AlphaStaff Webinar Importance of Drug and Background Screening

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2013 Webinar Series:

Importance of Drug & Background Screening

April 18, 2013

Presented by:

Richard Seldon President

Simplifying business. Benefiting people.

AlphaStaff Welcomes Our Premier Partner

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Richard

Seldon

The Importance of Background Checks & Drug Screening

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According to the Workplace Violence Research Institute, negligent hiring costs U.S. businesses in excess of $18 billion annually

Workplace violence is the foremost concern of corporate security directors at Fortune 1000 companies

About 8% of the job applicants that Sterling screens have a criminal record

About 9% of job applicants falsely claim they have a college degree, list false employers, or identify jobs that don't exist

The Wall Street Journal reports that approximately one third of all job applications contain lies regarding experience, education, and the ability to perform essential functions of the job.

Industry Facts


Confirm that the applicant is accurately representing him / herself

Higher quality applicant pool

Ensure that the person is really qualified for and can perform the job

Lower turnover and recruiting costs

Ensure the person does not pose a threat of harm to co-workers and the public

Reduce theft and embezzlement

Reduce workplace violence and the resulting liability

Reduce legal exposure for negligent hiring and retention

If Background Checking Is Not Required By Law, Why Do It?


Negligent hiring: the failure to properly screen employees, resulting in the hiring of someone that has a history of violent or criminal acts.

Negligent retention: retaining an employee after the employer became aware of the employee's unsuitability, thereby failing to act on that knowledge

1. A taxicab company was held liable for negligence in hiring a criminally violent driver who raped and robbed a woman in the presence of her two young children.

2. A nursing home was found liable for $235K for the negligent hiring of an unlicensed nurse with numerous prior criminal convictions who assaulted an 80 year old visitor.

3. A security company was liable for the negligent hiring, training, supervision, and assignment of a security guard who aided outside confederates in the theft of $200,000 worth of gold certificates.

4. A furniture company was found liable for $2.5 million for negligent hiring and retention of a deliveryman who savagely attacked a woman customer in her home.

Negligent Hiring / Retention


Resume / Cover Letter

Employment Application Form

Interview

Conditional Offer of Employment

Drug Test/Background Check

Background Checking should be narrowly tailored to obtain job-related information with respect to the position at issue.

Employment Application Process


The Society for Human Resource Management states 45% of all resumes contain one major fabrication

A high degree of misinformation involves past employment and the educational background.

Resume / Cover Letter


Review for legal compliance (e.g., question regarding criminal convictions)

Look for Red Flags in the application process and follow-up on them, e. g., gaps in employment

Have good disclaimer language, including language that false or misleading information constitutes grounds for immediate termination.

Require applicant to complete entire form, and sign and date it (don’t just allow applicants to attach their resume or leave sections blank).

Employment Application Form


If you offer a position, make sure it is conditional on the successful completion of a background check.

Conduct a drug test and thorough background check tailored to the particular position.

Conditional Offer of Employment


The job relatedness of the crime

The seriousness of the offense

The date the offense occurred

The person’s age at the time of the offense

Evidence of successful rehabilitation

Factors to Review Before Denying Employment

Criminal Conviction Information


Equal Employment Opportunity Commission (EEOC)

• The United States Equal Employment Opportunity Commission (EEOC) has ruled that discriminating against felons in the workplace has the same effect as discrimination against blacks and Hispanics and is therefore illegal.

• The ruling means that the EEOC has decided that employers cannot have a blanket policy stating they will not hire convicted felons.

• In September 2009, a class action lawsuit was filed against Freeman Companies, as the EEOC claimed that Freeman used credit histories and criminal background checks to unlawfully deprive blacks and Hispanic job applicants equal employment opportunities.

• In 2005, the EEOC issued informal guidance that said that an employer who uses a blanket policy of not hiring any applicant with a history of arrest or conviction violates Title VII of the Civil Rights Act because such a policy “disproportionately excludes members of certain racial and ethnic groups, unless the employer can demonstrate a business need for use of this criteria.”


EEOC and PEPSI

• Pepsi Co. agreed to pay a $3.1 Million fine to the Equal Employment Opportunity Commission (EEOC) after it was charged with using criminal background checks to discriminate against potential job applicants.

• The EEOC’s investigation revealed that more than 300 African Americans were adversely

affected when Pepsi applied a criminal background check policy that disproportionately excluded black applicants from permanent employment. Under Pepsi’s former policy, job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense.

• “Pepsi’s former policy also denied employment to applicants from employment who had been

arrested or convicted of certain minor offenses. The use of arrest and conviction records to deny employment can be illegal under Title VII of the Civil Rights Act of 1964, when it is not relevant for the job, because it can limit the employment opportunities of applicants or workers based on their race or ethnicity.”

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Number and List of Accounts

Number of Accounts with Negative Information

Number and List of Accounts that have Placed the Applicant’s Account for Collection

Public Records, such as civil judgments

Total Outstanding Balances

Be Careful Regarding Job-Related Determination

Do Not Use Bankruptcies

The type of information to consider:

Consumer Credit Reports


Current Status of License

History of Speeding, Reckless Driving, Careless Driving, DUI, DWI,

etc.

All Suspensions and Revocations

Department of Motor Vehicle Reports

The type of information to consider:


Employment Verification

Dates of Employment

Position

Additional Questions:

Was the employee honest?

