Credit Reports for Employment Search

Cities and states are passing laws to limit the use of credit reports as a basis for employment. Proponents claim the use of information such as credit has been shown to be discriminatory during hiring decisions. As of January 2018. California, Colorado, Connecticut, Delaware, D.C, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington have passed laws limiting the use of employment credit checks. Although the Minneapolis Federal Reserve Bank published a paper stating that these employer credit check bans may have unintended consequences including "removing incentive for workers to repay their debts", the push for more fair chance laws is escalating across the country. For up to date information on the credit check laws, please read the EEOC publication and follow this link to view their considerations for best practices.

If applicants will be making financial decisions, handling money, or will have access to financial information, they may be subject to credit background checks as it applies to their jobs. The Fair Credit Reporting Act dictates that employers must inform applicants if they will be running a credit report prior to employment and if it will influence the hiring decision.

The information provided in this article is for general informational and educational purposes only, and is not a substitute for legal advice. Accordingly, before taking any actions based upon such information, we encourage you to consult with the appropriate legal professionals or licensed attorneys.


E-Verify Requirements

Congress has proposed The Legal Workforce Act of 2017 to require mandatory E-Verify use by every employer in the U.S. While many states have their own E-Verify laws, the new bill would preempt state laws and penalize any employer who knowingly hires undocumented workers. Employers also have a certain number of months to comply with the bill, if it passes, depending on the number of employees. Congressional Democrats are pushing back on the mandatory use of E-Verify in favor of a bill to protect to DACA recipients.

US Citizenship and Immigration Services already encourages employers to use E-Verify for all of its new hires as part of the executive order "Buy American, Hire American" signed in April of 2017.

The information provided in this article is for general informational and educational purposes only, and is not a substitute for legal advice. Accordingly, before taking any actions based upon such information, we encourage you to consult with the appropriate legal professionals or licensed attorneys.


Salary Exemptions

California and other states and cities have also restricted employers and HR professionals from inquiring about an applicant's salary history. In Delaware, Massachusetts, New Orleans, New York City, Oregon, Philadelphia, Pittsburgh, and Puerto Rico, public, private, or all employers are prohibited from asking about salary history or will be prohibited when the laws go into effect in 2018. Because of a push to end the wage gap or discrimination, this trend is likely to continue throughout 2018.


Ban The Box

“Ban the Box” laws require hiring managers to put off asking about a candidate’s criminal history until after an interview has been conducted or a provisional job offer has been extended. To date, over 150 cities in 30 states have adopted “Ban the Box” legislation. California's new law went into effect in January 2018. According to the publication Courthouse Concepts, this trend will continue for years to come.

According to a study conducted by the National Employment Law Project in August 2016, roughly 70 million people in the United States have some sort of a criminal record. Nearly 700,000 people return to our communities from incarceration every year. Numerous research studies find that people require a combination of family support, community assistance, and economic opportunity to stay out of the criminal justice system. Having access to employment opportunities is a critical component of this web of support. A steady job provides both financial resources and connections to society.

Unfortunately, finding a job is difficult for many people with records. Men with criminal records accounted for about 34 percent of the unemployed prime working age men surveyed in a 2015 New York Times/CBS News/Kaiser Family Foundation poll. Moreover, the Great Recession made it even worse; for example, in one state, researchers found that before the Recession 40 percent of the formerly incarcerated were employed; but in 2008 the proportion had dropped to 10 percent. While having a job—especially a low-wage job—is not a guarantee that a formerly incarcerated person will remain out of the criminal justice system. Unemployment strains critical family supports and provides financial incentives to engage in illegal behaviors. Thus, removing a barrier that cuts off employment opportunities before the hiring process even begins is critical to helping millions of Americans with records.

The information provided in this article is for general informational and educational purposes only, and is not a substitute for legal advice. Accordingly, before taking any actions based upon such information, we encourage you to consult with the appropriate legal professionals or licensed attorneys.


