Screen test

HRM sits down with Art Cohen, Chairman of the National Association of Professional Background Screeners, to take the temperature of this rapidly growing industry.

HRM. What are the main contributors to the huge rise in the use of pre employment screening that has taken place over recent years?
AC. Well, I think there are several main factors. There are many federal and state regulations in the US that mandate background checks. There’s a recently introduced bill that would mandate background checks for long-term care workers. So legislation frequently contributes to the increase in the number of checks that are being done.

Employment background checks are driven by the legal landscape of negligent hiring and negligent retention lawsuits. A possible defense against those types of lawsuits is having performed background checks and exercised due diligence. To a large extent, the notion of the increase in screening could be attributable to the activity of the plaintiff’s bar.

And there are other factors that are not unique to pre-employment screening which are applicable. You want to reduce turnover, you want to reduce the possibility of workplace violence. You want to reduce the possibility of inappropriate conduct in the workplace; employment discrimination, sexual harassment. So I think all of those drivers are responsible for the increase in number of pre employment checks that we see.

HRM. Given the time and cost implications sometimes involved in screening, why does it make it such an attractive option? Does it offer a real return on investment?
AC. You’ve correctly answered your own question. Many, many decisions in the business community today are driven by ROI. If the ROI isn’t there, the expenditure won’t be supported.

Having said that, not everything is about ROI when you deal with issues of employment screening. As I previously mentioned there are employment checks that are driven by regulations, such as the care-worker example I gave you earlier.

In that situation, quite aside from whether there is ROI, the government is making the decision on whether a background check will be required. In that type of case, a public policy decision mandates that the expenditure be made as a matter of law. This mitigates the risk of harm to individuals that might not otherwise be able to protect themselves.

HRM. Do you think a lack of recognized standards and accreditations disadvantage the screening industry? What do you think needs to be done to remedy any shortcomings in this area?
AC. In terms of standards, I think there are in fact are a lot of standards that presently exist. We have both the Federal and many State Fair Credit Reporting Act laws that regulate the employee background screening industry. And there are also a number of other laws, such as Title VII that regulates employment by the Equal Employment Opportunity Commission.

So there are a number of standards. Sometimes federal and state standards are in conflict with one another and we get into issues of what we call federal preemption where federal law can preempt state law. That’s really a whole topic in and of itself. But there are plenty of standards out there that govern our industry.

In terms of accreditation, there currently is neither accreditation of organizations nor any real certification of individuals that are engaged in rendering pre-employment screening services. That is something that NAPBS is actively working on. Our sense is that it is in the best interest of all stakeholders in the process that a fair and productive accreditation process be implemented. And we’re doing that.

HRM. So have you had any success in that area yet? Or is the process still in its infancy?
AC. It’s more than just in its infancy. We have drafted standards and we have circulated those draft standards to various government stakeholders, employer stakeholders, background screening company stakeholders, public interest groups representing privacy and ex-offender stakeholders. We’re following a fairly well established protocol on how you establish a bona fide accreditation program that’s applicable not only to our industry but every other industry. It’s very clear that an accreditation program needs to have input from everybody that’s affected by the program; so again, employers, governmental agencies, consumer reporting agencies, applicants have been invited to participate. We are in the process of reaching out to those folks, circulating drafts. As we get their feedback, we’re modifying the drafts. It will move forward as quickly as we can giving due regard to all interests and concerns. I think within the next few years, NAPBS will have implemented an accreditation program for its members.

HRM. What impact does increasingly advanced technology have on the process of employee screening? Is there a risk that having access to so much data can lead to information overload that slows the process down? Do companies really need this information?
AC. Well, with respect to the first part of your question, clearly technology speeds the process and lowers the cost, just as it does in most situations where you bring in those kinds of techniques and systems. Costs are affected and you can do things more quickly and efficiently electronically.

As for the idea of having too much data, I don’t think there’s going to be an issue with that. If anything, additional data just serves to help ensure that the data is accurate. You always have issues with accuracy in data, so having access to more of it is going to be beneficial to all of the stakeholders as they try to make intelligent decisions.

