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Top 10 Background Screening Predictions for 2016

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 2016, and what will have the greatest impact on the practice of human resources and employment law?

Here are Hire Image’s top 10 predictions for what’s still “hot” from last year and why, and what’s coming down the pike that demands attention and focus for 2016:

  1. “Ban the Box” initiatives will turn into “Fair Chance” policies

“Ban the Box” intends to create a situation where employers are required to wait until later in the hiring process before asking about an applicant’s criminal history. By removing the question about conviction history from the application, employers are unable to eliminate an applicant simply based on his or her answer and would be more likely to base the hiring decision on the applicant’s qualifications. As the movement has grown, so have its goals and requirements.  Rather than simply eliminating the criminal conviction checkbox, many of the laws now go further and require that an employer wait until after a conditional offer of employment to inquire about criminal history, limit the type or age of conviction records they consider, as well as conduct an individualized assessment of the applicant’s criminal past before choosing to rescind that offer. To date, seven states and the District of Columbia have implemented laws that impact private employers, and several major cities and counties have also taken up the cause within their own jurisdictions. San Francisco and New York City have adopted more comprehensive Fair Chance policies which proponents claim support a broader agenda of community economic development, criminal justice reform and civil rights protection. New “Ban the Box” laws introduced in 2016 will all likely include Fair Chance components. It is also expected that many of the current laws will be updated to incorporate Fair Chance components, as Philadelphia has chosen to do. 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 all current “Ban the Box” laws.

  1. FCRA-related enforcement and lawsuits will continue to surge

The year 2016 will see the continued trend of class action lawsuits brought against employers for alleged violations under the Fair Credit Reporting Act (FCRA). It will also usher in an era of increased activity by those agencies charged with enforcement.

As we predicted in early 2015, cases brought against employers for alleged violations under the FCRA proved to be costly given the lack of a cap on awards and no requirement to prove actual damages. Many high profile companies found themselves settling cases or preparing to defend themselves in cases initiated in 2015. For example, in April, Home Depot settled for $1.8 million in a case that alleged that their background check disclosure form contained extraneous information with a release of liability statement embedded in it. In July, Chuck E. Cheese agreed to pay $1.75 million for non-compliance with the FCRA requirement that the disclosure be a standalone form. In September, a case was filed in California federal court against Chipotle Grill, alleging that the background check disclosure was combined with another document and contained a release of liability statement.

While lawsuits alleging an improper disclosure form have been most prevalent due to the large number of applicants that can be associated with the violation, scrutiny will be focused on every aspect of the background screening process in 2016 and enforcement agencies will step up their efforts in a continued drive for compliance. In October of last year, the Consumer Financial Protection Bureau (CFPB) laid the foundation for what is to come when it ordered one of the largest background screening agencies in the country to pay $13 million in penalties and take corrective action to address alleged inaccuracies in the reports they provided. This corrective action was the first in the agency’s short history and might be a sign of more to come. The Equal Employment Opportunity Commission (EEOC) was also active last year, winning a case against BMW that alleged the employer’s background screening process caused a disparate impact under Title VII of the Civil Rights Act of 1964. Although the cases noted involve large employers, companies of any size are at risk and should frequently review their forms and processes to ensure that they are in compliance under the FCRA. They should also review the EEOC’s 2012 guidance regarding the use of criminal records in employment decisions.

  1. Data privacy and security will be a priority

The volume of personal information captured and stored by businesses will continue to grow in 2016 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 top of mind for every business.  Experian, Sony Pictures, Target and even the U.S. government have all experienced data breaches, underscoring how pervasive the problem has become.  In the breach at the Office of Personnel Management, personally identifiable information (PII), including Social Security Numbers, was stolen from the agency’s background investigation databases in June of last year, putting the victims at risk of identity theft and potentially compromising their safety. 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 data security challenges within the borders of the U.S., there will be concerns over the relationship between the United States and the European Union when it comes to the transfer of information over the Atlantic. In July of 2000, the European Union and United States entered into a data privacy pact known as Safe Harbor.  For 15 years, this agreement allowed businesses in the EU and U.S. to legally transfer data across the Atlantic, providing U.S. companies a means to “self-certify” that their practices for handling and transferring data met the more intense standards of the EU.  On October 6, 2015, Safe Harbor was declared invalid by the European high court as the result of a case that claimed the U.S. did not meet those standards. The European Commission is negotiating with the U.S in hopes of arriving at an agreement by the end of January 2016. They have also offered guidance on the transfer of personal data from the EU to the U.S. Unless an agreement can be made, enforcement action could be expected for those companies that continue to transfer data between the EU and U.S.

