Understanding Nuances of Locating Missing Pension and Benefit Plan Participants Without a Social Security Number

July 21 2016
Locating missing pension and benefit plan participants

Locating missing pension and benefit plan participants

by Thomas C. Lawson, CFE, CII

Under Title 29 CFR 4050.4 the diligent effort compliance requirement involves locating missing pension and benefit plan participants based on use of the participant’s social security number (SSN).

Having the SSN is very important because the entirety of the file chain is rooted in the SSN.

Also having the SSN makes the commercial locator service better able to identify your participant to an acceptable consumer reporting agency standard.

In recent years, identity theft has skyrocketed. This awareness has not been lost on the compliance or audit departments of the root sources of the identification information.

That includes the SSA’s Identification and Death Master File (DMF) sections. Even more importantly, credit bureaus and other source agencies that make a significant contribution to the successful locating of your missing participants have been effected.

This stands to reason because how can one administer the pension or benefit plan if one does not possess the participant’s SSN?

Just three reasons why an SSN cannot be located

1. What if a transposition error occurred somewhere in the chain of custody of the management or administration of a given consumer’s file? Possibly by the HR Department, Actuary or TPA and no one caught the error until services like ours made the discovery during a routine locate.

2. Your vested participant could have departed employment with the plan sponsor and for some reason the file went inactive. Then the participation was re-activated beyond 7 years and the SSN was lost because the employment file was destroyed as a matter of course.

3. The TPA, HR Benefit Department, or someone else in the plan administration chain tasked to locate the missing participants simply can’t retrieve the stored file(s).

Innocuous and innocent as these scenarios seem; they wreak havoc for any commercial locator service.

The kicker is that under all attributable rules, there is no provision anywhere for a mistaken or a completely missing SSN in the administration stream so how does one even get to first base in finding a lost participant?

Over the years we have invested at least as many legal dollars as we have algorithm dollars trying to figure out how to re-unite people with their pension plans. Even with ERISA and Labor Codes, there are many anomalies in uncharted water when it comes to locating someone without an SSN

Low-priced services are a waste of your time

While there are companies offering low-priced, locate services in concert with archaic and often labor-intensive manners, they often only do half of the job you require

Often their services rely on you to complete the puzzle using expensive administrative dollars to do so and most of these cheaper services don’t offer alternatives to an SSN search.

Being able to handle nuances and these anomalies plays a big part in successfully re-uniting people with their money with a minimum of expenditure and more importantly, time.

That has been our mission since we started EmployeeLocator.com in 1988 and is also the reason we created the Open Locate Platform which bases a search in criteria other than a participant’s SSN.

Employee Locator criteria for searches without an SSN

There is a bit of a rub in using non-SSN data to locate these folks, but the rub does not lie in the use, it lies in the access. Let me explain.

Today anyone who uses providers of credit reports, employment background checks, or commercial locator services, in fact – all end-users have to be properly vetted in order to be classified as a legitimate end-user of the service.

To further complicate things, commercial locator services do not technically fall under the Fair Credit Reporting Act (FCRA). So it ends up a potentially damaging consumer free-for-all if the commercial locator service does not maintain itself to an FCRA standard.

This is critical so that the consumer may have direct and unfettered access to whoever touches their personal information in the event that the consumer asserts any form of foul play.

Good news is that as long as any given end-user can justify the use of the consumer’s private identification information, and the provider can prove that it thoroughly determined that the service it provides was to a legitimate end-user of the information, the information remains secure.

The consumer is protected and most importantly, that consumer is sent down the road to interview other end-users of their personal information which may have resulted in a compromise.

With careful initial vetting of a given end-user we are able to provide current missing participant locate services to our market channel based not only on a participant’s SSN, but also now based on their name, date of birth, and/or name and former address.

We actually have special contracts with our data providers to expand the service base and we are subject to audit at their whim because of it.

Does doing it right increase the cost?

Once caveat that bears discussing is the cost. Using the SSN to connect the participant with his pension or benefit is the least expensive form of locating missing employees. Without the SSN, a potential drama known as back-end-compliance comes into play.

As a commercial locator service, in this context, using anything other than an SSN to locate a missing participant puts the locator service and the end-user in the highly compromising position of mimicking an identity thief.

