Need to Know!

Categories for Employment Screening

May 23, 2016 8:38 am

Credit Inquiries – How They Affect Your Credit Score

One of the most common questions from potential renters is whether their rental application will affect their credit score. Understanding why a rental application could affect a credit score requires a basic knowledge of credit inquiries. There are two types of credit inquiries (hard and soft) which can occur when credit is accessed. “Hard” Inquiries – These occur when you apply for credit or other services. A few examples of applications which will create a “hard” inquiry: auto loan applications mortgage loan applications rental applications credit card applications “Soft” Inquiries – These occur when your credit is pulled without the intention of extending new credit or being considered for a lending decision A few examples of when a “soft” inquiry is created: Pulling your credit yourself Credit accessed for employment purposes Credit accessed for insurance purposes Pre-screened offers of credit Based on what we learned above about credit scores, it... View Article

March 18, 2015 12:01 am

Accuracy of Consumer Reporting…What’s the Fuss?!

The Fair Credit Reporting Act (FCRA) has long required that Consumer Reporting Agencies (CRA’s) and “furnishers” of consumer data exercise care in collecting, storing, and reselling consumer data. Section 607. Compliance procedures [15 U.S.C. § 1681e] (b) Accuracy of report.—Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. Section 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i] (a)(1)(A) In general.— Subject to subsection (f), if the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly or indirectly through a reseller of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current... View Article

February 26, 2015 12:10 am

Employment Screening – A Legal & Regulatory Minefield Part 2 – The Beginning!

The hiring decision is obviously important – to employers and prospective employees.  Good decisions are the result of good (complete and accurate) information and a selection process that leads us safely through a legal and regulatory minefield – both of which are addressed in Part 1 of this series.  Part 2 (this post) speaks to the reasons behind the process. The Dilemma “Negligent hiring” is a well-established cause of action.  A quick internet search on key words “negligent hiring” and “criminal background” leaves no doubt. Ironically, steps taken to mitigate the risk of the negligent hiring claim increase the risk of a “disparate impact” discrimination claim – wherein a “facially neutral” business practice – such as use of criminal records for employment screening purposes – is found to have a disproportionate impact on one or more protected groups. “Business necessity” is the only defense against a “disparate impact” claim.  According to the Equal Employment... View Article

February 9, 2015 8:28 pm

Employment Screening – A Legal & Regulatory Minefield – Part 1 – The End!

A failure to thoroughly vet prospective employees can do considerable harm to a business.  Imagine for a moment that an employee commits a serious crime against persons or property and that they did so within the scope of their employment.  Imagine then that there existed a “discoverable propensity” (to commit such acts) and you didn’t even look! Most employers conduct employee background checks these days.  A failure to do so is hard to defend, therefore, should you be faced with a negligent hiring claim.  At the same time, the legal and regulatory environment for employment screening is growing increasingly complex. It is no longer enough to conduct employment background checks.  Those checks must be thorough, accurate and, equally important, “legally compliant” – which can (but doesn’t need to) be overwhelming – due to differences in state law. There is a path to run on, however, that will in most instances deliver the desired... View Article

December 12, 2014 10:25 pm

FCRA Accuracy Requirement & Instant Tenant & Employee Screening Reports

Tenant screening reports typically include a consumer credit report from one of the three major credit bureaus, a civil (eviction) records search and a criminal records search. More comprehensive tenant screening reports may include employment verifications, rental references and  a recommendation based on the landlord’s rental criteria. Tenant screening companies are specialized “Consumer Reporting Agencies” (CRA’s) – as defined (and regulated) by the Fair Credit Reporting Act [15 U.S.C. § 1681e] – commonly referred to as the FCRA. Section 607(b) of the FCRA requires that… “Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” The Consumer Financial Protection Bureau is tasked with enforcement of the FCRA. Much of the focus is on accuracy, of course, since the CFPB recognizes (as Congress did when crafting the FCRA) that the banking system and,... View Article

November 21, 2014 10:28 pm

Avoid Unintentional (Disparate Impact) Discrimination – It is Good Business!!!

