knowledge, training and skills of internal verifier(s), and documentation requirements of employer. Outsourced Priced per verification. Average is 72 hours. High quality results from: Leveraging a skilled team of professional verifiers. Following customer protocol regarding number of attempts made. Using standardized scripts to avoid liability issues and consistently extract more and better quality data. Reduced risk of discrimination and other hiring-related liability, due to: Strict use of approved scripts. Robust electronic documentation of all attempts made and related case details. 21

22 The right tools give you a clearer picture. 22

23 What is the Typical Process? Once you know what you want to order for that job position, you then need to obtain some information from the applicant. If you integrate your screening into an applicant tracking system (ATS) or property management system (PMS), those systems gather the data needed in most cases to conduct the check. If integrated, then the screening kicks off at the time you select (usually after an offer is made but before the first day of work). If not integrated then the data will need be entered by either the applicant or your company directly with the screener. Depending on the location around the world where you are wanting data searched, additional information pieces may be needed and your screener should make you aware of the missing data so that either you or the screener can obtain it. Individual identifiers typically used: First name, last name, middle name Date of birth SSN if provided & included in record Addresses Tips: Obtain addresses and places of employment from applicant Use Social Security Number Verification tools to identify geographies not revealed in applicant s provided information Conduct database searches proprietary or otherwise on the addresses you choose. Some states have a 7-year limit on the data you can review for an employment decision. That is why some companies standardly apply that timeframe unless the position or your locations warrants an exception to look longer. Use tools and filters: name variations confirm matches, common names, aliases. 23

24 So once you narrow down the names, many organizations follow this model to look for records: Broad net criminal database search Any additional addresses shown from verification tools The locations where they have lived the past 7 years 24

25 Identify Responsibilities (i.e., will drive, will manage money, will manage people, executive) Outline Risks Exposure to others Exposure to customers Exposure to vulnerable population Identify any licenses required to perform the job Identify if fingerprinting required for the industry Pick searches and services based on the above information For all candidates, complete a national criminal search If hits, complete additional searches based on results for past 7 years Complete a county criminal search for all places live in past 7 years, if not enough funds to cover all locations, complete for the location where they lived the longest Complete a federal search if any hits in the National Criminal File Complete a county criminal search for where they have lived for the past 7 years Decide when to conduct check usually after you make an offer Alert the applicant that you will be doing a background check Get permission to do the check Conduct the background check Follow any applicable laws Review the results If no problems, HIRE or HOUSE! If a record that would affect your decision: Notify the applicant so they can get a copy of their report to ensure it is correct Complete an individualized assessment if criminal record returned Wait 5 days at minimum to allow the person to resolve the problem on their report Send another notice that you have decided not to hire based on the background check Note: this is a very high-level summary visit to learn more. 25

26 Viewing the Results What is a Hit Rate? A hit in employment or resident screening, refers to a criminal search yielding one or more criminal records that match the search subject. A hit rate is the percentage of hits compared to the number of overall searches submitted against a criminal records database. According to internal metrics from First Advantage, the hit rate for its National Criminal File database average has gone down from approximately10% in 2008 to 7% in 2010 and 6% in Of these criminal record hits, on average, 1 in 5 were located in states or counties outside the subject s current residence, which stresses the importance of a national search. Top 5 Criminal Record Search Hit Rates by State and Country State Hit Rate Country Hit Rate Kentucky 15.9% North Carolina 10.4% Indiana 10.2% Minnesota 8.6% Tennessee 8.3% Australia 4.12% New Zealand 1.85% South Africa 1.18% United Kingdom 1.11% Canada 0.54% Did you know that some industries are legally required to perform background checks depending on their location-- schools, financial organizations, healthcare, child or elder care to name a few. 26

27 Make the right moves 27

28 Meeting the Special Needs of Contractors Screening providers understand the challenges and expectations associated with contractor screening, and have developed smart online tools to help organizations efficiently and securely screen their contractors. While the functionality of available contractor screening tools may vary, the highest quality solutions offer the ability to: Create screening packages with risk-specific components. Reduce costs by offering a self-pay option, in which contractors can pay for their own background check. Obtain real-time management reports to measure contractor compliance. Review which individuals have had background checks performed on them. Require vendors and contractors to re-credential their employees to ensure ongoing compliance. Maximize buying power and streamline administrative efficiencies by consolidating contractor screening with other employment screening tools under one vendor. 28

29 Contractor Screening First Advantage found contractors have a 2-3% higher criminal hit rate than employees. Just as organizations must screen employees, it is critical that they also screen their contractors, subcontractors and depending on the situation their vendors. As noted earlier in the Sue Weaver case, a high-profile lawsuit that was settled for $9 million, organizations can be held liable for the behavior of their employees, subcontractors, and potentially anyone being paid to represent their brand. While organizations are often aware of the risk, some view contractor screening as cost-prohibitive, or too resource-intensive, or they simply don t know where or how to start. In particular, when working with large, de-centralized contractor network, it can be overwhelming. However, in addition to reducing risk, organizations that use background screening to spot qualified contractors can: Improve their brand image by promoting contractor safety as a service differentiator. Assists with mitigating risk exposure. Attract high-quality contractors who want to work for an admired company. Strengthen relationships with vendors and contractors. 29

30 Chapter Review Background screening has evolved into a vital HR and property management tool that is integrated into the broader applicant verification process service that empowers organizations to confidently cast a wider net in their search for good employees and residents. When strategically aligned against an employer s internal objectives, it becomes a powerful business differentiator that: Leverages advanced technology to efficiently attract, compete for and select applicants. Assists with mitigation of risk exposure associated with negligent hiring and retention. Protects their brand reputation by ensuring they employ qualified, trusted professionals to represent their business. 30

31 Justifying a Criminal Background Check: Put yourself in the driver s seat

32 Contents Introduction The EEOC Weighs In Guidelines for Fair Usage Determining Risk Tolerance Review Return to Book Contents Page Written by First Advantage. The enclosed information is not intended as legal advice and should not be interpreted or relied upon as such. The legislative environment is constantly changing and you should consult your own legal counsel before taking any action. Copyright 2015 First Advantage. All rights reserved. 32

33 Introduction A practical assessment of guidelines from the Equal Employment Opportunity Commission (EEOC) that caution against using criminal background checks. This chapter explores strategies for: Reducing job-specific risk using screening packages. Lowering employee-related risk and job discrimination liability using a results adjudication model. 33

34 The EEOC cautions everyone to have a good reason for performing a criminal background check. 34

35 The EEOC Weighs In Criminal Background Checks Can Be Tricky The EEOC warns employers to make informed and individualized assessments of candidates when using criminal histories in the hiring process. For most employers, they re an indispensible tool for spotting candidates who pose a legitimate threat to an organization, based on past behavior. In fact, they re often the best defense against negligent hiring and retention claims. However, the Equal Employment Opportunity Commission (EEOC) has a different take. It cautions employers to have a good reason for performing a criminal background check. The EEOC position is that it can be a discriminatory practice under Title VII of the Civil Rights Act of 1964, since racial minorities such as African Americans and Hispanics have higher arrest and conviction rates than the population as a whole. 35

36 Job Related According to the EEOC, employers should consider the following when conducting and acting on the information returned from a criminal background check: The nature of the job; The nature and gravity of a criminal offense; and When the offense occurred Visit: EEOC in Action In October 2009, the EEOC filed a national hiring discrimination lawsuit against an events planning company. The lawsuit charged the company had refused to hire African American, Hispanic and male applicants across the country since 2001, based on their credit and criminal history. The suit claimed the practice had an unlawful discriminatory impact because of race, national origin, and sex, and is neither job-related nor justified by business necessity. Source: Note: In 2013, the EEOC brought a lawsuit against BMW alleging that one of its facilities in South Carolina adopted a criminal background check policy that led to a disproportionate impact on African-Americans. You Can, and Should, Perform Criminal Background Checks Despite the caveat, the EEOC does not prohibit the use criminal background checks in the hiring process. In the United States, pre-employment criminal background checks are considered an essential best practice and employers have the right to perform them. Note: read more about EEOC lawsuits here: 36

37 U.S. Prisoners Have High Recidivism Rates In criminology, recidivism refers to a relapse into criminal behavior after one or more previous incidents (including arrest, incarceration, etc.). One case study by the U.S. Department of Justice Bureau of Justice Statistics offers insight into U.S. prison population recidivism rates: 52 percent of all released prisoners included in the study were back in prison within three years. Of the prisoners included in the study with more than 15 prior arrests, 82 percent were re-arrested with three years of their release. Source: Recidivism is a critical consideration for employers who must weigh the risk a candidate with a criminal history poses to their organization. Their biggest concern is, Will they do it again and put my organization, employees and customers at risk? 37