It thus exposes the locator service (and its end-users) to additional scrutiny especially if the identity is actively under assault.

Under assault is defined as if at the time of the inquiry, theft of that person’s identity is already underway, or there is an active police case number assigned, or they are the subject of a law-enforcement sting operation.

Under these circumstances, the locator service and the end-user could come under the scrutiny of law enforcement or other equally as ominous governmental threats. Even when a locator service or the end-user’s involvement is clearly documented to be innocent, permitted, justified, proper and in the normal course and scope of their respective business models.

In the case of numbers 1 & 2 above circumstances happening you are likely going to have to bite the bullet as far as the increased cost is concerned. In the case of number 3, someone is going to have to determine if the increased costs are justified or if the archived file can be found.

In the end

albeit at a higher cost. As long as the end-user vetting is competent and everyone is on the same page, these alternate methods can be a lifesaver for the participant being rightfully reunited with their pension or benefit.

Thomas C. Lawson, CFE, CII is a Life-Member of the ACFE and the longest-serving member of the Editorial Review Committee for FRAUD Magazine. Tom is the Founder of APSCREEN, the nation’s oldest Factual Employment Screening firm, a term Tom coined to differentiate APSCREEN’s level of care in the screening process. Tom is also thought to be the longest-serving Negligent Hiring Expert Witness from the Improper Employment Screening and FCRA Compliance perspectives with his first case served in 1984. Tom’s CV is available for review here

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Is Your Employment Screening Company Inferior?

January 8 2016
The Fair Chance Act

The Fair Chance Act

by Thomas C. Lawson, CFE, CII

Your choice of an employment screening company, due to pending legislation called The Fair Chance Act, now more than ever is a critical decision that includes your provider being 100% FCRA 607 & 613 (a) (2) Complaint and 613 (a) (2) Capable.

The reason? Many Human Resource departments rely on candidate-disclosed, criminal histories as a basis to continue candidacy but the proposed Federal Law, which mimics the “Ban the Box” laws in several states and removes that available disclosure.

Simply put what that means now is if your background check provider is inferior, you have the possibility of missed records which could place you on the radar screens of a rapidly maturing Plaintiff’s-Attorney Bar.

Traditionally inferior background screeners use the disclosure to ‘lighten’ the depth of the search in order to save money. Shocking to most, this is a common practice by discount or low-end screeners and validates the concept: you get what you pay for.

With the recent bankruptcy of the Nations’ three largest background check companies, and with more likely on the way, it is a best practice to examine just exactly who you have hired to keep the wolves away from your front door.

Here is more on the proposed law:

Bipartisan, Bicameral Group of Lawmakers Unveil Legislation Aimed at Federal Contractors

Ban-the-box legislation has been introduced for the first time at the federal level, reflecting a broader trend witnessed in dozens of states and municipalities. On September 10, a bi-partisan group of lawmakers in both houses of Congress introduced the Fair Chance Act (S. 2021 / H.R. 3470) which would prohibit federal agencies or contractors from asking prospective employees about whether they have a criminal record before a formal job offer has been extended.

Once a conditional offer of employment has been made; an employer would be permitted to ask about the applicant’s criminal record and revoke the offer based on the results of a criminal background check.

The proposed law includes exceptions for sensitive positions including law enforcement, national security, and positions with access to classified information. Protection is provided in the bill for whistle blowers who report coworkers for not following the law and penalties range from a warning for a first violation to suspensions of increasing length up to a $1,000 fine for subsequent violations.

The Fair Chance Act was introduced by Senator Cory Booker (D-NJ) and Representative Elijah Cummings (D-MD). Co-sponsors of the bill are Senators Ron Johnson (R-WI); Tammy Baldwin (D-WI); Sherrod Brown (D-OH); and Joni Ernst (R-IA); Representatives Darrell Issa (R-CA); Sheila Jackson Lee (D-TX); Earl Blumenauer (D-OR); Bonnie Watson Coleman (D-NJ) Cedric Richmond (D-LA); John Conyers (D-MI), and Bobby Scott (D-VA).

The lawmakers supporting the bill said that as many as 70 million people with criminal histories may face barriers to employment and highlighted that 18 states and more than 100 local entities have already enacted similar measures; with private employers following suit by adopting internal company policies to ban the box.

