December 19, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Updates to Disclosures for California APplicants Requried
A reminder that California law (
SB 909) requires employers to include the website address of the background screening company in their disclosure to consumers. This bill updates CA Civil code Section 1786.16 and 1786.20, and is effective January 1,2011. Please make sure your Disclosure form (or your Authorization and Disclosure form if you combine them) is updated to include the Orange Tree. A sample Authorization and Disclosure is available upon request from the
Orange Tree Customer Care team.
Also a reminder to California Employers – Effective January 1, 2012 California will restrict the use of credit reports in the employment decisions (see the October 14 post below for additional information). For those employers that will still use credit reports for positions that are allowed, don’t forget that disclosure regarding the specific basis for use of a credit report is now required. Employers may incorporate that information into their Authorization and Disclosure form or produce a separate disclosure for this topic.
December 16, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
EEOC Issues “Informal Guidance” regarding High School Diploma as a Job Qualification
We’ve been hearing lately about the Equal Employment Opportunity Commission’s scrutiny of the use of credit history and criminal records in the employment consideration process. In an interesting shift the Office of Legal Counsel recently issued guidance regarding the use of a high school diploma in the employment decision. The guidance was issued in responding to a question involving individuals with learning disabilities who are unable to earn high school diplomas, and thus unable to a obtain a job where a high school diploma is required. Here’s an excerpt from the letter:
Under the ADA, a qualification standard, test, or other selection criterion, such as a high school diploma requirement, that screens out an individual or a class of individuals on the basis of a disability must be job related for the position in question and consistent with business necessity. A qualification standard is job related and consistent with business necessity if it accurately measures the ability to perform the job’s essential functions (i.e. its fundamental duties). Even where a challenged qualification standard, test, or other selection criterion is job related and consistent with business necessity, if it screens out an individual on the basis of disability, an employer must also demonstrate that the standard or criterion cannot be met, and the job cannot be performed, with a reasonable accommodation. See 42 U.S.C. § 12112(b)(6); 29 C.F.R. §§ 1630.10, 1630.15(b) and (c); 29 C.F.R. pt. 1630, app §§ 1630.10, 1630.15(b) and (c).
Thus, if an employer adopts a high school diploma requirement for a job, and that requirement “screens out” an individual who is unable to graduate because of a learning disability that meets the ADA’s definition of “disability,” the employer may not apply the standard unless it can demonstrate that the diploma requirement is job related and consistent with business necessity. The employer will not be able to make this showing, for example, if the functions in question can easily be performed by someone who does not have a diploma.
Employers should now be prepared to defend their education requirements as job and position related and to consider the ADA and EEOC implications of a policy that excludes those individuals who do not have a high school diploma, or are unable to obtain a high school degree due to a learning disability.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
November 23, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Employers: Have you considered EEOC Guidelines Lately?
The EEOC has lately been holding public meetings, publishing press releases and making speeches all related to the topic of employer’s use of criminal and credit information for employment purposes. The EEOC’s long standing concern over their use is well documented in their guidance documents on the topic (http://www.eeoc.gov/policy/docs/race-color.html and http://www.eeoc.gov/policy/docs/arrest_records.html) and stems from evidence that shows that minorities are disproportionately arrested for and convicted of crimes and that minorities and women are more likely to have negative information in their credit histories than others. More recently, the EEOC’ launched their E-RASE initiative (Eradicating Racism & Colorism from Employment), which they state “…is designed to improve EEOC’s efforts to ensure workplaces are free from race and color discrimination. Specifically, the EEOC will identify issues, criteria and barriers that contribute to race and color discrimination, explore strategies to improve the administrative processing and the litigation of race and color discrimination claims, and enhance public awareness of race and color discrimination in employment.”
With all of this recent attention, it seems like a good time to remind employers and HR professionals of the guidance that currently is in place from the EEOC. The EEOC has cautioned that employers should avoid blanket exclusions that prohibit employment of individuals with criminal records or who have particular types of criminal convictions. Instead, the EEOC's guidance suggests that employers should examine individual applicants on a case-by-case basis. As such, employers should request and utilize only information concerning applicants that is relevant to the job the applicant would be doing and should consider the specific circumstances of each applicant. The EEOC states that to avoid violating Title VII of the Civil Rights Act of 1964 and current EEOC guidelines, employers should not rely on outdated arrest information and that employers should consider the following before disqualifying an applicant who has one or more criminal convictions:
1. the nature and gravity of the offense or offenses;
2. the time that has passed since the conviction; and
3. the nature of the job held or sought.