You can break the type of information available down into two or three different categories. One category is public information. Another category is proprietary information that is assembled by a private company. A good example of private data are credit reports. In the US, there are three large credit reporting agencies: TransUnion, Equifax and Experian and they have assembled proprietary information. That information is not available to the public, meaning you couldn’t go to a public source such as a local courthouse to get it, you couldn’t contact a motor vehicle agency and you couldn’t contact a local administrative agency. This information is something that those folks put together.

Then a third category of information is when a consumer reporting agency actually performs a verification of an item. For example, verifying somebody’s college degree or high school diploma or verifying their prior employment.

So in terms of that type of data, different employers have different needs for different data points. Again, much of it may be driven by regulation. For example, truck drivers in the US are mandated to have their prior employment verified as well as their driving records. Some employers decide to do more than what is specifically mandated. Others choose to simply comply with those regulations. Basically, all of those different types of data are relevant to different jobs and to different industries.

HRM. How important do you think it is to balance the need for a thorough screening with an employee’s right to privacy? Do you think that balance is maintained across the industry?
AC. Well, clearly it’s extremely important to balance that right. In the US we have a very, very firmly established right to privacy under the First Amendment. The Supreme Court has recognized it in a number of venues and similar rights of privacy exist under state constitutions and statutes.

So people clearly have a right to their privacy. But the balancing of that right to privacy with employers’ legitimate need to know is a very, very difficult issue. I’ll give you a very good example of where this is playing out all over the country and how it affects employers in our industry and others as well.

The example deals with the redaction of identifiers from a criminal record. It would fall under a category I’m going to call redaction of identifiers. Identifiers are utilized to match a criminal record with the correct person. Identifiers include name, date of birth, social security number, residences, driver license number, gender, race, height, weight and so on. If you’re doing a criminal background check, you might have two people with very similar names: John Doe, for example. How does a consumer reporting agency distinguish one John Doe from another John Doe? Well, typically through the use of identifiers as I just described. So there is a need to obtain that kind of information.

In recent years there have been a number of laws passed based on the right of privacy that limit the availability of some of these identifiers. This is what is meant by redaction. The effect is to delay the hiring process which sometimes results in applicants with no record but with a common name being bypassed by an employer that has an immediate need to make a hire. Several consumer and identity theft groups have agreed with NAPBS’ position that there should be limits to the types of identifiers that are redacted and the manner in which they are redacted.

Part of the redaction issue concerns what identifiers should be available on the web as opposed to at a courthouse. The web makes available a great deal of information that would not otherwise be easily obtainable. Therefore balancing the right to privacy with the employer’s legitimate need to know might require redacting certain identifiers on the web but making them available at a courthouse. This is called ‘practical obscurity’. A curious person is much more likely to go onto the web but not go to a courthouse because of the ease of performing that search.

These are good examples of how the right to privacy is being balanced with an employers’ right to information. Consumer reporting agencies and employers can obtain that information but in order to do that, there’s an extra step or two they have to go through. So it’s worth it for an employer but at the same time, it protects privacy because it doesn’t allow a person’s detailed information to be out there on the web.

HRM. Finally, what do you think will be the biggest developments and trends in the screening and background check industry in the near future?
AC. There is one aspect of the ongoing immigration debate which is relevant to our industry. It’s not really getting the same amount of press as the question of what we do with 12 million people that appear to have entered the country illegally. The government is planning to impose requirements on lawyers that they utilize a system currently being developed developing called the I-9 SAVE Program, to validate the eligibility of people to work. This particular system is going to mandate that employers verify records both of the Social Security administration and Homeland Security. That’s could be a huge issue when it’s finally resolved because employers are going to have that background check mandated if the bills go through in their present form.

A final issue that I think is getting some momentum is an increased focus on the reentry of offenders into the workplace. A lot of local and federal governments are beginning to look at statutes that would create overarching rules and regulations on how long a criminal record is going to stay alive before it’s expunged or sealed. Also the question of what types of records might have shorter shelf life and what types of records might have longer or infinite shelf life.

Currently under federal law, convictions are generally reportable without limit. There are a handful of states that have laws that predate federal laws, typically limiting the useful life of a conviction to seven years. But there clearly is a need to address the burgeoning population of people being released from prison. Years ago, this country embarked on a huge expansion of prisons and now there are massive numbers of people entering the workplace with prison records. I think it’s in our government’s interest and society’s interest that we find a vehicle to ensure that these folks have a way to support themselves. Otherwise, they risk falling back into the criminal life.