The Fair Chance Act is currently pending in committee in both chambers and will be the subject of a hearing on October 7 in the Senate Homeland Security and Government Affairs Committee.

Call me at 800 277-2733 if you have any questions about your employment screening procedures.

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The Good, the Bad & the Ugly – Lease Defaults and Bad Debts

December 25 2015

by Thomas C. Lawson, CFE, CII

Lease Defaults for commercial tenants

Lease Defaults for commercial tenants

Lease Defaults-There’s an old adage out there that is due for a revision. “The more things change,  the more they stay the same” is actually no longer true in the context of that inescapable business dark cloud known as the “lease default, investment-gone-south, and/or bad debt.”

In financial circles these days, instead of hearing the instruction “go out and collect our money,” we hear all too often “if you can’t collect it, find a way to write it off!” Quite a change from old school thinking!

Those of you more seasoned professionals may wonder “how did things get this way?” You have a valid question. The answer of course is even more surprising and actually contrary to many business issues these days, we can actually trace the one cause that exists for this latest and (perceptibly) most devastating blow to creditor rights.

In short, the credit world has been turned on its ear primarily because of identity theft, and secondarily the response by the U.S. Congress to thwart what has been easily classified as the fastest-growing, most widespread crime in history. Many believe that identity theft is the black plague of modern times and except for some fairly swift moving legislation, it could actually have wiped out the entire electronic worldwide financial system if left unchecked.

The problem that comes into play however for creditors, lessors and investors stems from a unique anomaly in that the information needed to help a creditor complete the sale is identically the same information sought by identity thieves to exact their craft on unsuspecting victims.

Just as with the need to learn of bank accounts, stock portfolios and other liquid assets upon which this scourge will electronically manipulate, so exists the legitimate need of the creditor for the same information upon which to legitimately execute a collection effort, TRO or levy once a court judgment is received. That makes the creditor an unwitting accomplice in the eyes of Congress and ultimately the victim of the laws designed to protect the American consumer from identity theft.

Just as the passage of Gramm-Leach-Bliley Act and the updating of the Fair Credit Reporting Act via the Fair and Accurate Credit Transactions Act and other privacy statutes preclude identity thieves from gaining access to your financial information, at the same time legitimate creditors are precluded from access of the same kind of financial information seriously thwarting creditors? ability to collect the debt other than by the determination of assets and liabilities via public records.

This sets up a huge stumbling block on the road to the completion of the sale, IF the lessor, lender or investor is not savvy, and has not paid attention to an unlikely source for the ultimate relief of an noncollectable lease default, “investment-gone-south” or simple bad debt .

For purposes of this article, your bad debt is defined as follows:

1.Either the debt is deemed collectible and the pursuit of litigation viable through obtaining a collection due diligence report; or,

2.It is determined to be worthless by virtue of the same report.

Now when discussing #1 above, this course of action is usually referred to as a “litigation determinant” report, or a report designed in concert with your independent knowledge to lead you to the determination as to whether or not to charge-off or litigate the debt.

It is usually supported by the discovery of public record based asset(s) which may include real property, vehicles, vessels, aircraft, other businesses; and is “netted” by a corresponding determination of the offsetting liabilities such as mortgages, competing creditors (including tax liens, judgments, competing litigation, etc.) providing a thumbnail net worth position of the debtor.

#2 is the worthlessness or deductability part in the title of this article!

Now enter the Internal Revenue Service. The IRS Publication 535 entitled, “Business Expenses,” Chapter 10, Section 5; sub categorized as “When a Debt Becomes Worthless,” states:

This means that the IRS has given creditors a wonderful way out of a bad debt by no longer requiring a creditor to go through an expensive court process in order to obtain a worthless judgment previously required to legitimately write-off the bad debt.

Remember what it says in IRS Pub. 535:

“You do not have to wait until a debt is due to “determine” whether it is worthless

“…A debt becomes “worthless” when there is no longer any “chance” the amount owed will be paid.”

Pure and simple it means that as long as you perform “Collection Due Diligence? in the form of Lease Default Reports, Contract Due Diligence Reports and/or Investor Due Diligence Reports to determine if a debtor is insolvent, and the debt is determined to be worthless, you NO LONGER have to go to court to prove up the bad debt, and that is easily accomplished through a decent Collection Due Diligence report in any of the styles cited above.