38 Mitigate EEOC discrimination claims. 38

39 Guidelines for Fair Usage To mitigate EEOC discrimination claims and protect against employee-related risk, there are methods of fairly incorporating criminal checks into the hiring process. With each of the following recommendations, organizations should leverage a team of specialists human resource (HR) managers, internal legal counsel and an experienced screening provider to address unique organizational issues and concerns. 1. Create a standardized, documented screening policy. The average legal cost of a discrimination lawsuit for an employer hovers around $150,000* enough to shut down a small business. Bigger companies tend to suffer more from the bad publicity linked to discrimination claims. But regardless of size, all organizations should take the first step toward mitigating discrimination liability by developing and following clearly documented screening policies that dictate the appropriate use of criminal background checks. First, a good screening policy helps ensure that hiring managers apply the same background requirements to all candidates. Process consistency is essential to unbiased hiring. Source: 2. Comply with state and federal requirements. In addition, well-researched policies address industry- specific criminal background check requirements and any applicable local, state and federal laws regarding discrimination and consumer protection, such as the Fair Credit Reporting Act (FCRA). Knowledge of these requirements can alleviate ambiguity about the fair use of criminal records, such as when the offense occurred, since many states dictate how far back criminal background checks can date. For example, convictions can only be reported for 7 years in some states while in others there is no time limit. 39

40 3. Consider ALL applicable laws about accessing criminal history data. To use criminal records with reduced liability, an organization s screening policy should address or consider the following issues. State and federal FCRA compliance. These consumer protection laws govern the fair and appropriate use of personal information and apply to all employers that use data from a consumer report (including background checks) to make hiring decisions. EEOC regulations and recommendations. There are constitutional and federal laws that require equal protection and require employers to mitigate against discriminator hiring policies or processes. The EEOC promulgated its guidance in 2012 as a means to explain how the use of criminal record information could result in discriminatory hiring policies or processes because of the predominance or high percentage of certain citizens having criminal histories and to avoid that happening, the employers should run a process that considers individualized assessments so that it may demonstrate that it is not excluding certain groups or having disparate impact on those groups who have a relatively high percentage of criminal histories. Industry standards, guidelines or requirements. Some industries such as finance, healthcare and transportation are highly regulated and require specific types of criminal background checks. Employee-related risk tolerance. This is specific to an organization, and should be determined by a team of experienced resources, involving (but not limited to): HR, legal and a professional screening provider. Past hiring decisions and/or lawsuits. If an organization has experienced lawsuits due to past hiring decisions, these should be reviewed and considered. While good examples of background screening policies are available through HR industry resources such as the Society for Human Resources Management (SHRM), organizations can also work with a reliable screening provider to craft a unique policy that fits their business needs. 40

41 4. Be consistent with other HR policies. Screening policies should also be consistent with other HR policies in order to align with internal requirements, but flexible enough to accommodate changing conditions within a larger world-wide economy or industry. 5. Always ensure job-relatedness. Job-relatedness of a criminal background check is largely determined by the risk tolerance associated with the position(s) being filled. Criminal history is generally less relevant in low-risk positions and very relevant in higher risk positions. For example, think about teachers. They have unsupervised access to children, creating a clear need to factor a candidate s criminal history into a hiring decision in order to provide a safe, secure environment for students. In this case, an organization can show job-relatedness, should it decide to base a hiring decision on the results of a criminal background check. On the other hand, low-risk positions such as assembly line workers have minimal access to sensitive information or vulnerable populations. Here, a candidate s criminal history becomes much less of a factor in a hiring decision. 6. Conduct Individualized Assessments. The EEOC sets forth a number of individual pieces of evidence that an employer should review when making an individualized determination including: 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 a different employer, with no known incidents of criminal conduct; The length and consistency of employment history before and after the offense or conduct; 41

42 Rehabilitation efforts, e.g., education/training; Employment or character references and any other information regarding fitness for the particular position; and Whether the individual is bonded under a federal, state, or local bonding program. 42

43 Know your risk. 43

44 Determining Risk Tolerance While there are often many organization-specific issues to consider when determining employee-related risk tolerance, below are a few critical questions to start the dialogue. Will employee(s) regularly interact with the public? Will they have access to at-risk populations, such as children or the elderly? Will they have access to sensitive customer information? Will they have access to sensitive company information? Does their professional licensure require criminal screening? Screening Packages Can Help Ensure Job-Relatedness Job-specific screening packages can help discourage discrimination claims. They promote hiring consistency by applying the same requirements to all applicants, and they help ensure job-relatedness by customizing risk tolerance to the position being filled. Below are simple tips for creating strategic screening packages. Consider minimum industry requirements and standards. For example, within the financial industry, guidelines established by the Federal Deposit Insurance Corporation (FDIC) recommend that at a minimum employees be screened to uncover criminal convictions and industry sanctions. Configurability is Key Group jobs into categories (i.e., entry-level, management-level and executive-level) based on risk tolerance associated with: Access to: 1) sensitive company or customer information; and/or 2) vulnerable populations such as children, sick people or the elderly. Responsibility (direct or indirect) for the safety and welfare of others. Control over public perception, brand reputation and/or investor satisfaction (primarily C-level positions). 44

45 Based on industry requirements and risk tolerance, select a mix of background screening components for each package category to address the lowest acceptable amount of risk. Most leading screening providers offer easy, online tools for creating customized, company-specific screening packages that can be leveraged and accessed by all hiring managers via a consolidated Web site. This is particularly helpful in large, decentralized organizations with multiple locations. 45

46 Below is an example of job-specific screening packages that could be applicable within the financial industry. Entry-level (bank tellers) Management Senior Management Risk(s): Access to sensitive customer information; violation of FDIC screening requirements Risk(s): Access to sensitive customer information, employee data and company information; violation of FDIC screening requirements Risk(s): Access to sensitive customer information, employee data and company information; violation of FDIC screening requirements SSN Verification Nationwide criminal records database Financial sanctions database search SSN verification Nationwide criminal records database Financial sanctions database search County criminal record search Employment verification Credit check Education Verification SSN verification Nationwide criminal records database Financial sanctions database search County criminal record search Employment verification Education verification Professional credential verification Reference check Credit check 46

47 Chapter Review To reduce employee-related risk in the United States, where criminal histories are higher than any other country in the world, employers should use criminal background checks. However, to ensure an equitable hiring process for all candidates that complies with EEOC anti-discrimination guidelines, employers should also demonstrate: 1) a job-related need for a criminal background check and 2) fair consideration of the circumstances surrounding a criminal records history. Developing documented screening policies, creating job-specific screening packages and leveraging a results adjudication matrix are smart strategies for aligning criminal background checks against risk tolerance to help employers: Mitigate EEOC discrimination liability, while lowering employee-related risk. Foster a more secure, diverse workplace. 47

48 Following the Letter of the Law Following the Letter of the Law: Understanding the effects of legislation

49 Contents Introduction HR Recruitment Fair Credit Reporting Act (FCRA) Americans with Disabilities Act (ADA) Title VII of the Civil Rights Act of 1964 Review Return to Book Contents Page Written by First Advantage. The enclosed information is not intended as legal advice and should not be interpreted or relied upon as such. The legislative environment is constantly changing and you should consult your own legal counsel before taking any action. Copyright 2015 First Advantage. All rights reserved. 49

50 Introduction Compliance with state and federal employment laws is a fundamental part of the hiring process. Simplify your process with this checklist of applicable guidelines and automated compliance tools. This chapter explores strategies for: Summaries of key federal laws and their impact on employment screening. Simple steps for easier compliance. Advanced tools that can help streamline and enhance compliance. 50

51 HR recruitment teams walk a tightrope everyday. 51

52 HR Recruitment Hr Recruitment Teams Walk a Tightrope Everyday To support the long-term success of an organization with the most competent workforce, HR must know what information is and is not permissible to gather and use in the employment screening and hiring process. It s critical to uncover as much as possible about the background, skills and qualifications of job candidates in the hiring process, while carefully balancing each candidate s rights to work, privacy and equality. NOTE: All organizations should consult legal counsel prior to implementing an employment screening program. HR Must Balance Job Requirements With Safety and Impartiality Failure to adequately screen candidates can expose employers to liability from negligent hiring and retention claims, and negatively impact productivity, workplace safety and security and ultimately an organization s brand. It s critical for HR to know that: individuals are qualified to perform a job; and based on their background history, they present minimal risk to the organization, its customers or the public. Inappropriate use of background information to make hiring decisions may violate a number of consumer protection laws that put a company at risk for costly and potentially high-profile lawsuits. 52

53 Case in Point In A $5.9 million class settlement in Hunter, et al v. First Transit demonstrates that noncompliance carries lofty penalties for violations of the FCRA. Plaintiffs in this litigation alleged that First Transit and First Student, respectively, failed to provide the requisite disclosures to applicants before running a background check on them and also failed to follow the required two-step adverse action process when they denied employment based on information in the criminal background reports. The Biggies Federal Laws That are Baseline Rules The acronyms can get overwhelming, so here s a simple rundown of the top three federal laws that impact employment decisions. Law Acronym Enforcing Agency Objective Americans with Disabilities Act ADA Equal Employment Opportunity Commission (EEOC), with regard to employment Promotes equitable hiring practices by banning discrimination based on physical or mental disabilities. Fair Credit Reporting Act FCRA Federal Trade Commission (FTC) Regulates the collection, dissemination, and use of consumer information. Title VII of the Civil Rights Act of 1964 Title VII Equal Employment Opportunity Commission (EEOC) Promotes equitable hiring practices by banning discrimination based on race, color, religion, national origin, sex and other factors. 53

