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Reminder to California employers about requirements when taking adverse action based on a criminal record

With the enactment of an updated ban-the-box statute (the Fair Chance Act) on January 1, 2018, employers in California may need a refresher on how to take adverse action based on the criminal record of an applicant.

For those businesses located in Los Angeles, the requirements take on an additional level of complication due to slight differences in the city’s ordinance.

Pursuant to California law, employers with five or more employees must wait until after a conditional offer of employment has been made to ask any questions about a criminal history. This means inquiries about convictions, running a background check or other efforts to find out about an applicant’s criminal past.

As an aside, several types of criminal records are not allowed to be used by employers in the hiring process (including juvenile records, diversions and deferrals, non-felony marijuana convictions that are more than two years old and arrests that did not lead to a conviction).If the employer decides not to hire the applicant, it must conduct an individualized assessment of the conviction at issue to evaluate whether it has a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.”

The applicant needs to be notified of the potential for adverse action based on the conviction. Such notice must identify the conviction at issue and include a copy of any background check report; the employer must also provide a deadline for the applicant to submit additional information with regard to the conviction (such as rehabilitation efforts or other mitigating circumstances).

Federal law also kicks in. For those employers that intend to rely in whole or in part on a background check report to take adverse action such as rescinding a conditional job offer, the Fair Credit Reporting Act (FCRA) mandates that applicants be given a pre-adverse action notice, a copy of the report and a notice of rights.

Once the applicant has provided any information and the employer makes a final decision, a second notice is required. This time, the notice should inform the applicant of the final adverse action, explain any procedure in place for the applicant to challenge the decision or request reconsideration and describe the applicant’s right to file a complaint with the state’s Department of Fair Employment and Housing (DFEH). If the FCRA has been triggered by the use of a background check report, the employer must also provide the applicant with an adverse action notice that contains FCRA-required text.

While this process may seem onerous, employers that hire workers in Los Angeles face additional requirements under the city’s Fair Chance Initiative for Hiring Ordinance (FCIHO). The law, which took effect on January 22, 2017, applies to employers with 10 or more workers (defined to include individuals who perform at least two hours of work on average in Los Angeles and are covered by the state’s minimum wage law).

The FCIHO has a narrower definition of a “conditional offer of employment” than that under state law – here, an offer of employment to an applicant “is conditioned only on an assessment of the applicant’s criminal history, if any, and the duties and responsibilities of the employment position.”

Regardless of the source of criminal history, if an employer elects not to hire an applicant, a written assessment that “effectively links the specific aspects of the applicant’s criminal history with risks inherent in the duties of the employment position sought by the applicant” must be performed.

This assessment needs to be provided to the applicant as part of the “fair chance process,” along with any other documentation or information used by the employer as well as a pre-adverse action notice. Again, if a background check report was used, the FCRA requirements apply. The applicant also receives an opportunity to share information the employer should consider before making a final decision, such as evidence of rehabilitation.

After at least five business days, the employer may make a final decision. If the applicant provided additional documentation or information, the employer is obligated to consider it and conduct a written reassessment. If the employer decides to take adverse action against the applicant anyway, the employer must notify the applicant and provide a copy of the reassessment along with the adverse action notice.

June 21st, 2018|Employment Decisions, Legislation|

Reminder to New York City employers about requirements when taking adverse action based on a criminal record

Let’s say you are an employer in New York City with a position to fill. During the hiring process, you learn that an applicant has a criminal conviction. What should you do if you elect not to hire her and want to avoid breaking the law?

The answer is not simple.

In New York State, it is unlawful to deny employment or take an adverse action against an applicant because of a criminal conviction unless a direct relationship exists between the criminal offense(s) and the specific position sought, or the employment of the individual would involve an “unreasonable risk” to property or to the safety and welfare of specific individuals or the general public.

Before an adverse employment decision may be based on a conviction record, Article 23-A of the New York State Correction law provides a list of factors that employers must consider:

  • New York’s stated public policy “to encourage the licensure and employment of those with previous criminal convictions.”
  • The specific duties and responsibilities related to the employment sought or held.
  • The bearing, if any, the criminal offense(s) for which the individual was convicted will have on her fitness or ability to perform one or more of the position’s duties or responsibilities.
  • The time elapsed since the occurrence of the criminal offense(s).
  • The age of the individual at the time of the occurrence of the criminal offense(s).
  • The seriousness of the criminal offense(s).
  • Any information produced by the individual (or on her behalf) addressing rehabilitation and good conduct. Any certificate of relief from disabilities or certificate of good conduct creates a presumption of rehabilitation with regard to the offense specified in the certificate.
  • The legitimate interest of the employer in protecting property and the safety and welfare of specific individuals or the general public.