This also means that the landscape of the pursuit of assets in satisfaction of the debt has changed forever, since you now only need to show if there would be sufficient attachable assets less liabilities upon which to determine if the debt is worthless. Naturally, if you do identify attachable net assets upon which to levy, your decision to pursue more aggressive collection efforts is justified and the course is charted by the same report.

This fact combined with the lack of availability of banking and financial (liquid asset) information as a result of the Financial Privacy laws other than in the public record (UCC filings) and no easily available credit report, means that the determination of the worthlessness of a debt can be reported by a third party through research of the public record.

And, in terms of what the IRS looks at as viable due diligence, third party is key and tantamount to an easy charge-off.

So while you may wish to have the scourge of identity theft dispatched in favor of your ability to collect the debt, you may thank the IRS for recognizing that the maze of privacy laws has seriously stifled creditors to the point that all you need to do now is determine the worthlessness of a debt in order to write-it off.

The good news for creditors is that rather than spending $5 to $10 grand and a lot of wasted time to get a worthless court judgment, you can spend 5 to 10% of that figure to determine if you should pursue further efforts to collect it — or write it off.

Finally, relief for creditors.

For a .pdf or copy of IRS 535, please go to the following website:


* What you MUST know about the use of Consumer Credit Reports and “Ancillary” Credit Reporting Products.

As to personal guarantors, recently, the U.S. 9th Circuit Court of Appeals upheld new language in the FACT Act, which clearly defines the word “credit”. As a result of the new definition, the position that is being advocated is that the “collection of an account” is a permissible purpose to obtain a consumer report only when the collection is in connection with a credit transaction.

Simply put, this means that, unless a personal guarantee was obtained, and a Consumer Credit Report was authorized and obtained prior to issuing the credit, or securing the lease and/or tenant improvements a credit report may NOT be obtained for collection purposes. Simply put, unless a copy of the original credit report obtained prior to the issuing of the credit or guarantee is provided along with a copy of the original signed (appropriate) consent (obtained at the outset of the credit qualification process), a collection credit report cannot be included in this report, as a matter of law.

** What you MUST know about “Bank Account or other “Liquid Asset” Searches

Let’s remove the mystery surrounding locating bank accounts which are only discoverable through publicly available Uniform Commercial Code Searches, the ONLY legal method available under Federal and State Laws. In the event a bank is found through legal means, attached to the report will be suggested language for use in Writs of Execution and Restraining Orders. In the case of a business bank account search, sometimes banking associations are revealed through the Business Credit Reporting service utilized in the report and thus writs may be placed on the discovered institutions. Business bank accounts are “quasi-exempt” from the protections afforded Consumers (Individual account holders), and are thus available sometimes through an instruments such as a Uniform Commercial Code Financing Statement and/or a business credit report, however the methods of obtaining those accounts (“sourcing through a bank contact, and/or ‘pretexting’) are still highly illegal under the G-L-B Act.

*** A Word About Legal/Case-Law Database Information Providers

As law firms seek new ways to increase legitimate billable hours, and as a natural outgrowth of the advancing support professions, such as paralegals, and with Shareholder meetings more often discussing ways to improve the bottom line, law firms are easily lured into the opportunity to have their paralegals and legal assistants perform once “investigator-traditional” services, such as asset searches, locating people for service of process, etc. This phenomenon has been spurned quite effectively by responsive marketing programs asserted by the major on-line case law houses, which provide “one-stop shopping” for law firms on the go.

Not a day goes by when we don’t hear:

“please conduct a collection due diligence for us, we have spent thousands of dollars in time and fees clicking our favorite case law site, only to end up with information we don’t feel we can depend on, and which we can’t in good conscience bill our client for” Sound familiar?

About the author:
Thomas C. Lawson, CFE, CII lives for the purveyance of “quality-yet-controlled” legally reportable information. As a Certified Fraud Examiner, and Certified International Investigator Mr. Lawson is the longest serving member of the Editorial Review Board of FRAUD Magazine, a Life member of the Association of Certified Fraud Examiners a founding member of both the National Association of Professional Background Screeners and the Public Record Retriever Network; a Friend of The Institute for Real Estate Management, Former Chapter Chairman of the Orange County Chapter of the American Society for Industrial Security, Professional Member of the Professionals in Human Resource Management Association, and the Society for Human Resource Management, and is the Founder & CEO of APSCREEN, the nation?s oldest, continuously operated factual employment screening firm, with divisions specializing in tenant qualification, due diligence, fraud examination and expert witness testimony.

