HR Trends Archives - JDP

FEHA Can Hold Employment-Related Service Providers Liable for Violations

naomioverstreet — Thu, 31 Aug 2023 19:31:17 +0000

FEHA Can Hold Employment-Related Service Providers Liable for Violations

August 31, 2023

The California Supreme Court recently announced a ruling concerning the California Fair Employment and Housing Act (FEHA) and how it affects businesses. This ruling specified how businesses performing employment-related activities for others must comply with FEHA. For example, FEHA will hold the company screening job applicants liable for discrimination, not the company that received the screened employees.

How It Started

This decision expands those accountable for complying with anti-discrimination laws in California. The Supreme Court referred to the state’s definition of employer changed to include an employer’s agent. As such, employees can sue third-party businesses for independently engaging in discriminatory behavior.

This case began when employees filed a class action against third-party medical providers. According to the plaintiffs, the job screening involved inappropriate medical questions. At first, a California federal judge dismissed the case, explaining that the law did not consider third-party agents an employer.

However, the San Francisco-based Ninth Circuit Court of Appeals asked the California Supreme Court to review the case. The Ninth Circuit requested the Supreme Court to determine whether FEHA applies to third parties, determining whether employers’ agents should maintain direct liability for discrimination.

The Decision

The Supreme Court announced that FEHA protects workers throughout the hiring process; it does not matter if they outsource any step to a third party. As such, exempting businesses from liability would counter FEHA’s purpose. Justice Martin Jenkins wrote, “This interpretation extends FEHA liability to the entity that is in the best position to implement industry-wide policies that will avoid FEHA violations,” emphasizing the decision.

Furthermore, the state’s Attorney General’s office filed an amicus brief last year, which supports the plaintiffs today. Had lawmakers intended to exempt businesses from liability, they would have included the intention in the law. Such an exception could have happened any time over the last six decades, but because it did not, the law decisively holds third parties liable. As such, FEHA can hold businesses with at least five employees responsible for acts of discrimination when working on behalf of another employer.

This case reminds employers to choose their third-party agents carefully. They should also monitor the agents to ensure compliance with laws like FEHA. This decision makes employers and their third-party agents more vulnerable to lawsuits during the hiring process. As such, employers should consider working with an experienced and trustworthy background check company. The right partner will ensure compliance, reducing legal disputes while providing accurate and compliant reports.

Keep your business compliant with new laws and regulations with JDP’s reliable background checks. Speak with a sales representative today.

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Texas Governor Signs Several Key Employment Bills Into Law

naomioverstreet — Thu, 31 Aug 2023 07:00:30 +0000

August 31, 2023

Texas legislature holds sessions once every other year, typically meeting for roughly six months when they do. Since then, Texas has passed several bills that will have lasting effects on employers. They will take effect soon since the governor has signed them into law. Here are summaries of several laws that will soon take effect.

The Texas Regulatory Consistency Act

First is the Texas Regulatory Consistency Act, which legislatures presented as House Bill 2127. This Act bans counties and cities from enacting laws that regulate labor practices if they conflict with or surpass state law. It intends to “provide regulatory consistency across this state and return the historic exclusive regulatory powers to the state where those powers belong.”

This law will take effect on September 1, 2023. Before this legislation, cities could enforce local ordinances that regulated industries like agriculture, finance, insurance, or labor. As such, employers often encountered regulations that conflicted with state practices due to local laws. Examples of conflicts include the enjoined paid sick leave ordinances in Austin, San Antonio, and Dallas and the ban-the-box rules in Austin.

The Texas Regulatory Consistency Act also provides a private right of action. It applies to “Any person, including a taxpayer, adversely affected by a municipal or county ordinance, order, rule, or policy adopted or enforced by a municipality, county, municipal official or county official acting in their official capacity in violation” of Texas Labor Code.

However, the cause of action must occur on or after the law’s effective date. Additionally, it limits the resolutions to the following:

“A claimant is entitled to recover in an action brought under this chapter:

(1) declaratory and injunctive relief; and

(2) costs and reasonable attorney’s fees.”

