Wednesday, September 08, 2010 | CLIENT CENTER | CONTACT US

Introduction to International Screening

by Lester S. Rosen

Employers have long recognized that conducting due diligence on new hires is a mission critical task. Firms cannot afford to be sidetracked by employee problems such as workplace violence, theft, false resumes, embezzlement, harassment or trumped-up injury claims. Employers can be the subject of lawsuits for negligent hiring if they hire someone that they should have known, through the exercise of due diligence, was dangerous, unfit or unqualified.

However, with the mobility of workers across international borders it is no longer adequate to conduct these checks just in the United States. A 2000 government study shows that 11.5% of the population consists of immigrants. In addition, an increasing number of workers have spent part of their professional career abroad. The number of countries from which employers seek additional information about applicants is expansive, and includes India, China, Philippines, France, Germany, Russia, Brazil, Mexico, Australia, Japan, Canada, among others.

International Background Screening Perceived As Difficult
Because of the perceived difficulty in performing international employment screening, some employers have not attempted to verify international credentials or to perform foreign criminal checks. However, the mere fact that information may be more difficult to obtain from outside of the U.S. does not relieve an employer from their due diligence obligation.

Nor can employers simply assume that the U.S. government has conducted background checks if the worker was issued a visa. After the events of 9/11, the U.S. has increased checks on foreign visitors and on workers on government "watch lists." However, the government checks are generally not aimed at verifying a credential or checking for criminal records for employment purposes.

To exercise due diligence in hiring, employers should consider screening internationally for criminal records, employment, education, and publicly available terrorist lists.

Criminal Records
When it comes to criminal records, each and every country is completely different. The availability of public records that is taken for granted here in the United States is often times not available abroad. In some countries, records are available at the courthouse, similar to how criminal records are obtained in the US. In other countries, records can be obtained from a police agency. In some countries, the best course is to have the applicant obtain their own certificate of good conduct from their local police station.

For criminal records searches, it is important to know exactly where the person has lived to ensure you are searching the appropriate court. Keep in mind also that that turnaround time for international criminal searches takes longer than domestic searches. Different countries also have different rules on the level of searches, but in most countries it is possible to obtain information of offenses that are at the felony level.

Another concern is name variations. Many countries have naming convention that is different then the US, such as the use of the mother's name. Complications can also arise for applicants whose name is based on a non-English alphabet, such as Chinese, Arabic or Japanese. There are numerous ways that such names can be translated into English.

Privacy and data protection is another crucial issue. For example, the European Union has passed strong privacy rules affecting how personal data can be obtained and utilized. U.S. background firms that do international searches should be a member of the U.S. Department of Commerce Safe Harbor program, which demonstrates a commitment to the E.U. privacy and data protection rules.

Education
Verification of an educational degree earned abroad is critical to verify credentials and to avoid fraud. An employer needs to determine if an applicant in fact attended the school claimed and received the degree claimed. Statistics show that education fraud can run as high as 20%. The employer also needs to determine if the school is accredited and authentic. The world is awash with phony schools and worthless diplomas. If the employer is not familiar with a school, they should conduct their own research. A legitimate school will often have an e-mail address or phone number so that they can be contacted to verify a degree.

Employment
Foreign employment can also be verified by contacting the employer even though they are in a foreign country. Often such calls will be made in the middle of the night due to time differences. The critical step is to obtain as much information about the past employer as possible from the applicant. If the employer does not speak English, an interpreter may be needed.

Terrorist Lists
Other due diligence tools are the various terrorist databases available to the public, such as the Office of Foreign Assets Control ("OFAC") list maintained by the U.S. Department of the Treasury. Such lists are readily available but there are limitations as well, such as working with name matches only when no additional details are available. To locate a list of web sites containing publicly available lists, and for more information on international background checks, go to: www.esrcheck.com/international.php.

Lester S. Rosen is an attorney at law and President of Employment Screening Resources (www.ESRcheck.com), a national background screening company headquartered in Novato, California. He is the author of, The Safe Hiring Manual--Complete Guide to Keeping Criminals, Imposters and Terrorists Out of Your Workplace (512 pages-Facts on Demand Press), the first comprehensive book on employment screening. He is a frequent speaker nationwide on pre-employment screening and safe hiring issues. He was the first co-chairman of the National Association of Professional Background Screeners (NAPBS), the organization for the background screening industry.

Complying with the Fair Credit Reporting Act (FCRA) in Four Easy Steps©

By Les Rosen, Employment Screening Resources
Reprinted from:

Employers have become acutely aware that hiring a job applicant with an undesirable background, criminal record or falsified credentials can carry enormous economic and legal consequences. Many employers utilize pre-employment background screening to be more careful about who is hired in the first place.