The EEOC has also recently been scrutinizing employers use of applicant credit history information. According to the EEOC, employers generally should avoid using credit history as a means to screen applicants, given the potential disparate impact on minorities and women. We have noticed that the EEOC's concerns over use of credit histories has increased over the past several years, in part it appears, due to the economic downturn marked by high unemployment.
The EEOC's guidance regarding the use of credit information does provide for certain exceptions, for instance, where an applicant's credit information may be closely related to the qualifications for and the duties of a particular job, such as a position with significant financial responsibilities. Again, similar to the analysis of criminal conviction information, employers utilizing credit histories to screen applicants should examine such information on a case-by-case basis and should be able to demonstrate that an applicant's credit history bears a relationship to the duties of the job. Additionally, it is important to note (see previous posts on this topic) that several states now have laws expressly limiting the use of credit history information for employment purposes, and numerous bills have been introduced at both the federal and state level to limit employers from utilizing such information.
Although we have historically focused our educational efforts on employers compliance with the federal Fair Credit Reporting act, it is apparent that employers that have not given it recent consideration should also be taking steps to ensure that their policies and procedures are in compliance with EEOC guidelines and other applicable federal and state laws.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
October 14, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
California Restricts Use of Credit Information for Employment
This week California joins a number of other states that have enacted legislation restricting and employers use of credit information, including Washington, Oregon, Hawaii, Illinois, Maryland and Connecticut. On October 10, 2011, California Governor Brown signed into law Assembly Bill 22, legislation that adds a new provision to the California Labor Code and amends the state's Consumer Credit Reporting Agencies Act to restrict the way that employers may use "consumer credit reports" for hiring and personnel decisions. The new laws, which take effect on January 1, 2012, limit when employers can use consumer credit reports and impose notice and disclosure obligations on employers who intend to do so. Employers are limited to obtaining and using credit report information in the employment decision except if it is for one of the following positions:
- A managerial position;
- A position in the state Department of Justice;
- A sworn peace officer or other law enforcement;
- A position for which the information contained in the report is required by law to be disclosed or obtained;
- A position that involves regular access to confidential information such as credit card account information, Social security number, or Date of birth;
- A position which the person can enter into financial transactions on behalf of the company;
- A position that involves access to confidential or proprietary information; or
- A position that involves regular access to cash totaling ten thousand dollars ($10,000) or more of the employer, a customer, or client, during the workday.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
October 14, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
California State E-Verify Legislations limits reach of Municipal Laws
On October 9, California Governor Jerry Brown signed Assembly Bill 1236 into law. The bill prohibits county and municipal governments in the state from requiring private businesses to use the federal government's E-Verify system and effectively invalidates laws passed in several municipalities regarding the use of E-Verify by private employers, including those with government contracts. The bill, however, leaves intact laws regarding E-Verify use for public employees that have been passed by local governments.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
August 22, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
E-Verify Required in Minnesota (Again) for some State Government Contractors
Minnesota recently rejoined states with current E-Verify legislation when it passed the state’s final budget bill, approved earlier this month. Former Republican Gov. Tim Pawlenty first mandated E-Verify for large government contractors through an executive order in 2008. At that time, he also ordered the state to run its own new hires through E-Verify. Gov. Mark Dayton, a Democrat, let the requirements lapse last April. The new law, which is effective immediately, applies only to companies providing more than $50,000 worth of services to the state. These companies must participate in E-Verify and check the work eligibility of their newly hired employees. This mandate does not extend to state employees.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
August 1, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Connecticut Enacts Credit Restriction
Earlier this month the state of Connecticut became the 6th in the nation to enact legislation that places prohibitions on an employer’s use of credit in an employment decision. The legislation, signed into law on July 13, 2011 by Governor Malloy, generally prohibits employers from using credit scores in make employment decisions and prohibits many employers from requiring employees or prospective employees to consent to a request for a credit report as a condition of employment. The effective date of the Act is October 1, 2011.