Texas CROWN Act

The Creating a Respectful and Open World for Natural Hair Act will also take effect on September 1, 2023. This is House Bill 567, which legislators also call the CROWN Act. It addresses educational and employment settings, banning discrimination “on the basis of hair texture or protective hairstyle associated with race.” According to the law, protected hairstyles include “braids, locks, and twists.”

As such, schools should review their student dress or grooming policies to ensure they do not discriminate against protected hair texture or styles. Discriminatory policies concerning hair texture or styles associated with race cannot appear in the workforce either. This ban means employers, labor unions, or employment agencies should review their policies to comply with the CROWN Act.

Group Family Leave Insurance

The Texas legislature also passed House Bill 1996, which addresses group family leave insurance. It “allows for the approval by state regulators of insurance policies that can be used to provide fully insured paid family leave benefits for employees through optional employer-sponsored group insurance coverage or voluntarily purchased employee policies.”

As such, it covers leave an insured employee takes for various reasons. Such reasons include, but are not limited to, bonding with an adopted or newborn child, caring for a family member with a serious health problem, or the same reasons covered in the Family and Medical Leave Act of 1993. This Act will take effect on January 1, 2024.

Requirements in the Event of a Security Breach

Another bill affecting employers includes Senate Bill 768. This bill addresses security breach reporting and explains the steps employers must take to report the incident properly. The new law takes effect on September 1, 2023.

Senate Bill 768 requires affected businesses to file an electronic form to the attorney general describing the security breach. They must do this within 30 days of the violation if it affects 250 or more employees. Before this law, employers had 60 days to file.

Employers should take immediate action to ensure compliance with these new laws. One step to ensure their employment screening programs align with newly changing regulations is working with a trustworthy screening provider. The right partner stays abreast of the constantly evolving regulatory environment for consumer reporting and reliably delivers swift and accurate reports.

Disclaimer:

Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.

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FCRA Lawsuit Filed Against Cruise Line Over Pre-Adverse Action Notices

naomioverstreet — Mon, 28 Aug 2023 17:42:00 +0000

FCRA Lawsuit Filed Against Cruise Line Over Pre-Adverse Action Notices

August 28, 2023

A Connecticut-based cruise line recently received a proposed class action lawsuit. According to the case, it failed to comply with the Fair Credit Reporting Act’s (FCRA’s) pre-adverse action requirements. For example, the suit alleged the failure to provide job applicants with a copy of their background checks before making employment decisions.

The Case

A former applicant for employment with the cruise line filed this class action lawsuit after the employer denied them employment. The plaintiff alleged that the company rejected their application based on a standard background report conducted by a third-party screening provider. According to the complaint, the named plaintiff applied in March 2023. After an interview, they received a conditional offer of employment contingent on background check results.

However, the plaintiff claimed the company received an inaccurate background check. This mistake led to the cruise line retracting the job offer without providing a copy of the consumer report and a written description of their rights under the FCRA. Furthermore, they stated that the cruise line did not comply with FCRA requirements willfully and negligently. The plaintiff explained that the employer chose not to provide a pre-adverse action notification requirement.

The plaintiff claims that the background check performed by a third-party company did not include the pardon he obtained from the governor of Wisconsin in 2022. According to a press release, the plaintiff committed robberies with a friend when he was 23. However, he received a pardon and now coaches basketball and mentors youth in Milwaukee.

The plaintiff explained how they asked the cruise line to provide a copy of the background check used in the decision. They also wanted to know why the company rescinded the job offer. However, the cruise line did not answer, so the plaintiff contacted the background check company directly. After receiving the report, the plaintiff realized it did not mention the pardon.

The Result

As a result, the plaintiff filed the lawsuit when the employer failed to do their due diligence under the FCRA. The proposed class action includes any individual who lost their job or had an offer rescinded by the cruise line. However, it applies if the adverse action happened after undergoing a background check for the cruise line within the last five years.

This case shows how important it is for employers to comply with the FCRA during the hiring process. The best way to ensure your company complies with the FCRA and other laws related to the background screening process is to partner with a background check company you can trust.