54 Follow the Fair Credit Reporting Act (FCRA). 54

55 Fair Credit Reporting Act (FCRA) The FCRA regulates the collection, dissemination, and use of consumer information. However, when it comes to employment screening, organizations should know that the FCRA: Applies to background screening on current or prospective employees when conducted by third parties such as background screening companies or Consumer Reporting Agencies ( CRA s ). Requires a statutory disclosure from the employer to the consumer and a written consent from the consumer prior to requesting a background check, otherwise known as a consumer report, for employment purposes. Please refer to the act for the specifics of the requirements. Requires that certain notices be delivered to consumers if an adverse action is taken based in whole or in part on the consumer report (e.g., employer may determine to make an adverse employment decision on the consumer). Steps for Basic FCRA Compliance 1. Employer must provide statutory (FCRA) disclosure to the consumer and obtain written consent from applicant/consumer before ordering the background screen from the CRA. 2. Communicate certification to the consumer reporting agency that the employer is requesting the consumers information from the CRA for a specified permissible purpose under the FCRA (e.g. employment) and that the notice of disclosure has been given to the consumer and that a consent has been obtained from the consumer 3. Provide the required notice (Pre-Adverse Action).with a copy of the consumer report to the consumer before an adverse action is taken. 4. After a sufficient period of time after the Pre Adverse Action notice is provided, (usually at least 5 days) provide notice after an adverse action is taken. 55

56 Step 1 Provide disclosure to and obtain written consent/authorization from applicant before ordering the background screen from the CRA or background screening company to inform the consumer that a report may be obtained for employment purposes and that the consumer/ applicant provides written authorization for that report to be provided to the prospective employer. Note that a clear and conspicuous disclosure must be made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; recent litigation suggests that it is advisable to not include the disclosure with any other documents such as the job application or a release from liability. The disclosure must specify that: The background screen (consumer report) or investigative (as special type of screening which includes interviews, if applicable) consumer report may be obtained. The employee or applicant may request additional information as to the complete and accurate nature and scope of that report. Depending upon the applicable law of the jurisdiction where the report is delivered or the residence of the consumer, the consent may written in such a way so that it may used in future requests in connection with that consumer s employment such as re-screening for that same employer. Step 2 Communicate certification to the consumer reporting agency. Certify the following to the third-party background screening company / CRA: refer directly to the statute for specific requirements): *(Please Disclosures and consent have been made and obtained. Pre-adverse action disclosures will be made if applicable. (See step 3 below) 56

57 Additional investigative consumer report disclosures will be made if applicable. Information from the consumer report (background check) will not be used in violation of Federal or state equal employment opportunity laws or regulations. Step 3 Provide required notice before an adverse action. A written notification must be provided to the consumer before taking any adverse action based in whole or in part on what was in the consumer report. The notification must include: Copy of consumer report. Summary of rights prescribed by the Federal Trade Commission. Statement that adverse action is contemplated. For employment purposes, the FCRA defines adverse action as a denial of employment, a promotion, an assignment or retention as an employee, or other decision that adversely affects a current or prospective employee. Step 4 Provide notice after an adverse action. A notice must be provided to the consumer if the employer takes an adverse action regarding the applicant or employee. The notification must include: The the name address and telephone number of the consumer reporting agency that furnished the consumer report. Statement that the agency is not the decision-maker and is unable to provide the specific reason for the adverse action. Statement that the consumer has a right to obtain a free copy of the report. Statement that the consumer has a right to dispute the report with the consumer reporting agency. 57

58 Under the FCRA employers are not required to provide an explanation to applicants or employees about which part of a consumer report influenced the adverse action. However, some state or local jurisdictions may have more stringent requirements, please consult your legal counsel or HR consultant for your particular circumstances. 58

59 Americans with Disabilities Act (ADA) can affect screening choices. 59

60 Americans with Disabilities Act (ADA) The ADA prevents employers from acting in certain ways that would discriminate against anyone with a disability. When applied to background checks, this law outlines what can and cannot be done before and after the job offer is made. Before a Bona Fide Job Offer is Made: You cannot gather medical information. You cannot inquire about the existence, nature or extent of a disability. You cannot makes inquiries that would reasonably lead to the disclosure of such information. After a Bona Fide Job Offer is Made: Keep medical information private and separate from other personnel records. You cannot use medical information about disability against a person unless there is a business necessity. Use the interactive process to determine any reasonable accommodation that needs to be made. 60

61 Title VII of the Civil Rights Act of 1964 sets the standards. 61

62 Title VII of the Civil Rights Act of 1964 Title VII guidelines, which are enforced by the EEOC, also affect background screening. In order to comply with these laws, should avoid gathering: Information about protected categories which primarily include (but are not limited to) race, color, religion, national origin and sex. Information about arrests. However, you can inquire about job-related abilities if done in a non-discriminatory manner. Credit Reports Appropriate Usage is Critical As of September 2014, ten states have implemented laws that restrict employer use of credit reports for hiring and retention purposes, with 11 more states considering similar laws. The general reasoning is that the reports discriminate against individuals based on their credit history, and prevent people with excessive or bad debt from landing jobs. Note: see if your state has pending legislature restricting the use of credit information in hiring decisions. Click here: 62

63 Credit Matters, in Specific Situations According to research by the Society for Human Resource Management (SHRM): Only 13 percent of organizations surveyed conduct credit checks on all job candidates. Another 47 percent consider credit history for candidates of select jobs. Employers generally conduct credit checks only for certain positions: o Jobs of financial or fiduciary responsibilities 91 percent o Senior executive positions 46 percent o Positions with access to highly confidential employee information 34 percent Source: Only 3% of First Advantage Customers Order Credit Checks and That Number Has Gone Down Over the Past 3 Years Percentage of First Advantage Customers Conducting Credit Checks

64 Best Practice Tips for Employer Use of Credit Reports Never base a hiring decision solely on information contained in a credit report. Always ensure job-relatedness. Set a uniform standard that defines unfavorable credit history and be objective when setting and enforcing these standards. Establish a consistent process for obtaining credit reports. Ban the Box Some states have enacted laws prohibiting the practice of asking if an applicant has a criminal history on the initial application. This does not preclude you from conducting and acting upon information found in a background check later. One belief is that these types of questions help discourage a broad-blanket decisioning logic to exclude someone who has offended when the offense might not have an impact on him or her successfully performing the job. This gives the applicant a chance to secure an interview and demonstrate his or her skills for consideration. If as part of the background check you find a conviction that would prohibit the individual from successfully fulfilling the job duties, you can make the decision not to hire based on the information found. Non-compliance is Not an Option Lawsuits are the most tangible consequence of violating any federal and state consumer protection laws. If settled or lost, the litigation costs, penalties and damages can cost anywhere from hundreds of dollars to well into the millions, depending on the jurisdiction, the situation and the law(s) violated. In addition, lawsuits divert valuable time and resources away from daily business tasks particularly in small businesses. 64

65 Other negative effects of non-compliance lawsuits can include: Injunctions that can impact internal resource allocation by requiring organizational changes to processes and access. Brand degradation from bad publicity. Diminished workplace morale, which impacts productivity. Difficulty attracting quality job candidates due to negative reputation. Automated Tools Can Make Compliance Easier To help clients with their responsibilities to comply with employment laws, some screening providers offer smart tools that dramatically streamline the process. Automated Adverse Action Some screening providers offer a service of mailing or delivering the required FCRA notices and other documentation to consumers on the behalf of their clients. This service saves time and costs for the client by reducing the internal resources, while creating a more efficient workflow. Generally, these programs can be monitored and managed online via a recruiter portal, which creates instant program transparency and accountability, should an issue arise. Adjudication Matrix An adjudication matrix is a table of job positions and returned results indicating the risk level clients designate for the screening provider to apply to the consumer/applications. For example, an employer may be constrained under applicable laws not to employ anyone with felony convictions involving children if the job position may require interaction with children such as in a day-care center. That organization would tell the screening provider to categorize any of those results for those positions as Needs Further Review for example. This helps the employer more quickly apply their risk model to their hiring. The adjudication criteria matrix that an employer provides to the screening provider can be set up by position or job title or work location. 65

66 Job Search Packages Another tool is using automated search packages for specific job grades. This is another great tool to keep you impartial and consistent, and front load your screening process to be compliant. For example, for entry-level positions, you may not be concerned with checking job references, as there typically aren t many. But for an executive position, you may have a more thorough checklist applied consistently throughout your organization. 66

67 Chapter Review To hire and retain the most qualified workforce, HR recruiters need access to the most relevant, in-depth background information possible about candidates and employees. However, it s imperative that they know how to appropriately gather and use that information according to local, state and federal employment laws. Understanding key federal employment laws that serve as a baseline for employment decisions FCRA, ADA and Title VII is essential to distinguishing what information is permissible to gather and use. Developing or updating a compliance strategy should involve crossorganizational collaboration between multiple teams (including, but not limited to) HR, legal and a reliable, experienced employment screening provider. Automated compliance tools available through some screening providers can help save time and money, create a more efficient workflow and inject instant program transparency and accountability into a compliance program. 67