Lawson was a civilian research contractor of record for the Charles Keating/Lincoln Savings matter, the drafter of the employment screening and “asset search? guidelines for the civilian asset disposition contractor of record for the Resolution Trust Corporation and has appeared in many national television and radio shows, as well as has been published extensively throughout his career and can be reached through www.APSCREEN.com for presentations.

To review our Commercial Tenant Screening services go here: http://apscreen.com/tenantscreening/commercial/

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How to Handle Paperless Employment Screening

November 5 2015
Paperless Employment Screening

Paperless Employment Screening

Posted with permission taken from a conversation from the CALHR Forum

A*: My company is working toward the goal of becoming paperless. How have your HR departments accomplished this and how is it working out? I look forward to your responses. Thank you all very much. I appreciate it.

Tom: The biggest problem that I see online having undertaken the paperless route last year is that in our business, many/most times we need a live signature to verify past employment and with schools to prove consent for the release of transcripts, degree verification, etc.

  • While Electronic Signatures for consent purposes for employment-related Consumer Reports (background checks) are still not yet strictly legal under the FCRA (no matter what the FTC says), many are tempting fate by executing consent through an eSignature and learning that when it comes time to verify past employ men, and education that they are having to go back to the candidate for a wet signature, which is a pain. We believe that it is just smarter to obtain the written consent at the outset supplementary to the eSignature that way we are in place and can move forward; faster once a signature is demanded by a prior employer or educational institution.

Other than that, an HR paperless process undertaking is best expedited through the use of a good HRIS and ATS system, such as Yardi, iCIMS etc.

Keep in mind, A* that going paperless is a fundamental change in the way one does daily business so be patient and take the time to ensure that each and every piece of paper you substitute for an electronic data bit is planned and that the data is backed up at least three times; that way your redundancy will ensure seamless and uninterrupted operational flow.

Imagine losing the only file you have where you once had paper and can’t put your hand on a critical document.

Not pretty. Hope that helps!

A*: This is extremely helpful, Tom. Thank you

Tom: My pleasure – I never realized what a fundamental change is effected when you get rid of paper; but the most direct upside benefit to doing that is the cost, space and time savings.

At APSCREEN, we have gone paperless gradually, which has been terrific for us – so my advice is to not be in a hurry to go paperless, do it gradually.

Looking just at the paper, toner cartridge (for printers and fax machines) and telephone time charges for faxing in and out, our costs associated with the processing of paper have been reduced by almost 80%! That translates to maintaining our ability to reduce prices rather than increase them and that is a big deal if you want to maintain fixed bid contracts like most of our Aerospace clients do.

File storage costs have also been reduced by 95% because we now store our files electronically (we shred after scanning) so we have eliminated all but a small percentage of square feet of floor space where file cabinets and Bankers Boxes once stood.

We did see a one-time cost increase – we shredded most of our paper files over the past two years after scanning those files so where we once stood in a sea of file cabinets in our lobby, I can add more cars! (For those  on-clients who have not visited us, our lobby is full of collector and classic cars which is the only way to have a lobby in my view [Big Smile] with the only drawback being that when we get a visit, we rarely ever get around to talking about  employment screening – everybody wants to look at the cars!)

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APSCREEN Celebrates 35 Years Aerospace Employment Screening

April 27 2015
Aerospace APSCREEN Employment Screening

Aerospace APSCREEN Employment Screening

Aerospace Screening – Tom Lawson, CEO APSCREEN says, “For over 35 years APSCREEN has screened the professionals who make and service the critical stuff that America’s Space & Defense Programs and the Military depend on.”

Line personnel, designers, engineers, assemblers, supervisors, managers, strategists, and software developers at every level who have been responsible for making you safe in the air, on the ground, on the water; in battle and during peace time have been screened thoroughly by APSCREEN.