An employer must apply each of these factors on a case-by-case basis before making an adverse employment decision. If all the factors are properly weighed and an employer makes a reasonable, good faith decision that the criminal offense bears a direct relationship to the job duties or that the applicant’s employment would involve an unreasonable risk to safety and welfare, it is not illegal to deny employment.

New York law does require that if employment is denied because of a conviction record, a statement setting forth the reasons for the denial must be provided upon request of the applicant, in writing and within 30 days.

Another wrinkle for employers who use a third-party to perform a background check: the federal Fair Credit Reporting Act (FCRA). If an employer elects not to hire an employee based in whole or in part on the background check, the statute requires the applicant receive a copy of the background check report, a notice of intent to take adverse action and a notice of rights.

Employers in New York City, however, have additional legislation to contend with. The Fair Chance Act (FCA), enacted in 2015, applies to employers with at least four employees. Covered employers are prohibited from inquiring about a job applicant’s criminal history until after a conditional offer of employment has been extended.

Assuming the offer has been made and an employer has learned of a conviction that proves troubling, the FCA sets forth several requirements for an employer to rescind the offer without running afoul of the statute.

After the factors of Article 23-A have been applied, an employer must follow a “fair chance process.” This involves providing applicants with a copy of their background check report – and if a third party was used to perform the check, the FCRA notice of rights and a notice of intent to take adverse action, per the FCRA – and any other information relied upon in connection with the employment decision, such as Internet searches or written summaries of oral conversations.

In addition, employers must provide an analysis of the Article 23-A factors (the New York City Commission for Human Rights (NYCCHR) provides a Fair Chance Act Notice Form for employers to use)) and the opportunity for the applicant to address the criminal history at issue and present any mitigating information or material prior to the employment offer being revoked.

The prospective position must be held open for at least three business days from the applicant’s receipt of the necessary documentation to allow time for a response. Further, if the employer used a third-party background check company, the FCRA also mandates that applicants receive a reasonable period of time to respond (the Federal Trade Commission has suggested that five business days would be sufficient in most circumstances).

The Notice Form requires employers to evaluate each Article 23-A factor and select which exception – direct relationship or unreasonable risk – it is relying upon, with the burden on the employer (and space provided on the Notice Form) to articulate its conclusion. In addition to the Notice Form, employers that made use of a background check report must provide an applicant with an adverse action notice required by the FCRA.

If an employer rescinds a conditional offer after receiving information about the applicant’s criminal history, the FCA established a rebuttable presumption that the withdrawal was due to criminal history.

To rebut the presumption, an employer must demonstrate that the revocation was due to a permitted reason, such as the results of a medical examination (where an exam is otherwise permitted), material information the employer could not have known before the conditional offer was made and would have kept the employer from making the offer in the first place or evidence that the employer did not have knowledge of the applicant’s criminal history prior to revoking the conditional offer.

Some employers are exempt from the FCA when hiring for certain positions if federal, state or local laws require a criminal background check or prohibit employment based on certain criminal convictions. Companies in the financial services industry or employers hiring police and peace officers, for example, may not be subject to the law’s requirements. Those employers who believe they are exempt must inform an individual upon application and keep a record of their use of the exemption.

June 21st, 2018|Employment Decisions, Legislation|

NOTICE OF UPDATES TO OUR TERMS AND CONDITIONS AGREEMENT, PRIVACY POLICY AND NEW GDPR NOTICE OF RIGHTS

Data privacy is our top priority at Scherzer International (“SI”).  SI has undertaken diligent efforts to ensure our compliance with the GDPR which became effective May 25, 2018.  Here are some of the things that we’ve done:

  • We added a clause about GDPR* compliance setting forth our respective obligations under this regulation to our Terms and Conditions Agreement (the “Agreement”), which now – unless superseded by another agreement – governs SI’s provision of background screening reports (“Reports”). The Agreement can be accessed here and is applicable to all Reports ordered from SI on or after May 25, 2018 (“Effective Date”).
  • We revised our Privacy Policy by adding information about our compliance with the GDPR requirements regarding the processing of personal data of individuals located in the European Economic Area (EEA) covered by the GDPR and made some wording changes for clarity.  Please note that as before, our website does not use cookies or otherwise track any personal data.
  • We posted a “GDPR Notice” on our website, which informs EEA individuals of their rights in connection with their personal data.