68 The Value of Verifications: Seeing the real stuff from the fluff

69 Contents Introduction People Will Misrepresent Their History to Get a Job How Verifications Can Help Reduce Risk 3 Tips Review Return to Book Contents Page Written by First Advantage. The enclosed information is not intended as legal advice and should not be interpreted or relied upon as such. The legislative environment is constantly changing and you should consult your own legal counsel before taking any action. Copyright 2015 First Advantage. All rights reserved. 69

70 Introduction Addressing the phenomenon of résumé fluffing a trend that often increases in a tight labor market with efficient verification strategies that consistently validate more information, faster. This chapter explores: Industry statistics and workplace trends driving the need for pre-employment verifications. Verification basics, including types of verifications, standard turnaround times and sample workflows. Tips for easier, faster verifications, with better quality results. General best practices to consider when utilizing verifications. 70

71 30% - 40% of applications contain discrepancies. 71

72 Misrepresent Their History According to industry estimates, at least 30 to 40 percent of all résumés and applications include inaccuracies, half-truths and embellishments otherwise known as fluff. To a hiring manager, that translates to three out every 10 résumés. And Apparently, No Pay Grade is Immune to the Phenomenon Everyone from C-suite executives to college football coaches have made the news for misrepresenting information on their résumés, getting caught and promptly resigning. Back in 2007, investigators with the New York City Fire Department conducted a sweep that led to the arrest of six people who used fake high school degrees when applying for jobs with the fire department. The candidates were charged with felonies of falsifying business records. Source: AZD2rFWaErhnWjfv06CcBg In today s competitive job market, résumé fraud is only expected to increase. Organizations need information and tools to help them efficiently spot résumé fraud and make better informed hiring decisions. What Does It Mean to Falsify Résumé Information? Unintentional discrepancies in background information occur every day, such as when employment dates slightly differ due to an employer s record-keeping policies. However, it becomes falsification when a candidate willfully provides information on a résumé or application that they know is not accurate. This can include: Outright discrepancies such as fake academic degrees and bogus work history. Exaggerated information such as reportedly managing a staff of 50, when it was really 5 quite a different scenario. Half-truths where key information is intentionally excluded. Sometimes unexplained gaps in employment history can reveal half-truths. 72

73 Why People Do It Reasons for falsifying, or fluffing, background information vary, but generally it s done to: Appear more competent/attractive than other candidates in a competitive hiring environment. Cover up a career blemish. Hide negative information, such as a criminal record. Compensate for lack of experience, skills and education. Why Résumé Fraud Increases During Periods of High Unemployment High unemployment means more people are out of work, and competition for jobs dramatically increases. The longer a candidate is unemployed, the more desperate the individual may become to get hired. Candidates are sometimes forced to switch careers or industries during periods of high unemployment and must demonstrate familiarity/experience in the new field. 73

74 Top Employment Verification Discrepancies (2010 vs 2014) Percent of All Employment Considerations 40% 35% 30% 25% 20% 15% 10% 5% 0% 37% 26.3% Employment Classfication 20% 18.4% 17.7% Date Discrepancy 10% 9% No Response from Source No Record Found at Verification Source % 7% 7.1% Position/Title Discrepancy Based on 2010 verifications performed by First Advantage Screening Solutions. Percentages do not total 100 percent, since only top 5 discrepancies are reported. Top Education Verification Discrepancies 25% Percent of All Education Considerations 20% 15% 10% 5% 21% 21.3% 19% 18.5% 17% 17.1% 15% % 0% Degree Discrepancy Date Discrepancy Incomplete Interview No Response from Source Based on 2010 verifications performed by First Advantage Screening Solutions. Percentages do not total 100 percent, since only top 5 discrepancies are reported. 74

75 How Résumé Discrepancies Affects Employers If the information cannot be confirmed, or we have conflicting data from the source, the employer can make informed decisions or investigate further to reduce their risks. If they don t know about the discrepancies, they may act on incorrect information. Some effects are obvious, others not so much, but all are 100 percent counter-productive. Positive Effects of Verifications Impact Exposure to negligent hiring liability Reduced productivity Negative publicity Brand damage Decline in shareholder earnings Under the premise of negligent hiring, employers can be held liable if they do not use reasonable care when screening employees, and one of those individuals later commits an act that risks the welfare of others. The lack of desired education, skills or experience can lead employers to place incompetent candidates in positions where they are ineffective and cause potential safety issues. A media frenzy often follows high-profile incidents, putting employers on the defense as to why they didn t verify the information. Usually, there is no good excuse why it wasn t done. Imagine a convicted sex offender making up a fake work history to cover up time spent in jail, and then being hired to lead a youth sports organization. Incidents that make headline news involving high-profile executives at publicly traded companies have the power to negatively impact stock prices. 75

76 Taking the time to verify background information provided by job candidates may seem like a clunky step in the hiring process, however, the effect is quite the opposite. It streamlines hiring by helping HR spot and efficiently filter out candidates who have a discrepancy in the education, experience or skills they desire or in other words people who unnecessarily put an organization at increased risk for a myriad of workforce-related issues. The end result is a refined candidate pool that ensures hiring managers are focused on the most qualified talent. 76

77 Verifications can help reduce risk. 77

78 How Verifications Can Help Reduce Risk According to a 2010 Society for Human Resource Managers survey entitled Conducting Background Reference Checks, respondents cited reducing legal liability for negligent hiring as their biggest motivator for performing verifications. Other top reasons included: To determine if applicants accurately represent their credentials and other key information. To understand past performance and predict future performance. Verifications the Basics Often candidates must meet specific requirements in terms of experience or education in order to be considered for certain positions. Verifications are how hiring managers ensure those requirements are met. As such, verifications are usually pre-hire activities, included in the early to mid-stages of the hiring process. Regardless of the information being verified, the process of verifying a candidate s personal information generally involves manual research which can include online investigation, personal phone calls, s, fax requests and third-party inquiries. Organizations can perform verifications using internal resources or they can opt to outsource it to a qualified screening provider. 78

79 Verifications a Timeline for Completion Sample Hiring Timeline Résumé/application submitted Pre-screen identity and criminal online history 1st interview Final interview Skills assessment Offer extended Comprehensive background screening initiated, including employment/education, credential/ license verifications, verification of business/personal references Drug test performed Candidate Accepts Offer 79

80 How Résumé Discrepancies Affects Employers Some effects are obvious, others not so much, but all are 100 percent counter-productive. Verification Component Education How it works Attempt to verify via online data source, if applicable If unsuccessful, institution is manually contacted via / phone/fax Standardized scripts are often used for consistency What can be verified Degrees including high school, undergraduate, graduate, postgraduate, industry certifications, professional licenses Hiring benefit Validates if candidate has appropriate knowledge and training to successfully perform job Employment Attempt to verify via online data source, if applicable If unsuccessful, current/former employer, military facility is manually contacted via phone or Standardized scripts are often used for consistency Dates of employment, position/job title, reason for leaving, salary (with applicant authorization), military record, industry-specific information Validates if candidate has appropriate experience to successfully perform job 80

81 Sample Verification Workflow: 1. Verifier receives an application or résumé. 2. Based on the number and types of verifications required, verifier confirms all information required to perform the verification was provided by the applicant. 3. If any information is incomplete, the applicant is contacted to obtain the full and correct information. 4. If the verifier is using a third-party verification Web site, an online inquiry is submitted, if applicable. If a record match is found, results are immediately returned to the employer and the verification case is closed. If no record match is found, the verifier proceeds to manually verify the information. 5. Verifier makes allotted attempts as determined by the employer s hiring policy at manual verification (usually via phone). 6. If complete results are obtained and successful verification is made, the case is closed and results are made available to the employer. 7. If no contact was made within the allotted number of attempts, or if contact was made but no information was available, the case is closed as unable to verify. 81

82 To Verify or Unable To Verify and Why It Matters. Verifications particularly employment and education verifications are unique screening components because the turnaround time and result quality often depend on multiple factors beyond the control of a candidate or the verifier. Successful verification is accomplished when the verifier fulfills the request by acquiring complete information from the designated source, such as a past employer, educational institution or personal reference. High verification rates are desirable, as they promote a faster hiring process. Unable to verify (UTV) is an industry term assigned to verifications that could not be completed for a variety of reasons. High UTV rates are NOT desirable, as they can add days to the hiring process since the verifier must make repeated verification attempts. Reasons for UTV Results Include: Unable to locate previous employer. The company has moved, been acquired by or merged with another company, has gone out of business, or never existed. Employer has no record of the applicant ever working there. Could indicate false information provided by the applicant, but could also mean the business has purged its historical records or is unable to retrieve those records. No response from former employer after repeated attempts at contact. This has no bearing on the quality of information provided by the applicant. The information simply cannot be confirmed or denied. Unable to validate education information. The school may be closed for the season, or closed altogether. In this situation, this information could be verified at a later date or through another source. It does not necessarily mean the applicant provided false data. 82