The Act applies to all employers with at least one employee, however many financial institutions as well as employers who are required by federal law to inquire into an applicant or employee’s credit history are excluded from the Act’s prohibitions. In addition, the Act provides limited exceptions that would allow an employer to request or use credit information in an employment decision where an applicant or employee’s credit information is “substantially related to the employee’s current or potential job” – for instance in a position involving handling money, in a position that involves the direct control of the business, in a position with access to financial information, in positions with fiduciary duties to the employer, in positions where the employer would have an expense account or corporate credit card, in positions where the employee would have access to employer assets above a certain monitory value, and in positions that have access to confidential or proprietary business information. In the case where an employer does request a credit report for an applicant or employee under one of the exceptions allowed by the Act, the employer must disclose its intent to do so in writing to the applicant or employee.
Connecticut joins Hawaii, Illinois, Maryland (also effective October 1, 2011), Oregon and Washington as states that currently have prohibitions on the use of credit information in the employment decision.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
July 5, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
July 21st effective date for the Dodd-Frank Wall Street Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act is a recent amendment to the Fair Credit Reporting Act. One of the provisions of this amendment goes into effect on July 21, 2011 and it requires additional disclosures to the consumer if a negative decisions is made based on a credit score. However, when a credit report (or summary) is requested for an “Employment Purpose” the credit report that is generated does not include a credit score – thus this provision does not apply to Orange Tree client employers.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
June 26, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Alabama Employers Required to Use E-Verify
On June 9, 2011 Alabama Governor Robert Bentley signed into law the Alabama Taxpayer and Citizen Protection Act (SB 256). The law requires all employers (both public and private) to begin using E-Verify no later than April 1, 2012. The effective date is for all employers, there is no phased implementation as other state have enacted. Similar to the Arizona law (enacted in 2008 and recently upheld by the US Supreme Court – more information available here), employers who violate the law are subject to suspended or revoked business licensing or loss of employee expensing for state income tax purposes if they are found to be in violation of this new law.
The full text of the law can be found here.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
June 26, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Tennessee Legislation Requires E-Verify for Many Employers
On June 7, 2011 Tennessee Governor Bill Haslam signed the Tennessee Lawful Employment Act (House Bill 1378) into law. The law requires all government entities and many private employers to demonstrate that they are hiring and maintaining a legal work force. Employers may choose to use E-Verify for this purpose or the law also allows the employer to request one of a number of “authorized documents” from newly hired employees. The law calls for a phased implementation with all government entities and private employers with 500 or more employees to enroll and participate no later than January 1, 2012, private employers with 200-499 employers to enroll and participate no later than July 1, 2012 and private employers with 6-199 employees to enroll and participate no later than July 1, 2013. Private employers with five or fewer employees are not required to participate.
In addition, the law requires employers to collect an “authorized document” for “non-employees” (defined in the law as “any individual other than an employee, paid directly by the employer in exchange for the individuals labor or services”). Employers are required to maintain records of:
1. the results of E-Verify for three years after the date the hire, or one year from the date of termination, whichever is later; and
2. records of any “authorized documents” collected for this purpose for one year after the employee or non-employee is no longer employed (or stops proving services or labor to the employer).
The law does provide for Tennessee Department of Labor Services to request documentation of the employers compliance with this law and for fines and/or suspension of a business license for employers that are found in violation.
The full text of the law can be found here.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
June 26, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Indiana Legislation Requires E-Verify for State and Local Government Agencies
On May 10, 2011 Indiana Governor Mitch Daniel signed the Compromise Illegal Immigration Reform Bill (SEA 590) into law. The law goes into effect on July 1, 2011 and requires all state agencies and local governments units to the E-Verify to verify the work eligibility status of all newly hired employees. Although private employers are not subject to the E-Verify provisions of this law, employers who contract with Indiana state or local government entities should consult their legal counsel regarding additional obligations and prohibitions under the law, especially:
• The law prohibits a business who knowingly hires an illegal immigrant from deducting expenses associated with that employee in the calculation of their state income taxes.
• The law bans state agencies and local governments from entering into or renewing a public contract unless the contractor verifies they do not employ illegal immigrants.