Those who build and service rocket engines, aircraft, ships, command systems, and other critical components of a free society have been screened through the APSCREEN so as to ensure that not only qualified people are put in the loop, but those whose backgrounds demonstrate that they run their personal lives as carefully as they ply their craft.

“With the almost daily changes in compliance and the background screening business drawing more and more attention to itself in the civil and bankruptcy courts, it is nice to have APSCREEN in your corner,” Lawson said.  “Unlike most other employment screening agencies, APSCREEN has never been sued, has the same ownership since 1980, the same business model, the same thorough attention to detail, the same forward-compliant thinking and the same amazing customer service – and has been long recognized as the employment industry’s gold standard.”

Many of America’s core contractors and thousands of others have been part of the APSCREEN family for over our 35 years and understand completely how background screening is an essential and critical component of competent hiring which should not be left up to amateurs.

There is only one employment screening company like APSCREEN.

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Government Accountability Office (GAO) Releases Report on Criminal History Records

April 1 2015
GAO Release Report on Criminal Records

GAO Release Report on Criminal Records

by Thomas C. Lawson, CFE, CII

Criminal History Records – The GAO, a watchdog that investigates how the federal government spends taxpayer dollars, released a report in February 2015 on the use of criminal background checks titled ‘Criminal History Records: Additional Actions Could Enhance the Completeness of Records Used For Employment-Related Background Checks (GAO-15-162).’ The complete report from the GAO is available at http://www.gao.gov/assets/670/668505.pdf

Among the many other things that this report provides (both extraneous and salient) what I take note of most is that, in addition to standardized protocols for those able to access government criminal records – that the Federal government and the States should be policing themselves so as to ensure better reporting and that both the States and the Fed are going to have to follow the same transparency, thoroughness and compliance protocols that we in the private sector have to follow in screening employment candidates.

As we all know, the Feds rely on the States to contribute records to its internal repositories to assess candidates for government service but the GAO study clearly extolls that even the NCIC, FBI Identification bureau and other internal repositories used to vet the criminal backgrounds of its candidates are indeed fallible and can contribute outdated, false, misleading or otherwise damaging information on prospective candidates.

This report also suggests that certain qualified industries in the private and quasi-public sectors (“qualified” to access the internal repositories) are in the same category as the government, and in the GAO’s usual way, suggests that completeness should be the order of the day even though it says it with more words than necessary for those who can breathe and move toward light.

Further and what is not really discussed but one has to believe is part of the thinking process (just as with the private sector), is that the Plaintiff’s lawyers are circling and the GAO realizes it so the GAO’s new mantra is that it is about time those who use the State and Federal record access to vet candidates in sensitive industries, live up to the same standards that we in the Consumer Reporting industry have been required to live by ever since the enactment of the Fair Credit Reporting Act on 26 October, 1970.

To those very few of us who live and die by the belief that Contemporaneous Notice is no substitute for a thorough records search at the courthouse, and report ONLY under the FCRA 607 & 6143a2 standard this is no big deal, in fact in 1980 when APSCREEN started, we screamed the need for thorough services like ours because of the gross inadequacy of both State and Federal criminal repositories’ records that were being researched in MILSPEC and Aerospace contexts.

The incidences that we have reviewed where agency records failed are legion since we started in 1980 and the most telling of all is State of Nevada v. Wisenbaker where local, state and Federal Law enforcement records missed multiple convictions in multiple separate jurisdictions and which resulted in one of the most horrifying multiple child molestation cases in Nevada resulting in multiple life sentences adjudicated upon Larry Wisenbaker, a man who in the words of the Nevada Attorney General was ”The most heinous sex offender in the history of the State of Nevada.”

In this case I was the expert witness of record in the ensuing civil case against St. Jude’s Ranch for Children who hired Mr. Wisenbaker to oversee a cabin housing four troubled boys and where most of the sexual assaults took place.  When conducting a routine background check,  St. Judes’ asked the Henderson, NV Police Department to fingerprint Larry Wisenbaker and the record came back clear, even though he disclosed that he was convicted of felonies on his employment application.


Our opinion? Whoop-De-Diddly-Dee – just another government report trying to get amateur CRA’s and the State and Federal repositories to do the job right, which they should have done, imprimis.