83 Why It s an Industry Standard. Three attempts in three days has become the standard rule of thumb for verification calls. In fact, in cases where contracts have obligated screening providers to conduct more than three attempts, little evidence supports that UTV rates are significantly lower. This phenomenon indicates that a three-attempt process is the most efficient standard when weighing the resulting verification rate against achieving reasonable turnaround times. Consider This First Advantage Case Study: Client: Top-tier financial services organization Verification Scope: No limit on number of attempts to verify education or employment. Cases remain open indefinitely until verified. Results: Most effective results achieved within first three verification attempts. Beyond three attempts, successful close rates show minimal gains. Close Rates Associated with Number of Attempts No. of Attempts Education Former Employer Total

84 Follow Three Tips for Easier, Faster Verifications. 84

85 3 Tips While manual verifications performed by internal HR staff have long been the industry standard, there are smart ways to strengthen and streamline the process to provide better quality results, faster. Here are 3 tips. Tip 1: Standardize the Process The best place to establish verification requirements that trigger long-term process efficiencies is within an organization s documented hiring policies. Regardless of whether the verifications are performed in-house or they re outsourced to a screening provider, process details can be written into a standardized verification policy, and can include (but are not limited to): 1. Listing categories of job positions that require verifications such as all positions with fiduciary responsibility or all management positions. 2. Assigning specific types of verifications required for each category of positions. 3. Capping the maximum number of verification attempts to be made. 4. Documenting all attempts and interaction with sources. 5. Developing and using approved scripts when speaking with sources. This strategic approach helps: Accelerate hiring Standardize the hiring process Ensure more consistent results Help mitigate risk exposures 85

86 Tip 2: Outsource the Process In the past decade, employers have steadily migrated toward outsourcing verifications to qualified employment screening providers. Below are key factors that play into a company s decision to outsource the process. Direct access to advanced technology and data Unlike employers who must remain focused on supporting their core competencies, screening providers invest substantial time, money and internal resources in developing and acquiring industry-leading screening and verification technology and comprehensive data sources. Better process controls While some employers believe an internal process offers better control over verification quality, outsourcing provides consistent, organization-wide control over all verifications conducted. Quality providers leverage a team of well-trained verifiers who use the same standard script on all verification inquiries to reduce process subjectivity. They can also include verifications in job-specific screening packages to ensure they are only leveraged in appropriate situations a practice that also promotes hiring consistency. Faster turnaround time An employer s internal verifiers generally have multiple HR responsibilities not just verifying candidate information which can cause delays. Screening providers can offer a team of professionals solely dedicated to performing verifications, which supports consistently faster turnaround times. Decreased liability Using approved scripts and not deviating from them is one key way screening providers help reduce legal liability. To further reduce exposure, screening providers document each verification attempt, and upon request can quickly provide a full case detail with all documentation. 86

87 Tip 3: Switch to Adjudicated Verifications To help simplify the screening process, employers can work with an employment screening provider to review and apply your adjudication requirements on the verification process indicating if the candidate is eligible, ineligible or decisional. The employer does this by developing and implementing a customized verification results matrix, based on the employer s unique risk tolerance. Here s how it works: The employer creates a static list of verification results that would make a candidate eligible or ineligible for employment. Moving forward, the screening provider saves the employer the time and resources that would normally be required to manually review screening reports by using the results matrix. Based on the provider s review and comparison against the results matrix, the provider simply informs the employer whether the candidate s verification results support an eligible or ineligible hiring decision. If the report contains questionable information, the provider can return a decisional result, which means employer must make a decision after a detailed review of the results. It is important to note that an organization s unique hiring strategy and internal objectives directly impact how the decisions are summarized for quicker action by the hiring company. For example, a less strict results matrix for entry-level positions with no access to sensitive information might yield an exceptionally high number of eligible results when compared to a stricter results matrix for management-level positions. 87

88 Sample Verifications Results Matrix Score as ELIGIBLE if: All information provided by applicant is verified (up to 2 years for nonexecutive hires and 5 years for executive hires) Eligibility for rehire not answered because of company policy Current employer - applicant requested we not contact their current employer - vendor to verify current employer post employment Dates supplied by applicant are a shorter time frame than what is verified Able to verify candidate employed for longer period of time than what requestor provided Employment DOT & non-dot Score as DECISIONAL if: Company is out of business, phone disconnected, or unable to contact within a reasonable number of attempts Unable to locate the place of employment Unable to verify position due to source or discrepancy in the position held that clearly suggests discrepancies in duties No employment dates provided by applicant Ineligible for rehire outside of cause or reason not specified Discrepancy in salary when submitted by requestor Self employment No employment history Dates supplied by applicant are less than one year discrepancy than what is verified Applicant never worked at business indicated on the application Dates supplied by applicant are greater than one year over what is verified Institution cannot verify applicant s attendance due to unavailable records Score as INELIGIBLE if: Ineligible for rehire for cause 88

89 General Best Practices Here are a few strategies to help accelerate the hiring process, improve the integrity of the data collected and verified, and help organizations efficiently hire the most qualified talent. 1. Adopt a hands-on approach at the start of the hiring and screening process. Take the time to quickly review applications and résumés and, if possible, talk with candidates before initiating a verification request to proactively clarify issues with the candidate. Don t be afraid to directly question the candidate about potential issues. It s all right to inquire about employment gaps or other inconsistencies that appear on the résumé or application. It can save time and money in a number of ways. The response could immediately disqualify the candidate and eliminate the need for a background check. Alternatively, it can reduce follow-up research required to clarify an issue. Obtain as much up-to-date and complete information as possible on the frontend. Ensuring verifiers have the most comprehensive, accurate data to work from the beginning increases fulfillment success rate and reduces delays. If possible, collect the authorization form at the time of order placement. Sometimes, education institutions or employers may require a wet signature to proceed with a verification. Providing the authorization form at the time of order saves time by reducing the need to request it as a follow up activity. 2. Make three attempts to verify employment within three days and no more.after three days, successful verification rates drastically decline, resulting in time service delays that slow down the overall hiring process. 89

90 3. If using a screening provider, ensure they work directly with the recruiter or human resource team not the candidate to acquire all applicant data. Candidates are inherently incentivized to quickly respond to a potential employer, but are often slow to respond to a screening provider, if they respond at all. Also, when providers collect data and documentation directly from candidates, they must authenticate it to maintain the integrity of the verification program, which adds another step in the process that increases costs and further delays time service. 4. If discrepancies are revealed in the verification results, provide the candidate a chance to explain any conflicting information. This promotes a fair, candidate-friendly process by allowing candidates to clarify and resolve any honest, unintentional inaccuracies. 90

91 Chapter Review Market drivers and conditions, such as high unemployment rates, will always fluctuate and impact hiring and background screening trends. But, employers can efficiently and confidently spot qualified, best-fit candidates and build a best-in-class hiring program if they: Take care to consistently verify the background information supplied by candidates on résumés and applications. Leverage market-leading technology and data available through qualified vendors and screening providers to enable easier, faster verifications, with better quality results. Implement recommended best practices to improve the integrity of the data collected and verified, and accelerate the hiring process. 91

92 Creating a Candidate-Friendly Drug Test: Using technology for a better process with faster results

93 Contents Introduction Evolution of Drug Testing Key Drug Testing Components Building a Candidate-Friendly Program How to Get Started Review Return to Book Contents Page Written by First Advantage. The enclosed information is not intended as legal advice and should not be interpreted or relied upon as such. The legislative environment is constantly changing and you should consult your own legal counsel before taking any action. Copyright 2015 First Advantage. All rights reserved. 93

94 Introduction Learn how modern technology has injected tremendous efficiency into a notoriously manual process, making it easier than ever for your candidates to complete a drug test. This chapter explores: Drug testing basics, including key program components and a sample workflow. The concept of candidate-friendly drug testing: what it is, why employers should care and how to achieve it. A multitude of candidate-friendly drug testing tools, technology and services that are currently available from leading drug screening providers. 94

95 Drug misuse and abuse and drug testing are constantly evolving. 95

96 Evolution of Drug Testing For a long time, nothing changed in the world of pre-employment drug testing. It was simply accepted by employers as an optional part of the hiring process. If employers weren t required to drug test, they often didn t because it was such a logistical struggle. Manually scheduling appointments with candidates could take days. Faxing information to collection sites was hit or miss, and the cost of shipping forms and paperwork overnight was expensive. Worst of all, a candidate s ability to follow and comply with the drug testing process directly impacted the speed and efficiency of the hiring process. In other words, if the process was difficult for the candidate, it was even more challenging for the employer. Change Has Finally Arrived Today, new online and digital technologies have automated many of the manual tasks involved with drug testing, making it a much more streamlined, efficient process for employers which is incredibly easy for candidates to follow. A Drug Testing Timeline To appreciate modern drug testing amenities, take quick review of how it has evolved. 96

