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This newsletter is sent to clients of Employment Screening Resources (ESR) as well as employers, Human Resources and Security professionals, and law firms who have requested information on pre-employment screening, safe hiring, the FCRA and legal compliance. Please note that ESR's statements about any legal matters are not given or intended as legal advice but only general industry information. For specific legal advice, employers should contact their attorney. If this was sent in error, you can be removed from this mailing by simply using the “remove" feature at the end of the newsletter and you will not receive any future newsletters. (Reading time: Less than 5 minutes) ESR Newsletter and Legal Update
1. New Utah Privacy Laws Impact Employers and May Show Future Trend Utah is the latest state to pass tough new privacy laws when it comes to Personally Identifiable Information (PII). Utah passed a new law effective May 12, 2009 called, “The Employment Selection Procedures Act.” See: http://le.utah.gov/~2009S1/bills/hbillenr/hb1002.htm The law prohibits an employer with more than 15 employees from collecting an applicant’s social security number, date of birth or driver’s license number before a job offer or before the time when a background check is requested. In addition, if the person is not hired, the employer will not keep the information beyond two years. The employer also may not use the information for any other purposes and must maintain a “specific policy regarding the retention, disposition, access, and confidentiality of the information.” An applicant has the right to view the policy. The idea appears to be to limit the flow of personal data before or unless it is needed and to destroy it if no longer needed. For employers using paper applications, it creates an administrative burden since the employer needs to add another step to get the data required for a background check if an applicant moves forward in the hiring process. However, electronic hiring procedures, such as the Applicant Generated Report system offered by ESR, solves this issue, since an applicant is only asked to provide confidential data only if the employer decides to perform a background check and the information only goes to the screening firm. ESR provides Utah employers with a sample policy in the ESR proprietary 50 state guide available after logging onto the ESRnet system. The Utah law is part of a growing trend to restrict access to PII in order to prevent identity theft. Some courts have attempted to restrict the access of identifying information in public records, which makes it harder for employers to receive accurate reports on a timely basis. State legislatures are also getting involved in privacy issues. New York, for example, has passed laws that severely restrict the use of PII, even including a social security number that has been truncated so only the last four digits are used. The nationally known law firm of Jones, Day has posted an excellent article on the New York law. See http://www.jonesday.com/pubs/pubs_detail.aspx?pubID=S3778 Background checks by screening firms such as ESR, however, are in compliance with these types of laws. ESR transmits data using state of the art encryption and security technology. States that prohibit the mailing of information that contains PII have an exception where such a mailing is required by law. Screening firms are in fact required by the Fair Credit Reporting Act and some state laws to provide copies of reports directly to applicants. Examples are where an applicant has asked for a copy of the report or where an adverse action notice is being sent. Please contact Jared Callahan at 415-898-0044 or by e-mail at jcallahan@ESRcheck.com for additional information. 2. Sign of the Times – Bill Pending in Congress Requires Consent for Financial Institutions to Offshore Personally Identifiable Information (PII) One of the issues facing businesses and consumers is the protection of Personally Identifiable Information (PII) of consumers. This can become challenging because there are some industries, including some screening firms, which send information offshore for processing which may include PII. There are strong arguments that keeping PII in the U.S. is a best practice, because it not only keeps personal data within the protection of U.S privacy laws, but it also helps to ensure quality and accuracy. As a sign of the times, there is a bill pending in Congress that clearly demonstrates that at least one Congressman believes that sending personal data offshore context of the financial industry without at least giving a notice is not a best practice. H.R. 427, introduced by U.S. Representative Ted Poe (R-TX) is entitled: Notify Americans Before Outsourcing Personal Information Act. The purpose is, “To prohibit the transfer of personal information to any person or business outside the United States, without notice.” The written notice “must be sent by regular mail, not e-mail, and separate from any other financial disclosure or information. It must be written in easily understandable, plain language.” There is also a 90 day notice requirement before it may go offshore. The list of personally identifiable information (PII) goes well beyond the social security number and include things such as address, e-mail and even mother’s maiden name’ More information can be obtained at: http://www.govtrack.us/congress/bill.xpd?bill=h111-427 The current version of the bill only applies to financial institutions, so it would not impact employers in the context of background checks. Also, just because a bill is introduced in Congress does not mean it will become law. However, it is a sign of the times that there is substantial concern with sending PII offshore beyond the reach of U.S. privacy laws. This