Pre-employment background screening promotes a safe and profitable workplace, by protecting an employer from negligent hiring exposure, wrongful termination lawsuits, incidents of sexual harassment, financial loss, false claims, theft, workplace disruption or time wasted in recruiting and training the wrong candidate.

Background pre-screening is normally conducted by outside agencies called Consumer Reporting Agencies (CRA). Other than calling former employers for references, employers generally cannot conduct such screenings in-house due to the specialized resource and knowledge involved. In addition, firms risk legal liability if the procedures utilized to check on applicants infringe on legally protected areas of privacy.

A federal law called the Fair Credit Reporting Act (FCRA), however, governs pre-screening obtained from outside agencies. This law sets out various requirements and rules for pre-employment background reports, called Consumer Reports. This law was substantially amended on September 30, 1997, to provide greater privacy protection to consumers, and to ensure that information was accurate and complete. Some important amendments were made in 1998.

A Consumer Report is much broader in scope than just a credit report. It affects a wide variety of information obtained concerning job applicants. A Consumer Report includes criminal and civil records, driving records, civil lawsuits, reference checks and any other information obtained by a Consumer Reporting Agency. By following the FCRA, an applicant's privacy rights are protected. For this reason, many legal experts advise employers to engage the services of an outside screening firm. The Fair Credit Reporting Act (FCRA) in four easy steps

When engaging the services of a Consumer Reporting Agency, both the employer and the CRA must follow the four steps described in this report. Failure to do so can result in substantial legal exposures, including fines, damages, punitive damages and attorneys fees. Private investigators who engage in the business of pre-employment background screening are also covered by the FCRA.

STEP ONE--An Employer must certify to the Consumer Reporting Agency that it will follow the FCRA (FCRA Section 604)

Prior to supplying a Consumer Report, an employer must certify to the Consumer Reporting Agency (CRA), that the employer will follow all the steps set forth in the Fair Credit Reporting Act. These include:

That the employer will use the information for employment purposes only.
That the employer will not use the information in violation of any federal or state equal opportunity law.
That the employer will obtain all the necessary disclosures and consents as discussed below.
That the employer will give the appropriate notices in the event that an adverse action is taken against an applicant based in whole or in part on the contents of the Consumer Report
That if a special type of consumer report is requested, called an Investigative Consumer Report, that the employer will give the additional information required by law.

These requirements are explained further in a document prepared by the Federal Trade commission entitled, "Notice to Users of Consumer Report." The FCRA requires a Consumer Reporting Agency to provide a copy of that document to every employer who requests a report.

STEP TWO--An Employer must obtain a written Release and a separate Disclosure from a job applicant before obtaining a Consumer Report (FCRA Sections 604 and 606))

Before obtaining a consumer report from a Consumer Reporting Agency, the employer must obtain written consent from the applicant and provide the applicant with a clear and conspicuous written disclosure that a background report may be requested. The disclosure must be provided in a standalone document to prevent it from being buried in an employment application. A 1998 amendment to the FCRA clarified that the disclosure and consent may be in the same document. However, the Federal Trade Commission (FTC), which enforces the FCRA, cautions that the form should not contain excessive information that may distract a consumer.

The Consumer Reporting Agency will normally provide employers with the forms needed for the Disclosure and Release. A special procedure is necessary where the employer requests a Consumer Reporting Agency to obtain employment references. Where the Consumer Reporting Agency is merely verifying factual matters, such as the dates of employment or salary, no special procedure is necessary. However, where the Consumer Reporting Agency is asking for information such as job performance, then that falls into a special category of consumer report called an, " Investigative Consumer Report.

There must be a disclosure to the applicant that an investigative consumer report is being requested, along with a certain specified language. Unless it is contained in the initial Disclosure, the consumer must receive this additional disclosure within three days after the request is made.
The Disclosure must tell the applicant that they have a right to request additional information about the nature of the investigation.
If the applicant makes a written request, then the employer has five days to respond with additional information and must provide a copy of a document prepared by the Federal Trade commission called, "A Summary of Your Rights Under the Fair Credit Reporting Act (which your background agency should provide).

As a practical matter, a Consumer Reporting Agency should handle all of these requirements for an employer as part of their services.

STEP THREE--If adverse action is intended as a result of a Consumer Report, then the applicant is entitled to certain documents (FCRA Section 604)

Where an employer receives a Consumer Report, and intends not to hire the applicant based upon the report in any way, then the applicant has certain rights. Before taking the adverse action, the employer must provide the following information to the applicant:

A copy of the consumer report

The FTC document "A Summary of Your Rights Under the Fair Credit Reporting Act." (This should be provided by the screening service.)