JDP makes background checks easy and reliable. Speak with a compliance expert today.

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EEOC Settles Case Concerning Discrimination by AI Recruiting Software

naomioverstreet — Tue, 22 Aug 2023 16:17:42 +0000

EEOC Settles Case Concerning Discrimination by AI Recruiting Software

August 22, 2023

The U.S. Equal Employment Opportunity Commission (EEOC) recently settled a lawsuit against a major online tutoring company. As a result, the company must pay $360,000 due to accusations of discriminating against older applicants. The suit revealed that the company programmed its recruiting software’s algorithm to eliminate applications from women aged 55 or older and men aged 60 or older.

The agency learned about this discrimination when an applicant claimed she received an immediate denial after applying with her actual birth date. This applicant applied with identical information and a different birth date the next day. According to the suit, she received an interview for the second application.

However, the company refuted all allegations during the settlement. It also disputed claims by the EEOC that its tutors are employees affected by the Age Discrimination in Employment Act of 1967 (ADEA). Instead, the company maintained its stance that all tutors are independent contractors.

The settlement agreement stipulates that the tutoring company must accomplish the following:

Provide public notice about the settlement
Create new anti-discrimination policies and complaint handling
Provide appropriate training for managers
Report to the EEOC, and
Supply monetary relief to those impacted through the $365,000 payout.

This case further fueled cautions issued by the EEOC. For example, the agency warned that AI and algorithmic employment screening tools may perpetuate ageism, sexism, racism, and other biases in hiring. As proven in this suit, it can and does happen. The lawsuit alleged that these screening tools could cause employers to violate anti-discrimination rules.

The EEOC has warned employers that AI tools could screen out applicants with disabilities based on inaccessibility. They advise companies using these tools to frequently self-evaluate to determine if their screening programs could result in discriminatory hiring practices. Furthermore, employers not involved in the tools’ development may find themselves liable for any discrimination from the tools’ use.

Any employer that utilizes AI or algorithmic screening tools should do their due diligence. For example, they should ask vendors to supply data on whether the tools screen out applicants from protected groups at higher rates. They should also check the accuracy of the information and whether the screening tool still perpetuates bias. The EEOC could hold the employer responsible for the results in either scenario.

Employers should stay abreast of the latest concerns in algorithm-based hiring tools to comply with EEOC’s recommendations. One way to ensure compliance is by partnering with a background check provider. The right partner can help businesses stay mindful of anti-discrimination rulings and avoid mistakes. While implementing AI or algorithmic screening programs may save time for HR, it is no substitute for a well-informed and helpful background screening partner.

Keep your business up to date on new laws and regulations with JDP’s free news resources. Contact a sales rep today.

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CFPB Focuses Enforcement Efforts On Workplace Surveillance Technology

naomioverstreet — Thu, 10 Aug 2023 07:00:25 +0000

August 10, 2023

The Consumer Financial Protection Bureau (CFPB) has recently faced a surge of complaints about automated workplace surveillance technology. In response to this pressing issue, the CFPB issued a formal statement outlining its intentions to apply the Fair Credit Reporting Act’s (FCRA) protections. The bureau hopes to ensure that the rights and privacy of employees remain safeguarded from advancing surveillance technologies in the workplace.

Surveillance in the Workplace

The CFPB explained that companies using workplace surveillance tools for hiring and firing decisions could violate the FCRA. This risk arises from the FCRA’s purview over information used in evaluating an individual for initial and ongoing employment. This Act safeguards the rights and privacy of individuals involved. As such, employers should comply with the FCRA when using surveillance data.

The information companies collect when using workplace surveillance tools can be shared with third parties, affecting decisions unrelated to employment. For example, the decisions could affect their ability to obtain a mortgage, car loans, and others. These consequences explain why the CFPB is considering the data broker industry and concerns about this new technology. The data broker industry includes companies gathering, aggregating, licensing, selling, sharing, or reselling personal information with other businesses or people.