97 Sept. 15, 1986 President Reagan signs executive order establishing the goal of a drug- free federal workplace. In it, congress requires the Department of Health & Human Services to develop technical mandatory guidelines for drug testing. April 11, 1988 Mandatory drug testing guidelines first published in the Federal Register and revised over the years to include: Definitions of the Medical Review Officer and job duties. National laboratory certification program. List of certified labs through 1989 Because it had no specific statutory authority, the U.S. Department of Transportation (DOT) developed their own guidelines based on Substance Abuse and Mental Health Services Administration (SAMHSA) guidelines. These DOT guidelines: Are highly specific and comprehensive. Have withstood all legal challenges. Have become the model for all drug testing programs. Refined and expanded the role of the MRO. 97

98 1991 Congress passes Omnibus Transportation Employee Testing Act, which: Includes alcohol testing for the first time. Requires split specimen for the first time. Codified as law: 49 Code of Federal Regulations Part Omnibus Transportation Employeee Testing Act (OTETA) translated into DOT rules DOT changes drug testing requirements. The Department of Transportation amends certain provisions of its drug testing procedures dealing with laboratory testing of urine specimens. Specifically the laboratory testing levels for two existing drugs (cocaine and amphetamines) are lowered. Training of and procedures used by Medical Review Officers updated. View the final rule at the Federal Register s web site, just click here. 98

99 Why Employment Drug Testing is Important When employees show up for work under the influence of drugs or alcohol, employers have everything to lose. Productivity drops, accidents increase, employee turnover rates rise, workplace safety issues jump and legal liability soars. Statistics that employers should know about drug abusers: To appreciate modern drug testing amenities, take quick review of how it has evolved. They re working. Nearly 75 percent of all current illicit drug abusers are employed 1. They job hop percent of full-time workers who reported past month illicit drug use reported working for three or more employers in the past year, compared with 5.1 percent of workers without past month drug use 2. They call in sick, a lot percent of workers with past month illicit drug use reported missing two or more workdays in the past month due to illness or injury when compared with 11 percent of workers without current use 3. They cause workplace accidents. Roughly 65 percent of all accidents on the job are directly related to drugs and alcohol 4. (1) 2006 National Survey on Drug Use and Health: National Findings. (2)Worker Substance Use and Workplace Policies and Programs, as published by the U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration Office of Applied Studies. (3) Worker Substance Use and Workplace Policies and Programs, as published by the U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration Office of Applied Studies (4) U.S. Department of Labor. For Some Employers, Drug Testing is Required Programs regulated by the U.S. Department of Transportation are known as DOTregulated programs. These programs include mandatory requirements for drug and alcohol testing, program management and auditing for all employers utilizing safetysensitive transportation employees. There is little to no flexibility in the design and development of these programs. 99

100 For Others, It s Not, But They Do It Anyway Programs that are not regulated by the DOT are often referred to as non-dot programs or drug-free workplace programs. Most employers that do not utilize safety-sensitive transportation employees fall within this category and are not required to performed drug testing it s optional. These programs are flexible, can easily accommodate innovation and can be strategically positioned as candidate-friendly. Goals of Employment Drug Testing Programs Decrease workplace accidents Reduce absenteeism Enhance public safety Increase productivity Mitigate legal liability Boost workplace morale Comply with industry regulations According to a 2010 SHRM survey: 55% of employers polled in the survey drug test all employees. 21% of employers polled in the survey do not drug test any employees. Source: 2010 SHRM Background Checking: Drug Testing survey results 100

101 Tools provide better results. 101

102 Key Drug Testing Components Drug testing options Depending on an employer s needs, a variety of testing methods are available. Rapid: urine, oral-fluid Lab based: urine, oral-fluid, hair, blood Chain of custody form This administrative form helps ensure the integrity of the testing process by: Confirming candidate identity at the collection site. Efficiently routing drug testing results to the employer. Documenting all specimen testing activity, including laboratory review and medical review officer evaluation. Collection sites Due to the simple ick factor, most employers prefer to use collection sites, as opposed to collecting urine or oral swab specimens from candidates onsite. Generally, drug screening providers offer employers access to a nationwide network of collection sites. Testing laboratories These facilities analyze the specimens to determine valid and reliable positive and negative results. DOT-regulated programs must use U.S. Department of Health and Human Services certified drug testing laboratories, unlike non-dot programs, which do not. Medical Review Officer (MRO) services A certified MRO interprets test results reported by a testing lab to ensure their scientific validity. MROs conduct phone interviews with the donor, and if needed, the donor s doctor and/or pharmacist. The goal is to determine if there is a legitimate medical explanation for the result, such as a current, legal prescription for a drug being used to treat a medical condition. 102

103 When to Drug Test It is usually initiated at one of two intervals: At the same time as a background screening package. After an offer has been extended to the candidate, yet still pre-hire. It is rarely, if ever, performed early in the hiring process, meaning before the background screening is initiated. Average Result Turnaround Turnaround time depends on the testing method and technology used. Timing can range from instant to 48 hours. $25 - $75: average cost of a drug screen. $276 billion annual cost of drug abuse to employers, in lost time, accidents, healthcare and worker s compensation costs. Source: SMA /SMA pdf The Ultimate Post-Hire Deterrent: Random Drug Testing Unlike pre-hire testing, random testing is performed on an unannounced and unpredictable basis on existing employees. As such, it is a powerful long-term deterrent for curbing on-the-job substance abuse, since it poses a much higher threat of detection than pre-hire testing. Identifying employee information such as a Social Security Number or employee number is placed in a testing pool and a scientifically arbitrary selection is made. This selection is usually computer generated to ensure it is random and that each person in the workforce population has an equal chance of being selected for testing, regardless of whether that person was recently tested or not. Once an individual is selected for testing, the person is notified and must immediately report for a drug test. 103

104 29.1% percent of workers who report past month illicit drug use say they would be less likely to work for employers who conduct random drug testing, compared to 6.9 percent of workers who did not report past month illicit drug use. Source: Worker Substance Use and Workplace Policies and Programs, as published by the U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration Office of Applied Studies 104

105 Drug Testing Workflow Chain of custody form given to applicant/or test digitally ordered Applicant reports to designated collection site with Form or digital confirmation number and photo ID Sample is collected from donor, and packaged & shipped overnight to certified lab Lab accessions specimen in preparation for testing Reports negative result to designated company contact Result reported to Medical Review Officer (MRO) Dept. If Negative Laboratory conducts initial EMIT screen If Non-negative Reports negative result to designated company contact Result reported to MRO Dept. If Negative Lab conducts 2nd test, GC/MS, to confirm results of initial screen If Positive Physician contacts donor directly to evaluate possible alternate explanation for positive result Documentation OK Physician reviews COC documentation for accuracy Lab reports confirmed positive result to MRO Dept. No Alternate Medical Explanation found Alternate Medical Explanation found If fatal flaw discovered Reports verified positive result to designated company contact Reports negative result to designated company contact Test cancelled by MRO MRO Dept. reports cancelled result to designated company contact 105

106 Building a candidate-friendly program can be easy. 106

107 Building a Candidate-Friendly Program What is Candidate-Friendly Drug Testing? Employers create a candidate-friendly process when they simplify and streamline drug testing and make it as convenient as possible for their candidates. In turn, it helps candidates start work faster and reinforces a positive hiring experience. 47 million full-time workers reported that pre-hire drug testing occurred at their place of employment. Source: Worker Substance Use and Workplace Policies and Programs, as published by the U.S. Department of Health and Human Services Substance Abuse and Mental Health Services Administration Office of Applied Studies. Why Candidate-Friendliness Should Matter to Employers The short answer: it s a win-win situation for candidates and employers. It puts people to work faster. A candidate-friendly process is simply easier, which translates to faster hiring. It helps human resources focus on strategy, not administrative details. Instead of resolving candidate complications, misunderstandings and errors related to drug testing, HR can focus on attracting, developing and supporting the highest quality workforce. It supports an organization s employment brand. In today s competitive labor market, employers must differentiate themselves in the eyes of quality talent. Employers known for a seamless, efficient hiring process are far more attractive than those with a complex, protracted process. It is an emerging best practice. A streamlined candidate-friendly process closely aligns with the internal HR objectives of most employers, which spills over into broader best practice initiatives. 107

108 Strategies to Get Started. 108

109 How to Get Started There s no formula for creating a candidate-friendly drug testing process. Instead, it s based on an employer s unique hiring guidelines, industry compliance, risk tolerance, technology capabilities and a few other factors. In lieu of a formula, here are a few strategies to consider. Strategy Draft and implement a drug screening policy with your legal department Notify candidate Increase process visibility Use a nationwide network of collection site locations that are: Convenient to candidates Open extended hours Perform drug test and fingerprint collections (when required) at the same time Decrease paperwork candidates must complete and carry with them to collection sites Facilitate lab-based rapid testing Incorporate a medical review process Candidate Benefit Level set candidate s understanding of what your drug screening program contains Provide directions and instructions about your drug screening program Promotes easier candidate tracking and requires less candidate follow-up Reduces inconvenience of driving out of the way for a drug test Accommodates candidates who can t leave work for a drug test Accelerates testing for faster hiring Saves time and money by consolidating multiple collection site trips Alleviates responsibility of remembering to bring paperwork to collection site Speeds testing with quick results for negative tests Offers peace of mind with lab confirmation of positive results Gives candidate opportunity to explain a positive result Ensures fairness to candidate 109