Introduction There is often a visceral reaction by landlords and employers to legislation or regulatory activity that would limit use of credit and public records data for tenant and employee screening purposes – even when there is little evidence that doing so is effective.   Limits these days are often associated with the disparate impact legal theory. Under this theory, a business practice that has a disproportionate (and negative) impact on protected individuals can form the basis of a (housing or employment) discrimination claim.  The defense against such claims is “business necessity”, but only when there is no practical alternative – no way to accomplish the same thing without (as HUD calls it) a discriminatory effect. Analysis Assume for the sake of argument, that the courts or regulators are right in entertaining certain claims based on the disparate impact theory – that there is no correlation between use of certain information and... View Article

April 18, 2014 11:04 pm

FCRA Accuracy Requirement – Recent FTC Enforcement Activity

Section 607(b) of the Fair Credit Reporting Act [15 U.S.C. § 1681e] (FCRA) reads as follows: (b) Accuracy of report.—Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. It is hard to argue with the spirit of this provision.  Tenant and employee screening reports impact individuals when they are most vulnerable – in their search for housing or employment.  That said, landlords and employers have the right (and duty) to thoroughly vet prospective tenants and employees – to protect themselves, residents, employees and clients. We rely on our screening company to provide the information needed to adequately screen prospective tenants and employees.  If that data is flawed – if it is either incomplete or inaccurate – someone gets hurt.  Landlords and employers are negatively impacted either way – whether... View Article

April 4, 2014 5:34 pm

Tenant Screening – Washington Legislature Further Limits Access to Juvenile Records

The Washington legislature passed (and the governor signed)HB 1651, further limiting access to juvenile records for tenant screening purposes. SB 1651 modifies RCW 13.50 by adding a section that requires the court to hold regular “sealing hearings” and to “administratively seal” juvenile court records at the first such meeting after “…the latest of the following events: The respondent’s eighteenth birthday; Anticipated completion of respondents probation, if ordered; <and> Anticipated release from confinement.” Under the new law, the court shall enter a written order sealing an individuals juvenile court record if one of the offenses is not at the time of the offense: A Most Serious Offense, as defined in RCW 9.94A.30;/li> A sex offense under chapter 9A.44 RCW; or A drug offense, as defined in RCW 9.94.030 – which in turn refers to RCW 69.50 (the Uniform Controlled Substances Act) RCW 9.94A.030 defines “Most Serious Offense” as any of the... View Article

March 14, 2014 7:21 pm

Consumer Financial Protection Bureau (CFPB) – Notice to Users of Consumer Reports

The Fair Credit Reporting Act (FCRA) imposes significant obligations on landlords and employers who use Consumer Reports, as defined by the FCRA.  Tenant and employee screening reports clearly fall within the definition of a Consumer Report.  The Consumer Financial Protection Bureau (CFPB) publishes a document titled “Notice to Users of Consumer Reports: Obligations of Users under the FCRA“.  It is a nicely organized summary of requirements imposed on landlords and employers (among others) who rely (in whole or in part) on tenant and employee screening reports to decide whether to hire or grant tenancy. The CFPB (and FTC) have become quite vigorous in their enforcement of the FCRA, so it pays to review the Notice to Users… from time to time.  Here are a few of the high points. Permissible Purpose Users must have a Permissible Purpose (as defined by Section 604 of the FCRA) before procuring a Consumer Report.  ... View Article

January 23, 2014 5:58 pm

Limits on Access to Juvenile Records – Washington State

Washington lawmakers are again considering limits on access to juvenile records.  House Bill 1651 (SB 1651), originally introduced in 2013, has been reintroduced in 2014. SB 1651 states the “The official juvenile court file of any alleged or proven juvenile offender shall be confidential unless the juvenile has been adjudicated of a sex offense… a serious violent offense as defined in RCW 9.94A.030, arson in the first degree or criminal solicitation of or criminal conspiracy to commit arson in the first degree, assault of a child in the second degree, kidnapping in the second degree, leading organized crime, or malicious placement of an explosive in the first degree….” “Serious violent offenses” is a subcategory of violent offense and means: Murder in the first degree; Homicide by abuse; Murder in the second degree; Manslaughter in the first degree; Assault in the first degree; Kidnapping in the first degree; Rape in the... View Article