Here is a sample letter:

Dear Applicant,

A decision is currently pending concerning your application for employment at (the above employer)(this company). Enclosed for your information is a copy of the consumer report that you authorized in regard to your application for employment, together with a "Summary of Your Rights Under the Fair Credit Reporting Act.

If there is any information that is inaccurate or incomplete, you should contact this office as soon as possible so an employment decision may be completed.

Sincerely yours,

The purpose is to give an applicant the opportunity to see the report that contains the information that is being used against them. If the report is inaccurate or incomplete, the applicant then has the opportunity to contact the Consumer Reporting Agency to dispute or explain what is in the report. Otherwise, applicants may be denied employment without ever knowing they were the victims of inaccurate or incomplete data.

As a practical matter, by the time an applicant is the subject of a Consumer Report, an employer has spent time, money and effort in recruiting, and hiring. Therefore, it is in the employer's best interest to give an applicant an opportunity to explain any adverse information before denying a job offer. If there was an error in the public records, giving the applicant the opportunity to explain or correct it could be to the employer's advantage.

Even if there are other reasons for not hiring an applicant in addition to matters contained in a consumer report, the adverse action notification procedures still apply. If the intended decision was based in whole or part on the Consumer Report, the applicant has a right to receive the report. In fact, these rights apply even if the information in the consumer report used against an applicant is not even negative on its face. For example, an applicant may have a perfect payment record on his or her credit report, but an employer may be concerned that the debt level is to high compared to the salary. The applicant still is entitled to a notice of pre-adverse action, because it is possible that the credit report is wrong about the applicant’s outstanding debts. In a situation where the employer would have made an adverse decision anyway, regardless of the background report, following the adverse action procedures is still the best practice for legal protection.

The question that arises is how long an employer must wait before denying employment based upon information contained in a Consumer Report. The Fair Credit Reporting Act is silent on this point. However, many legal authorities advise that an employer should wait a reasonable period of time before making the final decision. This period should be the time that would be needed for an applicant to meaningfully review the report and make known to the employer or the Consumer Reporting Agency any inaccurate or incomplete information in the Consumer Report. A Consumer Reporting Agency should be able to assist employers in complying with these requirements. This does not mean that an employer is required to hold the job open for a long period of time. After the first notice is given, and the applicant has had an appropriate opportunity to respond, an employer may either wait until there has been a re-investigation, or fill the position with another applicant. Most employers find as a practical matter that this provision of law does NOT impose any hardship or burden upon an employer. Even though in rare situations an employer may have questions on how to proceed, the clear advantages of a pre-employment screening program far outweigh any complications that can theoretically arise from compliance.

STEP FOUR--Notice must be give to an applicant after an adverse action (FCRA sec. 615)
If after sending out the documents required in Step 3, the employer intends to make the decision final, the employer must take one more step. The employer must send the applicant a Notice of Adverse Action informing the job applicant that the employer has made a final decision, along with another copy of the FTC form "Summary of Your Rights under the Fair Credit Reporting Act.

The Notice of Adverse Action must contain certain information. The following is a sample letter that contains the necessary statements:

Dear Applicant,
In reference to your application for employment, we regret to inform you that we are unable to further consider you for employment at this time. Our decision, in part, is the result of information obtained through the Consumer Reporting Agency identified below.

The Consumer Reporting Agency did not make the adverse decision, and is unable to explain why the decision was made.

You have the right to obtain within 60 days a free copy of your consumer report from the Consumer Reporting Agency as identified below and from any other consumer reporting agency which complies and maintains files on consumers on a nationwide basis.

You have the right to contact the Consumer Reporting Agency listed below to dispute any information contained in the report that you believe may be inaccurate or incomplete. A copy of your rights under the "Fair Credit Reporting Act" is enclosed, entitled "Summary of Your Rights under the Fair Credit Reporting Act." (List the Consumer Reporting Agency's name, address and phone number below, including any 800/888 number.)

Many employers find it difficult to believe that Congress intended that an applicant be notified twice, both before an adverse action and after. However, the law clearly requires two notices. This is also the interpretation of the Federal Trade Commission Staff. The purpose is to give job applicants the maximum opportunity to correct any incomplete or inaccurate reports that could affect their chances of employment.

The following is a copy of the summary of rights that should be given to a job applicant any time an employer sends one of the two letters in this report. This can be copied directly from this site, or by going to, "A Summary of Your Rights Under the Fair Credit Reporting Act." A one-page printed copy is available from ESR for ESR clients.

Schedule an Online Demo Today!