• The law prohibits state agencies and local governments from awarding a grant of more than $1,000 to a business unless they sign and show documentation that the business is enrolled and participating in the E-Verify program.
• The law grants state agencies or local government authority to terminate a public contract without penalty if the contractor knowingly employs illegal immigrants.
The full text of the law can be found here.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
May 17, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Georgia Legislation Requires E-Verify
On Friday May 13th, Georgia Governor Nathan Deal signed into law a bill to mandate E-Verify participation for private companies. This law widely expands the state’s E-Verify requirements to include private employers (it had previously only applied to state contractors and sub contractors). The new law allows for a phased implementation: private employers with 500 or more employers must begin participating in E-Verify as of January 1, 2012. Private employers with more than 100 employees and fewer than 500 employees must begin participating in E-Verify on or before July 1, 2012. Private employers with more than 11 and fewer than 100 employees are required to begin participating no later than July 1, 2013. Private employers with fewer than 10 employees are not required to participate.
Employers will be required to provide evidence that they are enrolled the E-Verify program (or exempt from the requirement in the form of an affidavit that will be provided by the Attorney General) by no later than January 1, 2012. The law allows for suspension or denial of a business license, occupational tax certificate or other document required to operate a business in the state for employers that do not comply.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
April 26, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
The City of Philadelphia Enacts “Ban the Box” Legislation
On April 13, 2011, Mayor Michael Nutter of Philadelphia, Pennsylvania signed PA Bill 110111-A, the Fair Criminal Record Screening Standards Act, which prohibits employers from including criminal record history questions on an employment application and from making employment decision based on records of arrest that did not result in a conviction. Joining a growing list of cities and states imposing restrictions on employer inquiries into criminal record history, the ordinance restricts employer inquiries into the criminal history of the applicant until after the application is accepted and the first in-person or telephone interview is completed. It also bars employers from taking into consideration criminal history information that is not pending or did not result in a conviction. This ordinance will go into effect on July 12, 2011. Click
here for a full review of this ordinance and other pending state legislation and city ordinances as well as steps employers should consider taking to respond to these changes.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
April 26, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Maryland Restricts Use of Credit Reports in the Employment Decision
Joining Illinois, Washington, Oregon and Hawaii – Maryland recently enacted legislation that places restrictions on employers that use Credit Reports in the employment decision. Effective October 1, 2011 the legislation bars employers from using credit reports in the employment decision, with some exceptions. The exceptions allowed are for those positions where there is a “bona fide purpose that is substantially job related.” This exception generally applies to positions involving money-handling and other confidential job duties. Click here for a full review of this legislation and steps employers should consider to respond to this change.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
March 4, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
Colorado Credit Legislation Stalled
A House Committee of the State of Colorado legislature has voted down legislation that would have prohibited employers from utilizing consumer credit information for any type of general employment purpose including hiring, promotion, reassignment or retention. As proposed, the bill specified that employers could not use consumer credit reports unless the credit information was substantially "job-related," and the employee would have access to money, other assets, trade secrets or other confidential information; or the position sought fell into a few specific categories. According to the State of Colorado Legislature website, the House Committee has suspended HB1127 "indefinitely" as of February 17, 2011.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
January 11, 2011
Written by Heidi Seaton, Director of Implementation and Compliance
The Use of Credit Information in the Employment Decision
Late last month the Equal Employment Opportunity Commission announced a lawsuit against a nationwide provider of post-secondary education, charging that the company has engaged in a pattern and practice of unlawful discrimination because they consider credit information in their employment decision. This came on the heels of an attempt at federal legislation last year in the U.S. House of Representatives, and there are now four states that have passed legislation at the state level. Given all of the recent attention, employers who use credit history as part of their background screening and hiring process should take steps to assure they have considered the existing guidance from the EEOC regarding use of credit information in the screening process and reviewed the specifics of the state laws. Read the full Orange Tree White Paper: The Use of Credit Information in the Employment Decision for a full review of the recent litigation, legislation, the state specific requirements and a set of steps that employers can take to help bring them into compliance with EEO guidance and state law.