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). A copy of the standard, the policies and procedures, and measurements is available at

  1. The use of social media searches in background screening will increase

After the mass shooting in San Bernardino, CA on December 2, 2015 that left 14 dead, there was an immediate outcry and speculation that the attack could have been stopped if a social media search had been conducted as part of the visa background check on one of the perpetrators. With all of the media attention surrounding this case, employers may be compelled to consider adding social media searches to their background screening programs in 2016. 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 Pinterest, 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 that 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.

  1. Concerns and confusion around drug testing will increase as more states become “marijuana friendly”

Twenty-three states and the District of Columbia have laws legalizing marijuana in some form. Whether the law allows for medicinal use of the drug or for recreational purposes as in Alaska, Colorado, Washington, Oregon, and DC, employers will face increasing pressure to get in step with the prevailing beliefs of the community in which they operate while balancing that with the need to maintain a safe workplace. Many will grapple with the fact that there is no test which can indicate whether a person is impaired at a particular moment in time, so they are unable to distinguish if someone is getting high at work or while off the clock.  It will be important for employers to remember that, although marijuana may be legal in their state, they still have every right to maintain a zero tolerance drug testing policy and practice. In June of 2015, the Colorado Supreme Court corroborated this when it found in favor of Dish Network in a case brought against them by a medical marijuana user who was terminated after failing a drug test. Employers who review their policies often, make changes to ensure clarity, and communicate those changes will have a much easier time defending their position in the event they find themselves faced with a similar case.

  1. Bipartisan agreement and passage of criminal justice reform measures likely

There is not much Congress can agree on, but criminal justice reform appears to be a topic that unites both side of the aisle. Introduced in the Senate on October 1, 2015, the Sentencing Reform and Corrections Act of 2015 is one proposal that has garnered widespread bi-partisan support. Although the bill doesn’t explicitly include provisions that directly impact the background screening industry, it is part of a larger overall movement that will.  For example, late last year President Obama mandated that the HR department within the federal government delay inquiries into criminal history records until later in the hiring process, bringing “Ban the Box” to the national stage. It’s likely we’ll see the introduction of a nationwide bill to encompass private employers in the not too distant future as well. Increasing limitations on an employer’s use of prior criminal records, “Ban the Box” initiatives, and other criminal justice reform proposals will continue as both parties attempt to reduce recidivism rates and reintegrate the formerly-incarcerated into society. How all of these changes will specifically impact background screening is yet to be seen, but it’s inevitable that they will.

  1. Technology integration will increase efficiencies of background screening process

One extra keystroke or the need to access multiple systems in order to complete a process can add up to hours of wasted time, as well as increase the risk of non-compliance. As a result, there will be a continued focus on integration between background screening platforms and Applicant Tracking Systems (ATS), not only enhancing the flow of data between them, but increasing the efficiency of their users. With requirements continually evolving at the federal, state, and local levels, systems vendors will also seek to make the process of updating their applications faster and easier, ensuring that all of the latest information is available in the system at all times. Technology will continue evolving to support a “work from anywhere and from any device” mobile workforce model. Hiring managers should expect to be unchained from their desks when it comes to managing the background screening process and applicants should expect an easier, more transparent process from start to finish.

  1. On-demand workforce will impact the screening process

The on-demand workforce business model will find its way beyond the ride-sharing space and infiltrate nearly every type of industry.  With the shift in the way businesses and consumers think about how services are delivered and who provides them, a change in how background screening is handled is also predicted.  Having led the way into this new world, Uber has had a bright light shone on their practices and created much debate about what constitutes a valid background check.  The industry of background screening will be challenged beyond that, however. Onboarding of virtual employees will need to be fully electronic and faster than ever, requiring consumer reporting agencies to bring on new technology to support on-demand checks that can be processed from anywhere and from any device. Both the applicant and hiring company will expect the agency they work with to provide them with the tools that support the technology-focused world they live in and the frenetic, real-time pace they need to get up and running quickly. New ways to reduce the turnaround times on reports will also need to be found in order to keep up with the volume of new hires as well as periodic rescreens.  With one study estimating the on-demand workforce to reach 7.6 million by 2020, time is of the essence.

  1. Consolidation of background screening industry will impact service

As smaller consumer reporting agencies merge with those that are already some of the largest nationwide, service will inevitably be impacted. 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. One such merger transaction was announced on January 6, 2016, creating the world’s largest background screening company.

  1. A push by states expected to limit access to criminal data information

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, 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.  For example, Washington State’s HB2290 intends to “authorize agencies to limit responses to public records requests to requestors who reside in Washington, represent a Washington business, or represent the news media.” This restriction would mean that criminal records information housed in Washington courts would only be available to those consumer reporting agencies that are licensed and are physically located with the state, significantly limiting an employer’s options for background screening partners, as well as creating more administration and time in the collection process. Bills that are under review in both Iowa and Idaho will limit the access to criminal records access in a different way. Under both 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 2016 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 to guide you in the proper practice and use of employment-related screening results.

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