When it comes to background screening, drug testing and employment verification, human resource professionals and employment attorneys must keep pace with ever-changing rules, regulations, laws and more. What are the trends facing the industry for 2017, and what will have the greatest impact on the practice of human resources related to background screening?
Here are Hire Image’s 2017 top 10 predictions for what’s “hot” and why, and what’s coming down the pike that demands attention and focus for 2017.
1. Inquiring about wage history may soon be illegal as Gender Equity Laws spread
Gender equity is becoming more and more prevalent and we expect the trend to continue. This past year we have seen several jurisdictions passing ‘pay equity laws’ to close the gap on equal pay and strengthen protection against pay discrimination by employers. However, some jurisdictions are taking it a step further by enacting specific laws prohibiting employers from inquiring about salary history during the interview and screening process.
In August 2016, Massachusetts Governor Baker signed the Pay Equity Act, making MA the first state to pass legislation prohibiting employers from requiring salary history from applicants before receiving a formal job offer. The Act, which goes into effect on July 1, 2018, also allows employees to freely discuss their salaries with co-workers.
In December 2016, Philadelphia became the first city to prohibit employers from inquiring about an applicant’s wage history at any stage of the hiring process. A new chapter under the Fair Practices Ordinance: Protections Against Unlawful Discrimination will take effect in April 2017. Although wage inequity has been a hot-button subject for some time, Philadelphia’s movement towards ensuring that women and minority applicants receive equal pay in their city could mean it’s on its way to becoming an industry norm in the not-so-distant future.
In September 2016, US Representative Eleanor Holmes Norton introduced the Pay Equity for All Act of 2016. The bill’s stated purpose is to ensure that applicants’ salaries are based on their skills and merit, by assessing penalties against employers who ask applicants for their salary history during the interview process or as a condition of employment. Although the bill has not passed, it is an indicator of the pay equity climate employers may face in the future.
Salary inquiry restrictions will impact many employers nationwide in 2017 and beyond as more jurisdictions look at enacting similar legislation. Employers should review their policies and practices regarding previous employment information and how employment verifications are handled. Pay equity laws could impact the screening process and changes may be required.
Criminal justice reform was on the list in 2016, but we expect a shift in 2017 due to the change of party control in Washington. One of President Obama’s many priorities while in office was criminal justice reform. On January 5, 2017, the Harvard Law Review published Obama’s commentary, “The President’s Role in Advancing Criminal Justice Reform,” which emphasized just how important he felt these reforms were. Part of his overall focus on criminal justice reform included reentry with the establishment of The Federal Interagency Reentry Council. The group began as a Cabinet level working group in 2011, and was formerly established via a Memorandum from the President in April 2016. At the same time, the Office of Personnel Management (OPM) issued a proposed rule to ‘ban the box’ for all federal jobs.
In addition to the more recent policy changes, the EEOC, under Obama’s urging, established the 2012 Enforcement Guidance on the Use of Arrest and Conviction Records in Employment Decisions which had a dramatic impact on the background screening industry. Although we expect a different focus with the incoming Trump administration, the rules put into place under the Obama administration will remain in effect unless or until the new administration dismantles them.
We expect a shift to the private sector as large companies who signed on to the White House’s Fair Chance Business Pledge continue to honor their commitment to promoting fair chance hiring practices.The background screening industry’s hope under the new administration will be to have a seat at the table, along with employers, to help shape the discussions to be fair to all parties involved.
“Ban the Box” has been a popular subject for some time now, and while we have all discussed the ins and outs of the laws as they were intended, it appears that their adaptation and evolution will continue into 2017. As the “Ban the Box” movement has grown, many of the laws now go further than simply eliminating the question about criminal conviction history from the application. Requiring an employer to wait until after a conditional employment offer is made to inquire about criminal history and limiting the type or age of conviction records an employer can use in considering employment are just a few ways that the laws have expanded. It is also expected that many established “Ban the Box” laws will be amended to include “Fair Chance” components. Los Angeles is the latest to pass a fair chance ordinance that is by far the most restrictive in the country.
Employers will need to understand and comply with not only the requirements under the Fair Credit Reporting Act (FCRA) when it comes to background checks, but also the added requirements of those laws in the states, counties, or cities in which they do business. Click here for a list of current “Ban the Box” laws.
Although marijuana remains a Schedule I substance under the Controlled Substance Act (making it illegal under federal law), nearly half of US states have already legalized marijuana in some way. On November 8, 2016, four more states (CA, MA, ME, and NV) voted into law the legalization of recreational marijuana, leaving many employers wondering what the changing laws mean for their existing drug screening policies.
Although there is some legal gray area on actions taken in relation to discrimination laws and privacy rights, employers are still in control of their own drug policy destiny and are absolutely within their rights to maintain a zero-tolerance drug-free workplace. In Colorado, for example, the state’s high court ruled that employers’ internal drug policies trump the state’s medical marijuana laws, meaning that employers are within their rights to fire employees for using marijuana, even when not on the clock. Colorado previously passed a law that states employees cannot be fired for engaging in “lawful” practices, however, the court decided that the federal law takes precedence and placed the power back in the hands of employers. This is the first time a state has stepped in and further defined the rights of the employer as they pertain to the changing drug laws, leaving many to wonder when other states will do the same.