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More on Ban the Box Law and Hawaii Court Decision

March 18 2015
Ban the Box and Hawaii Supreme Court Ruling

Ban the Box and Hawaii Supreme Court Ruling

It’s all the rage – employers high and low are concerned that their rights are being eroded by virtue of some grand plan to undermine the American employer through this recent legislation.  Sorry conspiracy theorists but nothing could be further from the truth!

Actually when you look at the underlying theory of it, these laws make perfect sense and essentially forces a hiring manager to do what he or she should have been doing all along.

Granted lawsuits filed under this statutory discipline are fact-specific but generally, the concept should be an easy one for most HR professionals to assimilate — should you be seasoned enough to avoid the kinds of knee-jerk reactions that result in the promulgation of these ever-encroaching laws.

“Knee-jerk” in this case means that just because you learn that a candidate has been convicted of a crime that is no reason to categorically deny employment  just because of the conviction unless the conviction clearly applies to the job description.

In essence what “ban-the-box” does is now force decision makers to apply logic and commonsense to the hiring process and, specifically, to reasonably and thoughtfully determine whether or not a particular criminal conviction applies to a given job description; as well as be able to justify any decision to eliminate candidacy based on a given conviction.

When we started APSCREEN in 1980, one of the many mantra’s we espoused to our clients was to apply appropriate ‘tests’ to determine if a particular conviction would affect the candidate’s ability to execute his or her duties and/or provide undue risk to the organization, the safety of customers, clients and invitees.  We advised this basic principle because we felt that  as the Reporter, we had a duty to advise our clients to use the records we provided judiciously and to not simply throw the baby out with the bathwater meaning that sometimes good people could be missed if more careful logic wasn’t applied to the hiring process.

In:  ZAK K. SHIMOSE,vs.HAWAIII HEALTH SYSTEMS CORPORATION dba HILO MEDICAL CENTER, SCWC-12-0000422;  the Court held that in order to use a criminal record in the determination of further candidacy:
“the conviction record (must) bear a rational relationship to the duties and responsibilities of the position.”

This seems to be the prevailing conclusion of the most of the courts around the country which generally favor the more thorough reasoning process in determining the applicability of a given conviction as it might relate to a given position.

Sound familiar?  It should – since the courts in these instances are closely following benchmarks established in the EEOC’s April 25, 2012 Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII but are more liberally applying these concepts to job descriptions instead of simply limiting them to Title VII issues.

All that has really changed for the seasoned HR professional is that the justification used to eliminate candidacy can be more heavily scrutinized by third parties and ultimately, the courts.

Of course, as with any reasonable approach to such a law, it is important to be mindful (and not to be scared away from the extremely valuable tool of criminal background research) that even though what you decide may be second guessed in the future, NOT to forget that if a reasonable set of guidelines is applied, damages are usually minimized by the logic of the process and the reasoning.

In our view, even though you may be second guessed someday by a Plaintiff’s attorney or Court, if you use sound reasoning practices and sensible logic in your decisional process,  while a trier of fact may not agree we believe that fewer or no damages will be assessed if the logic was not faulty; but rather ultimately determined to be a difference of opinion.

And don’t forget to apply the tried and true rule that clearly eliminates most potential problems in this and most other areas of the law, aside from whatever factors may influence your decision, always find the best and most-qualified candidate for the job based on ALL factors, not just one, or a few. That means you can still do what your gut tells you, just don’t let your gut be guided solely by what could later be determined to be an irrelevant criminal conviction.

Bottom line?  Follow the law, carefully determine if a given conviction applies to any aspect of the proposed position,  and make sure that if you do get rid of an applicant because of a criminal conviction that you document your reasons for candidacy denial based on it. Don’t let the law intimidate you.

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More Accurate Credit Reports? National Consumer Assistance Plan Announced by Three Major Credit Bureaus

March 17 2015
National Consumer Assistance Plan Announced by TRW, Transunion, Experian

National Consumer Assistance Plan Announced by TRW, Transunion, Experian

by Thomas C. Lawson, CFE, CII

More Accurate Credit Reports – On March 9 Equifax, Experian and TransUnion delivered a press release stating they plan to enhance their ability to collect “complete and accurate consumer information.” The idea is to give you, the consumer, more transparency as well as the ability to interact better with the bureaus regarding your own credit report.