Was the employee excessively late or absent?

Is the employee eligible for rehire?

How was the employees overall performance?

Was proper notice given?


Education Verification

Verification of the applicant’s educational history

We recommend verifying the highest degree attained

Diploma mills – unaccredited institutions that grant illegitimate degrees for a fee


Sexual Offender Search

Offers an additional measure of protection beyond a criminal conviction search as the offender’s state or county records may be sealed, records may reside in family court, or the original sexual offense may have been reduced to a lesser charge

State Registries

Office of Foreign Asset Control (OFAC)

This search identifies individuals and companies, owned, controlled by, or acting on behalf of countries targeted by US foreign policy as terrorists and narcotics traffickers through information provided by the US Treasury’s Office of Foreign Asset Control (OFAC). These Specially Designated Nationals (SDN) have had their assets blocked, and US citizens are generally prohibited from dealing with them.

The OFAC search contains information from the below sources: Bank of England Sanctions List, Canada OSFI List of Entities/Individuals CIA Chiefs of State and Cabinet Members of Foreign Governments EU Consolidated List of Persons, Groups and Entities, Interpol, FBI Most Wanted Terrorist, OFAC Palestinian Legislative Council List World Bank Debarred Parties And Others


Applicant’s Name

Jurisdiction

Docket Number

Indictment Number

Arrest Date

Reason for Arrest

Disposition Date

Disposition

Sentence

Criminal Conviction History Search


Social Security Trace / Address History

Criminal Conviction History Search – Federal, State, County

Consumer Credit Reports

Motor Vehicle Reports

Employment Verification

Education Verification

Sexual Offender Search

Office of Foreign Asset Control (OFAC)

ArrestDirect

Background Checking Options


Criminal Conviction Searches

• At this time, about 30% of Americans have been arrested by age 23 at least once for something other than a traffic violation.

• In 1965, about 22% of Americans had been apprehended at least once by age 23

• By age 18, about 16% to 27% of teens have been arrested at least once

* Source: Journal of Pediatrics

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International Background Checks

• Every country around the globe has laws and rules that regulate drug testing and background checks

• Drug testing and background checks are becoming more acceptable around the world

• However, the services available are still more limited than in the United States

• The cost is much greater to do drug tests and background checks

• The turnaround time to complete the work is much slower than in the United States

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The Fair Credit Reporting Act (FCRA) directly affects an employer’s ability to obtain background information on applicants and current employees through contracts with third-party Consumer Reporting Agencies (CRA)

Organizations such as Sterling that conduct background checks are Consumer Reporting Agencies

The FCRA regulates the circumstances under which employers can use CRAs to obtain background information and to rely on that information to make employment decisions

If you use an outside vendor, you must comply with the Fair Credit Reporting Act

FCRA and Compliance Procedures Required By FCRA For Users Of Reports

Consent And Disclosure Pre-Adverse Action Adverse Action

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All State Consent and Disclosure


In the Pre-Adverse Action Notice, the employer must reveal the disqualifying information received from the Consumer Reporting Agency.

Include with this notice a copy of the report and notice of rights as required by Fair Credit Reporting Act.

Give a short but reasonable period of time to provide information that would explain the discrepancy, omission or misrepresentation.

If the employee is unable to do so, take adverse action.

Pre and Post Adverse Action


Some states have fair credit reporting laws that have more stringent requirements than the FCRA (e.g., California).

States have other laws that also limit the use of information you can obtain and how to use it once it is obtained (e.g., New York, criminal convictions and arrest records)

State Laws Create Additional Compliance Issues

More than three-quarters (76.4%) of all illicit drug users 18 and

older are employed full or part time… that's approximately 16% of the working population (full- and part-time workers combined).

The federal government reported that drug abusing employees, when compared to non-using workers, are:

1. More likely to change jobs frequently

2. More likely to be absent from work

3. More likely to be involved in a workplace accident

Drug Testing


Why Enforce a Drug Free Workplace?

About 3% of the drug tests that Sterling administers for their clients are positive

1 out of 12 US households surveyed admit to using illegal drugs in the past 30 days

20.2 million Americans over the age of 18 use illicit drugs

Prescription drugs are abused by 7.0 million Americans

Marijuana is abused by 17.4 million Americans

Cocaine is abused by 1.5 million Americans

Drug testing is a deterrent – fewer drug users apply at companies with a drug testing program


Cannabinoids (THC)

Cocaine

Amphetamines

Opiates

Phencyclidine (PCP)

Barbiturates

Benzodiazepines

Methadone

Propoxyphene

Most Drug Tests Screen for the Following Drugs:

Pre-Employment Substance Abuse Testing


Conclusion

Questions?

Thoughts?

Napping?

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Contact Us ! • .

Copies of the presentation [email protected] 888-335-9545 (Option 8)

mailto:[email protected]

Upcoming AlphaStaff Webinars

Please mark your calendars !!!

Date: Thursday, May 16, 2013 Topic: Worker's Comp. Claims Reporting

Date: Thursday, May 30, 2013

Topic: Recent NLRB Rulings and Their Impact on Non-Union Employers

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Thank you for your time!

Questions?

AlphaStaff Webinar Importance of Drug and Background Screening

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Transcript of AlphaStaff Webinar Importance of Drug and Background Screening