bill does not propose to prevent the off shoring of data, but would merely require that notice be given to applicants. If applied to screening as well, then presumably the free market would operate and consumers would decide if they want to apply to employers that offshore their private information. Employment Screening Resources does not offshore PII for processing. All work is done right here in the U.S. Even when it comes to international verifications of employment and education, ESR does not send information offshore unless there is no other choice, and even then, ESR only sends the minimum information that is absolutely required by an in-country representative. The majority of our international verifications are performed from the USA. 3. Don’t Even Bother to Interview Before Hiring? Maybe Not as Ridiculous as it Sounds The June 2009 issue of Fast Company magazine ran an article that suggested that employers may get better results if they hire without doing an interview. The story was by Dan Heath and Chip Heath, authors of “Made to Stick-Why Some Ideas Survive and Others Don’t.” The apparent radical suggestion was based upon a substantial body of empirical evidence that shows interviews are not nearly as predictive of job performance on future jobs as other tools, such as work sample, job-knowledge tests, and peer ratings of past job performance. The authors cite a study where a medical school admitted based upon interviews. After the class was selected, the school was told to admit another 50 students. Since the best remaining students had gone elsewhere, the school was forced to take 50 “dregs.” The result—there was no difference between those that interviewed well and those that did not in terms of academic achievement or even in the first year internship, where social skill could arguably play a role. The authors compare the idea that a short interview can tell an employer if an applicant is a good hire to a baseball manager that ignores batting statistics and instead takes a prospect out for a beer to judge “fit.” The authors concluded that the reason an interview is relied on so heavily is that employers think they are good at it. As noted in previous newsletters by ESR, studies have demonstrated that most people are poor judges of when they are being told the truth and when they are being deceived. Paul Ekman, a psychology professor in the Department of Psychiatry at the University of California Medical School in San Francisco, is the author of thirteen books, including Telling Lies. Ekman has tested about 6,000 people who are professionals trained to spot liars, including police officers, lawyers, judges, psychiatrists, and agents of the FBI, the CIA and the Drug Enforcement Administration, to determine if they can tell if someone is lying. According to his research, most people are not very accurate in judging if a person is lying. The average accuracy in studies is rarely above 60%, while chance is 50%. Even among professional lie catchers, the ability to detect liars is not much better than 50%. In one study, customs agents who interviewed people at customs stations did not do any better than college students. The Fast Company article concluded that job tests is one of the most effective means of hiring, and cites as an example, asking a sales applicant sell you something, or having a graphic designer design something. This advice is exactly in line with what ESR had been suggesting to employers for many years—trust but verify. Industry statistics suggest that as many as 30% of all job applicants falsify information about their credentials. Trying to rely on interviews give little protection. Some interviewees tell lies they have ingrained in their life story. They have created identities and legends of their own and, when they tell their stories, they are not fabricating on the spot. They put “it” on their resumes and talk about it and tell their friends about it. It becomes part of their personalities and personal histories because they have told it so often. It becomes second nature as they retell it again and again. There are lists of so-called “tell-tale signs” that a person is lying. For example, employers might observe if a person is avoiding eye contact, fidgeting, or hesitating before answering. Unfortunately, it can be a costly mistake for an interviewer to think lying can always be detected by such visual clues by relying upon one’s own instinct or intuition, since some of the so-called “visual clues” can simply be a sign of nervousness about the interview, or stress, and not an intent to lie. In fact, accomplished liars are more dangerous because they can disguise themselves as truthful and sincere. An experienced liar may show no visible signs. Employers, HR and Security professionals should remember that as valuable as instinct may be, it does not substitute for factual verification of an applicant’s credentials through techniques such as employment screening background checks and skills tests. 4. See the ESR Press Release http://www.prleap.com/pr/124407/ on our New Book, The Safe Hiring Audit (click within this headline) Still Typing in Applicant Data? ESR Speaks 2009 Speaking Schedule July 1, 2009 New Orleans, LA July 13-14, 2009 Las Vegas, NV July 15, 2009 San Francisco, CA September 21, 2009 Anaheim, CA November 8-11, 2009 Tampa, Florida ESR Articles (click for more info) The FCRA in 4 Easy Steps Criminal Records and Employment Applications 10 Safe Hiring Tools Negligent Hiring Please feel free to contact Jared Callahan at ESR at 415-898-0044 or jcallahan@esrcheck.com if you have any questions or comments about the matters in this newsletter. Please note that ESR's statements about any legal matters are not given or intended as legal advice. Employment Screening Resources (ESR) |
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