Things are trickier where medical marijuana is legal, and employers need to remain mindful of the Americans with Disabilities Act when dealing with employees medically cleared for marijuana usage. Employers should also be aware that drug use in the workforce, legal or otherwise, has risen for the third straight year. According to Quest Diagnostics, the world’s leading provider of diagnostic information services, employees within the United States workforce who tested positive for drugs was at a 10-year high in 2015, with marijuana usage up 26 percent since 2011. It is important that employers familiarize themselves with the laws within the states in which they do business and to review their own policies often, drafting clear and distinct language to ensure that employees have a firm understanding of what is expected of them.
A recent study conducted by Intuit predicts that 7.6 million American workers will be independent contractors by 2020. Spearheaded by millennials and a growing implementation of digitization, the gig economy has forced many industries to change the way that they do business while inspiring new industries to emerge at the same time. Although technically not identified as employees, these part-time contractors represent the companies they’re gigging for, and are oftentimes the only “face” of the company that the customer ever sees. In order to maintain the integrity of the gig economy, as well as the trust of those who serve as its customer base, it’s up to the businesses who rely on a freelance workforce to properly vet those in their employ, even when those individuals are not defined as traditional employees.
With a high turnover rate and a need for quick, efficient background checks, companies rooted in the gig economy should be prepared to adopt clear background screening protocols with a willingness to adapt the policies as local and national laws change. Many recent news stories, including an instance in Boston where a driver with a previous criminal conviction was accused of stabbing a passenger, further illustrate the need for companies to perform comprehensive background checks on their independent contractors.
Just as we predicted for 2016, the new year will see the continued trend of class action lawsuits brought against employers for alleged violations under the Fair Credit Reporting Act (FCRA). In a victory for employers, the Supreme Court of the United States ruled in May of 2016 that a plaintiff must prove “concrete injury” to sue in federal court under the FCRA. Employers should not let down their guard when it comes to FCRA-related lawsuits, as plaintiffs’ attorneys will creatively bring suits to show “concrete injury” and continue a rush to the courts for technical violations. Although most class action lawsuits that wind up in the news involve large, recognizable companies, employers of any size are at risk and should frequently review their forms and processes to ensure that they are in compliance with the FCRA. Employers should also review the laws in the states and cities in which they do business to ensure compliance with local laws as well.
The volume of personal information captured and stored by businesses will continue to grow in 2017 and, with it, the concern over keeping that information secure. Whether that information is stored online, in a file cabinet or in any other manner, securely maintaining and disposing of records that contain sensitive information will continue to be a top priority for every business. The Federal Trade Commission (FTC) is charged with regulation and oversight of business privacy laws and policies in the U.S. that impact consumers, including the Fair Credit Reporting Act which governs background checks and provides guidance on best practices businesses should follow to keep data secure.
In addition to following the FTC’s guidance on the proper data security practices, businesses that utilize a consumer reporting agency for their background screening services should be sure to partner with one that has achieved accreditation with the National Association of Background Screeners (NAPBS) Background Screening Credentialing Council (BSCC). The Background Screening Agency Accreditation Program (BSAAP) standard, policies and procedures, and measurements are available at http://www.napbs.com/.
As more and more individuals have a digital footprint, employers are curious to know the impact the individual will have on their organization before they hire them. It’s important to understand that searching the vast web of the Internet poses some inherent problems and introduces risk.
With new social media channels popping up almost daily in our tech-driven world, how will the investigation be defined? Should the search include Facebook, Twitter, and LinkedIn only, or should SnapChat, Instagram, and other channels be searched as well? Defining the type of information that is a cause of concern and a potentially disqualifying factor can also be a daunting task. For example, what political, religious, or social groups must the prospective employee belong to for a red flag to be raised? Once the criteria is defined, is it even possible to accurately determine an applicant’s views or intentions from a comment made or an article shared? What legal ramifications could arise from relying on that uncertain information to make employment decisions? These questions should be considered carefully in order to decide if this type of investigation is worth the effort and risk. Companies are encouraged to discuss these searches with their legal counsel and consider outsourcing this process to stay away from potential discrimination claims.
Smaller consumer reporting agencies will continue to merge with the larger “brands” of the industry, directly impacting employers, and not always for the better. The consolidation of business technology, account management roles, and support practices will cause at least short-term pain in the relationship between the “new” client and agency. Employers who could always expect to know the person on the other end of the phone when dealing with the smaller agency may now find themselves speaking to someone new each time they call for help, creating frustration and uncertainty. They may also find that support services are now outsourced to an overseas call center, creating potential delays in turnaround time as well as communication issues.
As goliath background screening agencies continue to expand and become more faceless and less responsive, their clients will seek out better and more personalized services where their needs are considered first.
In addition to the restrictions placed on the type of record or age of information that employers can consider when reviewing an applicant’s criminal history, a new obstacle for background screening appears to be on the horizon. Several states are considering proposals that, if passed, would further restrict access to criminal records by imposing new rules about who can have access to court records and what information those records will contain. Under many of the proposals, date of birth will no longer display in records, thereby eliminating a key element that allows background screening agencies to validate that the criminal record belongs to the applicant in question, and creating the possibility of an increase the number of disputes.
As you can see, the year 2017 promises to be a busy one in the background screening, human resources and employment law fields – and is already off to a fast start. Hire Image will continue to monitor legal and regulatory developments in federal, state and local jurisdictions and share those changes impacting the process of background screening.