110 Develop a Drug Screening Policy When was your company s drug and alcohol policy last reviewed and updated to meet industry standards or to comply with federal regulations? The foundation of a legally defensible workplace drug and alcohol testing program is a sound policy. Some states have very specific policy requirements and state law, regulations and case law change constantly. Under the United States Department of Transportation each Agency s Regulations also have specific policy content requirements and the regulations are changed from time to time, sometimes requiring a policy update. An Industry Standard substance abuse policy should include the following basic elements at a minimum: Reason for Policy Mission Statement Authority for testing Applicability who will be subject to testing Implementation date Definitions comprehensive listing of terms used Drugs to be tested Testing procedures (including how to collection procedures, medical marijuana and hemp explanations, coca leaf tea explanations, negative dilute, shy bladder situations, substituted specimens, invalid tests, cancelled tests, etc.) Reasons for testing Prohibited Conduct (including what constitutes a refusal to test ) Consequences for violations (including state law permitted interventions and consequences, notice requirements, EAP) Employee Assistance, supervisory training, employee education Individual rights Confidentiality, Records/Record Keeping Consent to testing and state law Disclaimer Severability and Savings Clause notices 110

111 Candidate-Friendly Drug Testing Tools Within today s highly competitive drug screening industry, employers have unprecedented access to sophisticated tools and services that can dramatically improve the process for candidates, while supporting a wealth of internal efficiencies. Here is an overview of what the industry has to offer. Electronic or digital chain of custody Using an electronic chain of custody form in lieu of a paper form is comparable to using the Internet instead of an encyclopedia set one tool is clearly much easier, yet equally effective. Conversely, electronic forms automate Due to their manual nature, paper much of the data transfer between forms are rife with errors and inefficiencies, which can lead to employers, candidates and collection sites complications that inconvenience to minimize handwriting and data entry candidates and slow down hiring. errors, as well as shipping delays and costs. Often, all candidates must do is bring an acceptable form of identification and the site can access the form online. As candidates complete each stage of the drug testing process arriving at the collection site, submitting a specimen the candidate s progress and drug testing status is updated online, offering employers program visibility and real-time access to test status. Candidates can seamlessly move through the hiring process and start work faster. Nationwide collection site networks In the case of collection site networks, bigger is almost always better. Larger networks generally increase an employer s chances of offering: - Collection sites in rural locations that are convenient to candidates in lesspopulated areas. - Collection sites open extended hours for candidates who can t leave work early. - Collection site locations that integrate with an electronic chain of custody process. - Dual collection sites where candidates can submit drug test and fingerprint samples in one easy trip. 111

112 The collection site visit is a prime opportunity to enhance the candidate experience since it requires more effort from the candidate than any other part of the drug testing process, and it has the potential to make the biggest impact on a candidate. Online collection site scheduling Similar to the benefit of collecting drug testing and fingerprint samples at one location, using an online tool for coordinating collection sites saves time and streamlines the process. - In a few quick mouse clicks as opposed to 30 minutes of making multiple phone calls employers can conveniently schedule drug and alcohol tests, collect fingerprints at the same time they are ordered. - Based on the candidate s address, these tools can automatically route the closest collection sites and create a convenient candidate schedule, complete with a map and driving directions. While candidates will probably never know the time and hassle employers can save by using this tool, they will experience a smooth, easy process that requires very little effort and responsibility on their part. Rapid lab-based testing options Big advances have occurred in rapid drug testing. Today, drug screening providers can offer near-instant drug testing solutions that provide clients the same highquality process as a laboratory test. - The main benefit of these tests is the quick turnaround on negative results, versus the two-day turnaround of a lab-based process. - All non-negative results are confirmed with additional laboratory testing at laboratories certified by the Substance Abuse and Mental Health Services Administration (SAMHSA). - The rapid drug screen mirrors the Enzyme Multiplied Immunoassay Technique (EMIT) process performed by the laboratory, matching the same cut-off levels. Statistics show the overwhelming majority of drug tests are returned as negative, making instant testing a highly effective way to streamline hiring and put candidates to work faster. 112

113 Medical review process The goal of this process is to determine if there is a legitimate medical explanation for a positive drug test result, such as a current, legal prescription for a drug being used to treat a medical condition. Among its many benefits, a standardized medical review process helps ensure the integrity of the drug testing process by: - Decreasing legal vulnerability associated with taking adverse employment action for violation of an established drug testing policy. - Consistently reinforcing a written drug testing policy. Above all else, the medical review process ensures the utmost fairness to candidates by giving them the chance to explain any confirmed laboratory results that would otherwise disqualify them from future employment with an organization. 113

114 Chapter Review Few employment processes are more complex and cumbersome than drug testing, but that is quickly changing. New technologies are empowering employers to dramatically streamline the process, and transform the notoriously inconvenient hiring requirement into a fairly quick and easy task for candidates. When employers augment their drug testing program to include automated, Web-based tools available through quality drug screening providers, they can build a candidatefriendly drug testing process that: Enhances their employment brand and helps them attract quality talent. Aligns with their internal hiring objectives and emerging best practices. Streamlines and accelerates their broader hiring process. 114

115 Simplifying Employment Eligibility in the U.S.: Getting help is a click away

116 Contents Introduction ICE s Memorandum The I-9 Process E-Verify Two I-9 Options Choosing the Right Solution Review Return to Book Contents Page Written by First Advantage. The enclosed information is not intended as legal advice and should not be interpreted or relied upon as such. The legislative environment is constantly changing and you should consult your own legal counsel before taking any action. Copyright 2015 First Advantage. All rights reserved. 116

117 Introduction As immigration issues heat up across the United States, online tools are helping employers do more with less by streamlining and strengthening their employment eligibility verification programs. This chapter explores: Reasons why employers must create an efficient process for determining employment eligibility, along with brief explanations of key program components, including Form I-9s and E-Verify. Two options for managing an I-9 program: one with paper, and one without. A brief checklist of program considerations and questions employers can use when evaluating prospective electronic I-9 system providers. 117

118 Employers were warned. 118

119 ICE s Memorandum On April 30, 2009, the U.S. Immigration and Customs Enforcement (ICE) under President Obama, publicly announced a new worksite enforcement strategy that focuses on employers not individuals as a way of deterring illegal immigration. According to the ICE s memorandum an effective [worksite] strategy must do all of the following: Penalize employers who knowingly hire illegal workers. Deter employers who are tempted to hire illegal workers. Encourage all employers to take advantage of well-crafted compliance tools. 1 Since then, ICE has broken records for immigration enforcement activities, initiating more debarments and employer audits between January 2009 and October 2010 than the entire eight years of the previous presidential administration, including: Auditing more than 3,200 employers suspected of hiring illegal labor. Debarring 225 companies and individuals. Imposing roughly $50 million in financial sanctions. 2 Complicating matters are evolving state laws requiring employers to use the federal government s E-Verify system in addition to the Form I-9 to confirm employment eligibility. For employers, this means one thing: now is the time to update, organize and streamline employment eligibility programs. (1) ICE Memorandum, dated April 30, Subject: Worksite Enforcement Strategy. memos/worksite_enforcement_strategy4_30_2009.pdf (2) ICE news release, dated October 6, Secretary Napolitano announces record-breaking immigration enforcement statistics achieved under the Obama administration

120 $34 million fine paid for immigration fraud In 2013, Infosys Corporation, an Indian company involved in consulting, technology, and outsourcing, has agreed to a civil settlement of allegations of systemic visa fraud and abuse of immigration processes by paying a record settlement amount and agreeing to enhanced corporate compliance measures, announced U.S. Attorney John M. Bales. The $34 million payment made by Infosys as a result of these allegations represents the largest payment ever levied in an immigration case.... The investigation also showed that more than 80 percent of Infosys s I-9 forms for 2010 and 2011 contained substantive violations. $1 million fine for I-9 process inefficiencies In 2010, an ICE audit of an international retailer with locations in the United States resulted in fines of more than $1 million for technology-related deficiencies in the company s electronic I-9 verification system. A press release issued by ICE clearly stated the fines were related to inadequate compliance processes, not the hiring of unauthorized workers. Employers are responsible not only for the people they hire but also for the internal systems they choose to utilize to manage their employment process and those systems must result in effective compliance, said Brian M. Moskowitz, special agent in charge of ICE HSI for Ohio and Michigan. This settlement should serve as a warning to other companies that may not yet take the employment verification process seriously or provide it the attention it warrants. 3 (3) ICE news release, dated September 28,

121 The I-9 process can be paper or electronic. 121

122 The I-9 Process To comply with federal immigration laws, employers must complete and retain a Form I-9, Employment Eligibility Verification, for every employee hired after November 6, The form helps validate: 1) the individual s identity; and 2) the individual s authorization to work in the United States. An effective [worksite] strategy must do all of the following: For as long as an individual works for an employer, the employer must retain the individual s completed Form I-9. After the individual is no longer employed by the company, the Form I-9 must be retained either three years after the date of hire, or one year after the date employment is terminated, whichever is later. The Form I-9 must be completed within three days of an employee s first day of employment; however, final determination of work authorization status may take longer than three days. Until recently, only paper-based Form I-9s were used. Now, employers have the alternative of using an electronic process, which they can develop internally or outsource to a qualified third-party provider. 122

