Their Past is Your Future. With easyBackgrounds You See Both. Background Checks Navigating the Legal Minefield Seacoast Human Resources Association Meeting March 8, 2016

Agenda Overview Review of compliance and business risks Risk analysis and management What to expect with background screening - 2 -

Overview What is the purpose of background screening? Business environment Regulatory environment - 3 -

Risks to Manage Business risks Staff vs. staff Staff vs. business Customers Compliance risks Fair Credit Reporting Act (FCRA) Consumer Financial Protection Bureau (CFPB) Equal Employment Opportunity Commission (EEOC) International, e.g., European Union - 4 -

Business Risks Staff vs. staff – internal risks to own people Staff vs. business – internal risks to business Customers - 5 -

Regulatory Risks - FCRA Permissible purpose 16 different purposes allowed Typically, employment-related Disclosure to inform candidate That a consumer report and investigative consumer report may be obtained Summary of rights Must be in writing and contain only the disclosure No waivers of claims or liabilities - 6 -

Regulatory Risks - FCRA Authorization – in writing, signed by candidate Prior to initiating screening Your responsibility Highly recommend providing copy to screener Protection of Personally Identifiable Information What is it? Information and Data Security Plan - 7 -

Regulatory Risks - FCRA Adverse Action Prior notice of intent with period to respond Right to free copy of report Right to dispute Summary of FCRA Rights - 8 -

Regulatory Risks - FCRA Record retention – 5 years Required – report Recommended Disclosure Authorization Pre-Adverse/Adverse Action notifications - 9 -

Regulatory Risks - EEOC Fair and consistent employment practices In practice Clearly articulate rationale for screening criteria Tie decision criteria to job responsibilities Make individual determinations Consistently apply decision criteria

Regulatory Risks - States States have own programs Some federal preemption post-2003 Higher level of restrictions More specific notice requirements Shorter reporting period limitations Limited communications options

Regulatory Risks - States In practice, apply most restrictive requirements Federal State where candidate lives State where candidate will work

Regulatory Risks - Local Large municipalities, e.g., New York City, San Francisco, Philadelphia “Ban the box” – self-reporting of criminal history Credit reporting

Regulatory Risks - International More an issue for screening companies Steadily increasing data privacy restrictions More specific disclosure and authorization requirements European Union in forefront Recent European Court decision increased restrictions Effectively eliminated EU-US agreements

Risk Management Vet and hire a good screening partner Analyze your business risks Develop a clear, rational program Consistently do it!

Vet Your Partner Consultation and support Education Dispute Resolution Procedure and Log Template Full File Disclosure Procedure

Vet Your Partner 613(A)(1) Procedure (adverse public record notice) Information and Data Security Plan with testing Sample Research Procedures Provider Auditing Program

Analyze Your Business Risks Staff vs. staff – for example Sex offenders Assault convictions Substance abuse Staff vs. business – for example Fraud convictions for accounting roles Verifications for professionals Drugs for healthcare staff Bankruptcy for regulatory staff

Hiring Program Identify business risks Select screening targets based upon risks Identify hiring criteria based upon business roles Onboarding process – disclosure/authorization Individual case review process Write it all down! Apply it consistently

What to Expect Requests for authorization copies Requests for additional or confirmatory information More time to complete than you might expect (or would like) Less status information than you might like

Turnaround Time Average vs. actual Speed vs. protection of consumer interest – have to be right Many factors can affect TAT that don’t mean bad news

Turnaround Time Criminal searches – 3,500+ jurisdictions Differing storage practices Some require clerk intervention Some impose daily limits on numbers Some redact PII on public terminals Obscure legal language Repository searches Often notarized authorizations required Direct clerk involvement Backlogs

Turnaround Time Drug Screening – three layers of activity Collection Testing Medical Records Officer (MRO) review Drug Screening – Collection factors Candidate delay in getting to the collection site Paperwork lost by the candidate or the lab Failure by the candidate to bring a photo ID Collection late in the day or at the end of the week

Turnaround Time Drug Screening – Testing factors Samples analyzed in batches Strict quality control requirements apply to each sample QC can require recalibration of equipment, re-analysis of spikes, etc. Drug Screening – MRO factors Review and interpretation of results Obtaining additional information from candidate

Turnaround Time Verifications Verbal vs. automated Missing, incomplete, or electronically signed release forms Inaccurately identifying actual employer Incomplete or inaccurate identification of educational institution and location Failing to provide name used while in school or employed Incomplete or inaccurate (HR) contact information

What Can You Know and When Can You Know It? Criminal searches Very sensitive – price of an error is very high FCRA very strict about maximum possible accuracy Premature indicator of records = non-compliant report Drug screening Similar to criminal searches + HIPPA Verifications Much less sensitive = updates can be more transparent

How You Can Help Yourself Give yourself extra lead time Upload candidate authorizations to the search Require maiden and middle names and suffixes to names Identify employment location (state)

How You Can Help Yourself Respond quickly to requests for additional information Set expectations with candidates regarding responsiveness Ensure candidates provide accurate employer and school contact info

Summary Select an experienced screening partner Thoughtfully identify your risks Develop and implement a rational management program Consistently apply your program

Questions? John Gilbert Chief Operating Officer easyBackgrounds, Inc. Tel