Immigration Petitions

Employers will no longer be able to ask outside counsel to sign immigration applications and petitions on behalf of the company, according to a new policy that takes effect March 17.

According to the February 21, 2018 issue of a SHRM (Society for Human Resource Management) newsletter, the U.S. Citizenship and Immigration Services (USCIS) says that it will no longer accept power of attorney signatures. Forms filed by outside counsel or other immigration preparers must be signed by an authorized employee of the petitioning organization.

“This means a lot more busywork for employers,” said Justin Storch, manager of agency liaison at the Council for Global Immigration, an affiliate of the Society for Human Resource Management. “It’s become a common practice among large employers to use power of attorney. Above a certain number of filings, it just makes sense to use it if it’s available.”

As a result of the policy change, employers and their immigration preparers will have to build in more time for documents to be signed by an authorized employee and returned to outside counsel for filing. “Depending on who is authorized within the organization to sign petitions, you may have one person signing over a thousand of them,” Storch said. “It also creates logistical problems because if you’re working with attorneys, you have to send documents back and forth through the mail and work with their deadlines, all while the five-day H-1B cap window is looming.”

The new guidance supersedes a 2016 policy that permitted employers to authorize their outside immigration counsel or other outside representatives to sign petitions and applications under a power of attorney. The agency said it reversed the policy because power of attorney signatures resulted in inconsistent treatment of petitions and made prosecuting immigration fraud more difficult.

A valid signature does not need to be in cursive, in English or legible and may be abbreviated if that is how the individual normally signs his or her name. USCIS will not accept signatures created by a typewriter, word processor, stamp, auto-pen or similar device and may reject a form submitted with an improper signature instead of offering the opportunity to fix it.

The agency said it will address requirements for electronic signatures in future guidance.

The information provided in this article is for general informational and educational purposes only, and is not a substitute for legal advice. Accordingly, before taking any actions based upon such information, we encourage you to consult with the appropriate legal professionals or licensed attorneys.


Background Checks and The FCRA

By Tim J. St. George and David M. Gettings, attorneys at Troutman Sanders LLP

The Fair Credit Reporting Act regulates more than credit; including provisions that govern employers who obtain consumer reports on applicants in connection with the application process. One such provision requires an employer to provide the applicant with a clear and conspicuous disclosure, consisting solely of the disclosure, that a background check will be obtained.

In recent years, many employers have ignored this provision of the law. In one case, Walter Reed alleged that he interviewed for a trucking position but was not informed that a background check would be procured on him. In response, CRST, his potential employer, filed a motion to dismiss, to which it attached Reed’s employment application and the disclosure that he signed. The document included information about the content of the consumer report, Reed’s right to request a copy of the report, Reed’s right to dispute the report, and the companies potentially generating the report. It also included a statement that CRST would provide additional notices.

In analyzing Reed’s claim, the court held that CRST’s disclosure was “clear and conspicuous” and consisted “solely of the disclosure. The court implicitly concluded that the existence of the information discussed above did not render the disclosure not “standalone.” In other words, the court found that a background check disclosure could inform the consumer of information that is germane to the obtainment and use of the consumer report, while still complying with the “solely of the disclosure requirement.”

The court’s decision in Reed is significant because it applies a commonsense approach to the FCRA’s background check disclosure requirement. While some courts have applied highly technical approaches to what constitutes a “standalone” disclosure, the Reed court implicitly held that a disclosure that informs a consumer that a background check will be obtained, while also including relevant information pertaining to that background check, does not violate the FCRA.

The FCRA poses many traps for unwary employers. In its well-reasoned approach to what constitutes a “standalone” disclosure, the court in Reed prevented the creation of another such trap.

For more information on the Obligations of Users Under the FCRA, see our Resource section to download.

The information provided in this article is for general informational and educational purposes only, and is not a substitute for legal advice. Accordingly, before taking any actions based upon such information, we encourage you to consult with the appropriate legal professionals or licensed attorneys.


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