The foregoing is not legal advice, either expressed or implied and is provided for educational purposes only. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
November 18, 2010
Written by Heidi Seaton, Director of Implementation and Compliance
MCAD Issues Fact Sheet Regarding Criminal History Inquires on Employment Applications
On August 6, 2010, Governor Patrick of Massachusetts signed into law legislation overhauling the Commonwealth’s Criminal Offender Record Information (CORI) law. One provision of the new law, which took effect on November 4, 2010, makes it unlawful for employers to request criminal history information on an “initial written application.” The Massachusetts Commission Against Discrimination (MCAD), which is charged with enforcement of this provision, recently issued a “Fact Sheet” intended to provide guidance regarding the application of these new restrictions. The Fact Sheet is available here. Among other things, the Fact Sheet provides the MCAD’s view as to when in the hiring process an employer may request criminal history information, how multi-state employers can comply with the law, and the scope of the new law’s coverage. The new CORI law makes it unlawful for an employer to request criminal history information on an “initial written application form.” In the Fact Sheet, the MCAD interprets this restriction to prohibit employers from requesting criminal history information on any written application or form “prior to an interview.” This interpretation seems to lack a clear basis in the statute, which includes no mention of interviews. The MCAD’s view also appears to be in tension with language in the statute that limits the new law’s restrictions to inquiries made on an initial written application. Prior to the MCAD’s issuance of the Fact Sheet, many attorneys and human resources professionals interpreted the statute and its reference to an “initial written application form” to permit employers to ask candidates about their criminal history in a written form, so long as that inquiry did not occur at the outset of the hiring process. The MCAD, however, has stated that it “will presume that a written application or form requesting criminal background information prior to an interview is part of the ‘initial written application.”
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law. This message (including any attachments) contains confidential information intended for a specific individual and purpose, and is protected by law.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
October 20, 2010
Written by Heidi Seaton, Director of Implementation and Compliance
California recently passed legislation (Senate Bill 909 to amend Sections 1786.16 and 1786.20 of the Civil Code) that requires employers to provide a consumer with the Internet Web site address or telephone number of the investigative consumer reporting agency where the consumer may find additional information about the agency’s privacy practices. This bill would additionally require an investigative consumer reporting agency to conspicuously post on its primary Internet Web site information describing its privacy practices with respect to its preparation and processing of investigative consumer reports, or, if it does not have an Internet Web site, to mail a written copy of the privacy statement to consumers upon request. These changes to CA Civil code will become effective January 1, 2012.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
September 30, 2010
Written by Heidi Seaton, Director of Implementation and Compliance
The USCIS recently announced that E-Verify will expand its photo matching tool to include US passports beginning September 26, 2010. This change will require employers participated in E-Verify directly with the E-Verify interface to compare the photo from a US passport presented during the I-9 process with the government’s digitally stored photo online, if available.
Note, the photo matching process is not yet mandatory (nor available) for employers using E-Verify through a web services interface (most commonly associated with an electronic I-9 system). The Orange Tree I-9 Advantage interface is a web service interface. Web service developers have until December 2010 to add photo matching functionality and other changes from the June 2010 E-Verify redesign.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.
September 27, 2010
Written by Heidi Seaton, Director of Implementation and Compliance
As innovations in technology make it easier to track, collect and process personal information about individuals, companies of all kinds are challenged to manage the way that they use data to both comply with applicable laws and to protect such data from unauthorized access. Orange Tree Employment Screening places the highest priority on protecting both you and your applicants' personal information and maintaining the highest levels of privacy.
Orange Tree Employment Screening takes a least-privileged approach to information security, and only employees who need the information to perform a specific job function are granted access to data. Orange Tree Employment Screening employs strong encryption and strong password protection to prevent unauthorized access. Orange Tree systems are located at an undisclosed location within a state of the art data center with 24X7X365 security. Physical access to systems is protected by two factor biometric access control. Data is stored in a secure manner in accordance with security best practices.
Orange Tree Employment Screening takes very seriously the trust that our clients place in us to maintain strict legal compliance and respect for your candidates' privacy. We will continue to develop standards and practices designed to protect that trust. Interested in additional information? Please view our Privacy Policy.
The foregoing is not legal advice, either expressed or implied. We recommend you seek the advice of your corporate legal counsel for all aspects of employment law.