Background checks: The Importance, The Options, The Guidelines.

1. Background checks: The Importance, The Options, The Guidelines. Presented to: The Cleveland Better Business Bureau

2. Importance of Background Checks and Due Diligence

3. Importance of Background Checks • It is an employer’s obligation to maintain a safe working environment and that obligation arises from legal principles • Background screening is an integral part of the hiring process and can help you mitigate for many types of risk: • Theft • Workplace violence • Lost business and customers • Negligent hiring claims • Time wasted in recruiting, hiring and training • Even if a bad hire doesn’t result in a lawsuit, bad publicity can destroy a company. • While the pre-screening method does not completely protect the company, it does provide employers with an extra level of assurance against hiring employees who could cost them millions in lawsuits or thousands to replace them.

4. Importance of Background Checks • Important Statistics • 34% of all applications contain outright lies about experience, education, and ability to perform essential job functions (Wall Street Journal) • 1 in 6 violent crimes occurs in the workplace (Workplace Violence: Bureau of Justice Statistics) • Average settlement of a negligent hiring lawsuit is nearly $1 million (Human Resources Management, 2008) • Approximately 30% of employees admit to stealing from their employers (HR Magazine: Legal Trends) • The replacement cost of a bad hire is up to 2.5 times the salary of the job in question (Right Management Survey) • 53% of all job applications contain inaccurate information. – SHRM 2008

5. Due Diligence • Create internal policies and mandate a companywide commitment to mitigate risk and promote a safe work environment. • Develop a screening policy to ensure safe hiring practices. • Follow all FCRA rules and regulations. • Select the right screening provider for your organization. • Use multiple screening products and develop position-specific standardized searches. • Establish criteria to evaluate information. For example, what will constitute disqualifying information? • Conduct a periodic program review to ensure that all applicable policies are being adhered to. • Conduct periodic screening of employees to maintain a dependable workforce free of unlawful behavior. • Understand your state and federal requirements.

6. Due Diligence • Awareness of products/available in the marketplace • Criminal searches • Proprietary Database information • Statewide Criminal Searches • County Court House Searches • Inmate/Department of Corrections (DOC) • Sex Offender • FBI/Fingerprint • Other products • SSN Verification • Drug Screening • Education/Employment Verifications • Civil Searches • Credit Reports • Motor Vehicle Reports • I9 & E-Verify • References

7. Compliance and Guidelines

8. FCRA – Fair Credit Reporting Act • A key component of any background screening program is remaining compliant with the FCRA. • FCRA is a complex piece of legislation with numerous provisions. • Includes: how information is protected, what information is disclosed, and how an individual can correct/delete inaccurate or outdated information, or dispute information. • Organizations must understand their obligations under the FCRA. • Consumer Reporting Agencies (CRAs) that furnish consumer reports (i.e. background screening companies) must also comply with the FCRA. • FCRA regulations were designed to protect applicant privacy and contribute to fair hiring practices • employers who follow FCRA rules and regulations will mitigate exposure to costly litigation

9. EEOC Guidelines • The Fair Credit Reporting Act imposes, among other obligations, the requirement of using consumer reports accessed for employment purpose in compliance with federal and state Equal Employment Opportunity (EEO) regulations. Information relating to employment issues and the EEOC can be found on the EEOC’s Employers page http://www.eeoc.gov/employers/index.cfm. • With regard specifically to criminal records, the EEOC recently issued updated guidance explicitly relating to the use of arrest and conviction records in employment decisions. • Enforcement Guidance on Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 is available on the EEOC’s website http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm. • To ensure compliance with this newly issued Guidance, employers are encouraged to evaluate their current on-boarding practices to determine compliance with the Guidance document and consult with legal counsel. 

10. EEOC Guidelines In its Guidance, the EEOC indicates that employers should develop targeted screening when utilizing criminal records in employment decisions. This targeted screening must, at the very least, consider the following “Green” factors (Green v. Missouri Pacific Railroad, 523 F. 2d 1290 (8th Cir. 1975)), • Nature and gravity of the crime • Harm caused • Legal elements (specifics of crime) • Classification of offense (misdemeanor v. felony) • Time since conviction • Nature of the job

11. EEOC Guidelines The Guidance also indicates that targeted screening must be based on a written policy, which according to best practices outlined in the Guidance, must include the following: • Essential job requirements for each position for which a criminal background check will be utilized • Documentation for validating the policy • Including research and data gathered for the formulation of the policy • Training for individuals involved in hiring to ensure compliance with Title VII • Offenses that would not be acceptable for the job along with a timeframe for how long the offenses would be considered unacceptable for the position •  “Individualized assessment” for applicants who are convicted of any of the  crimes identified as unacceptable in the policy document

12. EEOC Guidelines If an adverse decision may result from the evaluation of the targeted screening policy document, the consumer must be informed prior to making the adverse decision and  the employer must offer an “individualized assessment”, before the final adverse decision is made. This “individualized assessment”, according to the Guidance document, must be comprised of the following factors,   • The facts or circumstances surrounding the offense or conduct; • The number of offenses for which the individual was convicted; • Older age at the time of conviction, or release from prison; • Evidence that the individual performed the same type of work, post conviction with the same or a different employer, with no known incidents of criminal conduct; • The length and consistency of employment history before and after the offense or conduct; • Rehabilitation efforts, e.g., education/training; • Employment or character references and any other information regarding fitness for the particular position; and • Whether the individual is bonded under a federal, state, or local bonding program.

13. EEOC Guidelines The EEOC offers the following best practices through the Guidance: • Eliminate policies or practices that exclude people from employment based on criminal records • Train managers, hiring officials, and decision makers about Title VII and its prohibition on employment discrimination • Develop a policy for  utilizing criminal records in the screening process • When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity. • Keep information about applicants’ and employees’ criminal records confidential. Only use it for the purpose for which it was intended In addition to the recommended best practices, the EEOC has provided a Q & A document that answers issues related to the guidance: http://www.eeoc.gov/laws/guidance/qa_arrest_conviction.cfm.

14. Who We Are • IntelliCorp Records • Providing background screening since 1996 • A member of the Verisk Analytics Family of Companies • Background Screening Credentialing Council (BSCC) accredited by the National Association of Professional Background Screeners (NAPBS) • Named a Top Screening Provider on HRO Today’s 2012 Baker’s Dozen • We offer discounted pricing to BBB Accredited Businesses • Criminal Checks • MVRs • Drug Testing • Employment and Education Verifications • ….and more

15. Contact Info IntelliCorp Records www.intellicorp.net Chris Hughes Senior Sales Rep 216-450-5238 chughes@intellicorp.net Matt Garbincus Channel Sales Executive 216-450-5212 mgarbincus@intellicorp.net