The press release stated, “The National Consumer Assistance Plan we are announcing today will enhance our ability to offer accurate reports and make the process of dealing with credit information easier and more transparent for consumers,” said Stuart Pratt, President and CEO of the Consumer Data Industry Association, the trade association representing the consumer data industry, including the three national credit reporting agencies.

“While we are pleased that the most recent comprehensive study by the Federal Trade Commission showed that credit reports are materially accurate 98% of the time, we are always looking for ways to improve our procedures, and this consumer assistance plan will allow us to do that. While all three nationwide credit bureaus have been and continue to operate in compliance with the applicable federal and state laws, we have never hesitated to go beyond the letter of the law to voluntarily improve the existing credit reporting environment.”

Some of the benefits consumers will experience include being able to get a free credit report once a year; as well as better ability to dispute information including receiving results of a dispute. The bureaus will also focus on an enhance dispute process for those consumer who are proven victims of identity theft.

Check out the full press release here.

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Arrest Records – U.S. Laws Regarding for Employment Screening

January 22 2015
U.S. Guide to Use of Arrest and Conviction Records for Employers

US State Guide to Use of Arrest and Conviction Records for Employers

Reprinted with permission  Fisher & Phillips LLP

Arrest Records – Fisher & Phillips LLP has created an invaluable document for employment screening purposes that outlines the laws employer’s need to know regarding the use of both arrest and conviction records across the United States.

This chart gives an overview of laws affecting employers’ abilities to inquire into the criminal history of applicants and employees. It covers arrest as well as convictions records in every state.

For example in California employers may ask about arrest records for which the individual is out on bail or when a trial is pending.

Employers, however, may not ask about or use:

1. Arrest or detentions not resulting in convictions; or

2. Arrests involving a successful completion of pretrial or post-trial diversion programs.

In California, for conviction records, employers may not ask about or use:

1. Certain marijuana convictions over 2 years old;

2. Information concerning referral to or participation in any pretrial or post-trial diversion program;

3. Convictions that have been legally sealed, expunged, or statutorily eradicated (per non-discrimination regulations); or

4. Misdemeanor convictions for which probation has been successfully completed or discharged (per non-discrimination regulations).

Public Employers: A state or local agency may not ask an applicant to disclose, orally or in writing, information concerning the conviction history of the applicant, until the agency has determined the applicant meets the minimum employment qualifications, as stated in any notice issued for the position. This prohibition does not apply to any position within a criminal justice agency, or for anyone working on a tract basis for a criminal justice agency.

Clearly this is valuable information for all employers who do employment screening and we want to sincerely thank Fisher & Phillips LLP, Attorneys at Law, for agreeing to let us share this document with you.

Here is a link to review The Inquiry into or Use of Arrest and Conviction Records in Public and Private Employment Screening by State.

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Tennessee Passes Employer Privacy Act S.B. 1808

December 25 2014

These new laws indicate a growing trend that restricts employers from accessing applicant’s and employee’s personal online content.

In April 2014, Wisconsin became the 13th state to adopt a social media password protection law and subsequently, Tennessee has signed similar legislation.

This Tennessee law, which took effect on New Year’s Day 2015, is called the Employee Online Privacy Act of 2014 (S.B. 1808) and contains many similar prohibitions found in similar state laws but has some restrictions that even small employers must comply with.

This new legislation commonly prohibits an employer from requesting applicants or employees disclose their passwords for personal internet accounts.

But TN law makes some finer amendments including prohibiting an employer from requiring that applicants or employees “add the employer to the employee’s or applicant’s list of contacts associated with a personal internet account.”

Employers are also prohibited from requiring applicants and employees to “permit the employer to observe their restricted online content after they have access an online account.”

The full bill can be obtained here: http://www.capitol.tn.gov/Bills/108/Bill/SB1808.pdf

What the legislation does not prohibit is asking applicants to change their privacy settings so an employer can have permission to access a social media account.

Philip Gordon of Mondaq reports that, “In addition, the law broadly prohibits employers from taking any adverse action against employees, failing to hire applicants, or otherwise penalizing an employee or applicant for not permitting access to their personal online account in a manner prohibited by the statute.”

As of now, it is unclear how the new Employer Privacy Act laws will be enforced.

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