123 Ideas for winning the talent race. 123

124 E-Verify E-Verify is a federally developed online system that employers can use in combination with a Form I-9 to quickly validate employment eligibility. It works by automatically comparing Form I-9 data to data from U.S Department of Homeland Security and Social Security Administration records. It s available to all U.S. employers and participation is voluntary for most businesses; however, evolving state laws and federal regulations are requiring more and more employers to use E-Verify. Organizations must first enroll in the E-Verify program. Once enrolled, users can login anytime online and create a case. If individuals are authorized to work, the system usually returns an Employment Authorized result in seconds. If the system can t immediately confirm employment authorization, additional action may be required of the employer or employee before a final result is returned. Employers can access E-Verify separately via the E-Verify web site and submit individual inquiries, or access can be seamlessly integrated into a one-stop, electronic process offered by third-party providers such as First Advantage as part of the I-9 process. It is imperative that employers voluntarily using E-Verify do so consistently, meaning use it with every new hire. Arbitrary use could increase liability for discrimination claims. More than 225,000 U.S. employers of all sizes use E-Verify. About 1,000 new businesses sign up each week to use E-Verify. Source: U.S. Citizenship and Immigration Services web site. 124

125 States requiring E-Verify participation as of September 1, 2011 Arizona Mississippi South Carolina States that enacted legislation requiring various public entities/ contractors to use E-Verify: Colorado Florida Georgia Idaho Minnesota Missouri Nebraska North Carolina Oklahoma Utah Virginia 125

126 Should you go paper or electronic? 126

127 Two I-9 Options While there is no difference between the paper and electronic versions of the actual Form I-9, there are big distinctions in the type of process they support. Paper-based processes are dated and inefficient, yet for some smaller employers with a handful of new hires each year, they are easier to manage. Conversely, electronic systems are remarkably streamlined and efficient. They can simplify and strengthen I-9 programs by automating workflows, alerts and reminders, driving most employers with substantial hiring volume to adopt the technology. However, sometimes a hybrid system works best, such as an electronic system that prints hard copies for program management purposes. Paper Form I-9s Paper-based Form I-9s have traditionally been part of the standard onboarding process for all employers. Usually, a newly hired employee manually completes section 1 of a printed form on or before their first day of employment. The employer completes section 2 by the employee s third day of employment. If the employer is using E-Verify to determine employment authorization, information on the form must then be manually re-entered into the E-Verify system on a case-by-case basis. Once final work authorization is determined and documented on the Form I-9, the paper forms must then be manually filed according to retention guidelines, in case of a Form I-9 audit. For expiring work authorizations, employers must create a reminder process to ensure the forms are properly updated and compliant. If an employer operates in multiple locations, it must take care to standardize and document its process across all locations to ensure full compliance with federal regulations and all applicable state regulations. 127

128 Pros It s difficult to tamper with or alter paper forms. Paper is sometimes easier for small companies. Cons Opportunity for errors increases, due to illegible handwriting and duplicate data entry. Process inefficiencies are high, due to a number of manual tasks. Compliance monitoring is difficult, since a paper process offers minimal visibility. Program consistency is harder to achieve in multiple locations. Internal and external audits can be challenging and time-consuming, depending on size of employer. Data security and privacy of personal information must be proactively managed by employer. Electronic Form I-9s In the past decade, advanced technologies have emerged that enable an electronic Form I-9 process which can be easily managed over the Internet. While a few companies have internally developed their own electronic systems, most use automated systems developed and supported by qualified providers. Depending on the system utilized, an electronic process can automate most of the manual tasks associated with a paper process. Electronic forms can be ed to employees, completed online or at a dedicated onsite kiosk. Employees type their information, as opposed to handwriting it, and automated prompts won t allow them to submit the forms until all information is complete. Employers can easily initiate an E-Verify case within the system, without opening a new browser window. The E-Verify case can often be pre-populated using data from the Form I

129 Forms for all employees, including those in multiple locations, can be efficiently managed, monitored and stored using one online interface. Some systems also offer online storage of supporting documents such as copies of driver s licenses. Automated s remind employers about expiring work authorizations and purging documents after the required retention periods. Most electronic systems include the option to print the forms, since many employers prefer to keep hard copies within individual personnel files. Pros Increases program standardization and consistency with a centralized, automated system. Boosts efficiencies by replacing manual tasks with automated workflows, prompts and reminders. Enhances compliance with real-time process visibility via centralized Web interface. Supports easier audits with secure, organized electronic storage. Shifts bulk of responsibility for data security and privacy of personal information to the system provider storing the data. Enhances data accuracy with less data entry and handwriting. Ideal process for mid-size to larger employers, and decentralized organizations. Cons May not make sense for small employers with less than 100 employees. It can be easier to alter electronic forms; however, controls are available within most systems to limit this risk. 129

130 Side by Side Comparison of Form I-9 Options Program advantage Paper Electronic Promotes compliance with state and federal immigration laws Integrates with E-Verify for an easy, one-stop access Simplifies audit preparation Eases data security and administrative issues with secure online document storage Strengthens data integrity by reducing human errors Centralizes the storage and management of all I-9 forms and activities for all locations Offers instant program visibility Reduces manual tasks such as data entry Enhances compliance by issuing automated alerts for expiring work authorizations Boosts efficiencies by ensuring forms are complete and accurate Easier for some smaller businesses Easier for many mid-sized to larger businesses 130

131 Choosing the right solution to make the right catch. 131

132 Choosing the Right Solution Dozens of electronic I-9 solutions are on the market today, with some available through private companies as a Software as a Service (SaaS) and others available through leading employment screening providers. When choosing an electronic system, employers instinctively consider their internal requirements, structure and needs, along with industry standards and available technology. Here is an easy checklist to ensure the most important issues are covered when evaluating potential vendors, along with a few relevant questions to ask. Internal objectives An employer might need more help in areas such as auditing, and less help in others such as form storage. It s critical that employers assess: 1) the competencies of their existing I-9 program; and 2) their long-term program objectives. Use the resulting information to determine organization-specific system requirements and look for a flexible solution that aligns with those needs. Prospective vendor questions: Does the system allow users to easily print forms? What is your process for capturing or scanning existing paper forms and converting them to electronic format for online storage and management, and can it be done onsite? Can the system options be customized? For example, if an employer does not require E-Verify integration, can it be implemented without it, or vice versa? Company size/hiring volume If an employer processes a high volume of I-9s, it makes sense to ensure the system is technologically capable of accommodating the volume, along with any cyclical or seasonal hiring spikes. 132

133 Prospective vendor questions: What is your estimated annual server downtime due to technology glitches or overload? What is your estimated annual number of forms processed in a typical year? What is the availability of your customer support teams in the event of an issue? Can you integrate with E-Verify to streamline our I-9 process? Compliance and auditing All employers should understand organization-specific compliance requirements, based on location, industry and other factors. It is critical to ensure a system can fulfill these requirements and support a seamless successful audit, should one be initiated. Prospective vendor questions: Does your system include controls or alerts that automatically prompt users when forms are incomplete or incorrect? Can the system send automated alerts to remind users when visas and work authorization documents are about to expire? Can you lock and date stamp a form after the final work authorization status is determined to help prevent document tampering? What types of system reports are available to assist users with random internal audits? Data security A benefit of outsourcing an electronic system is that the vendor can store all the forms online. This relieves the employer of the day-to-day responsibility of securely storing electronic I-9s, but the employer must take care to fully vet the privacy and data security protocols of the system provider. 133

134 Prospective vendor questions: Do you have a data security policy, and if so, can you provide a brief overview? Do you credential your customers to ensure the people who have access to the system are valid business clients? What type of controls do you have in place to prevent unauthorized access to your system? Do you have a redundant backup system, should something happen to my files? What is your process for purging documents? Competitiveness This one is simple. Always find out why a system provider believes their system is best. Prospective vendor questions: What features, capabilities or options make your system unique? Is there anything that your system does better than other systems in the market? Do you have any metrics to support your claims? How many current customers do you support that are similar to the size, hiring volume, and industry as my business? 134

135 Chapter Review U.S. employers have a unique legal obligation to curb illegal immigration, since gainful employment is one of the biggest drivers of immigration activity. Federal and state immigration laws require employers to determine the employment eligibility of all new hires using the Form I-9. Additionally, the federally developed E-Verify system may be required. Employers must then manage those forms and accompanying paperwork as long as the individual works for the employer. Today, employers have options that push beyond a traditional, paper-based I-9 process to significantly streamline employment eligibility programs. Electronic systems are available that: Simplify and centralize the process for employers by connecting multiple office locations with one online resource for distributing, managing and storing Form I-9s. Strengthen compliance with immigration laws by using embedded controls, alerts and reminders to ensure forms are complete, correct and updated. Boost onboarding efficiencies by using automation to reduce manual tasks and the human errors associated with them. 135