This information could appear in consumer reports. A consumer report is “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for employment purposes.” The FCRA defines employment purpose as a report used for evaluating a consumer for “employment, promotion, reassignment or retention as an employee.”

Protections for Employees

The FCRA provides crucial protections for employees. Workers have the right to know the contents of their consumer reports and to dispute the information if it is incomplete or inaccurate. In addition, consumer reporting agencies must correct or delete any incomplete, unverifiable, or erroneous information. For example, the FCRA prohibits these agencies from reporting outdated negative information. The Act also protects workers through specific requirements when using or furnishing consumer reports for employment purposes.

The CFPB intends to apply the protections in the FCRA to the use of employee surveillance data. As such, companies collecting and using this data should ensure they comply with the FCRA. The best way for employers to ensure compliance with the FCRA during the hiring process is to partner with an experienced background check company.

Disclaimer:

Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.

The post CFPB Focuses Enforcement Efforts On Workplace Surveillance Technology appeared first on JDP.

Red Flags to Look for During an Employee Background Check

mmather — Tue, 21 Mar 2023 13:44:25 +0000

A study by the National Association of Professional Background Screeners (NAPBS) revealed that in 2018, 95% of employers in the USA conducted employment background screening. Conducting background checks on employees has become a prevalent practice among many businesses. It’s important to note that carefully assessing the results of the background screening is also a critical step for protecting your organization. Employers should keep an eye out for potential red flags during the background check process, such as criminal convictions relevant to the job, fabricated employment or education history, discrepancies in personal information, or negative professional references. Identifying these warning signs can help employers make informed hiring decisions and avoid costly consequences.

Here are some common red flags to keep an eye out for in the background check process.

Does Not Give Permission for a Background Check

You must obtain an applicant’s or employee’s permission before conducting a background check. Consider it a red flag when a potential employee refuses to have their background checked. Should this happen, consider explaining why you need to run a check. You could also mention how knowing this information helps determine their suitability for the job. The explanation could convince them to consent to the background screening. However, continued refusal can prove a cause for concern.

Gaps in Job History

It is good to note gaps in a candidate’s employment history, but such detail does not always indicate a red flag. For example, such intervals could indicate difficulties obtaining or keeping a job, but it could also happen because they took time to care for children or a sick loved one. In some cases, they might have attended school or obtained job training. Employers should inquire about such gaps and explain the importance of honesty.

Lack of Honesty About Previous Jobs

Employers may find that job applicants regularly exaggerate their past job duties on applications or resumes. Though not often a problem with minor exaggerations, employers should watch for outright lies about previous jobs or job duties. Promptly discuss the issue to ensure no misunderstandings. Addressing it immediately, especially after making a job offer, could reveal the candidate’s qualifications.

Poor References

Sometimes, poor references happen due to personal issues or situations outside the candidate’s control. However, several contacts voicing similar complaints can become a red flag. Therefore, employers should prove thorough when vetting candidates. They should also allow the candidate a chance to explain, encouraging honesty to prevent misunderstanding.

Criminal History

Employers may find it crucial to run criminal background checks during the hiring process. Companies could face lawsuits and avoidable liabilities if they fail to check for criminal history and the employee later commits a crime. However, such concerns should not prevent you from hiring applicants with criminal backgrounds.

Employers may find that some cities or states restrict when they can conduct criminal background checks. They may also run into regulations about how they may use the information. Regardless of these regulations, employers should conduct thorough background checks on all candidates. Knowing whether the candidate’s criminal history is relevant to the position may prove vital.

Final Thoughts

Employers should look for potential red flags when considering a job candidate, which could indicate they do not fit the company’s needs. This article discussed several red flags to watch for, but employers should know this is not a complete list. In addition, the list can differ from employer to employer.

As such, the best way to choose the right applicant for you is by partnering with a trustworthy background check company. The right partner will perform a thorough background check based on your company’s needs, ensuring you know potential relevant issues with a candidate’s past.

Disclaimer:

Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.

The post Red Flags to Look for During an Employee Background Check appeared first on JDP.