There is no need for you to take any action. By continuing to interact with SI and using our services after the Effective Date, you agree to these terms.

Of course, you can opt out at any time, by contacting Joann Gold, Executive Vice President/Chief Compliance Officer, at jgold@scherzer.com.

WE APPRECIATE YOUR BUSINESS!

*“GDPR” means Regulation 2016/679 of the European Parliament and of the Council of the European Union, and the European Commission of April 27, 2016, on the protection of natural persons with regard to the processing of Personal Data and on the free movement of such data, known as the General Data Protection Regulation.

May 25th, 2018|European Union, International, Legislation, Privacy|

The legalities of monitoring employees online

As a general principle, employers are legally permitted to monitor their employees online during business hours. Keeping a close eye on workers can help maintain company confidentiality, limit workers from surfing the web on company time and ensure the prevention of harassment.

But such monitoring does come with caveats, as well as risks.

For example, screening employee email on the employer’s network may be permissible but may require advance notice. In states such as Connecticut and Delaware, laws are in place that require employers to provide prior notice before electronically monitoring employees. A union contract may also place certain limits on monitoring and public-sector employees may have some rights under the Fourth Amendment with regard to unreasonable search and seizure.

Federal law can also come into play. Although the Electronic Communications Privacy Act (ECPA) generally prohibits the monitoring of electronic communications, it contains a “business purpose exception” that permits employers to monitor the electronic communications of workers if the company has a “legitimate business purpose.” The statute also allows monitoring with consent and many companies do this by including such permission as part of the onboarding process for new employees before granting access to the company’s networks or systems.

Another wrinkle: third-party communications. States such as California and Illinois mandate that all parties to a communication provide consent to its interception in transit. For employers, that means providing notice to recipients of employee emails and obtaining their consent before scanning a message from a friend or third party. Many companies post a notice on the company’s website and/or include a statement in employee emails that all messages are subject to monitoring and any response implies consent with the employer’s practices.

Even with all these issues, monitoring emails may be more straightforward than focusing on employee social media accounts. The Stored Communications Act (SCA) addresses the situation of accessing electronic communications stored by a provider (such as Gmail or Microsoft), as distinct from an employer accessing emails on its own system. Under the SCA, employers can be liable for the unauthorized access and disclosure of electronic communications in storage on corporate servers of a provider.

Further, roughly half the states ban employers from either requiring or requesting a worker to verify a personal online account like a Facebook profile, blog or Instagram or to log on to their social media account. While technology is available for employers to get around these laws (using keystroke logging software, for example, or taking screenshots), some of the information being monitored by an employer could itself be protected – such as union organizing activities under the National Labor Relations Act, attorney-client communications or in some states, geolocation data.

Mobile devices add another layer to the analysis. For workers using employer-provided mobile phones or devices, the employer has the right to legally monitor use from contact lists to photos and videos to Internet visits and emails. As for bring-your-own-device (BYOD) situations, the terms are generally dictated by the employer’s BYOD policy, but this is an emerging area of law and therefore murky.

All of these legal considerations are centered in the United States. Companies that operate outside the U.S. borders will have international law to contend with as well, notably the European Union General Data Protection Regulation (GDPR) and regulations found in its member states. As a general matter, EU law and the GDPR offer employees a greater level of privacy than that found in the United States. Last year, the EU’s highest court did rule that companies can monitor employee email – if workers are notified in advance.

Perhaps most importantly, employers should recognize that like all things related to technology, the legalities of monitoring employees online are constantly evolving. Being able to adapt to changing laws, regulation and technology will keep employers on their toes.

May 4th, 2018|Educational Series, Security|

The challenges of employment applications for multi-state employers

One of the hottest trends in employment in recent years has been the passage of “ban-the-box” and salary inquiry prohibitions in states and cities across the country.

Limitations on salary inquiry have popped up in recent years as part of the legislative fight against wage discrimination and the gender pay gap. Proponents of such prohibitions argue that salary history questions feed into the discrepancy between what male and female employees are paid by continuously repeating history.

Currently, California, Delaware, Massachusetts, Oregon and Puerto Rico have banned inquiries about prior salary, as have cities including New Orleans, New York, and Philadelphia, with dozens of other states and local governments considering such measures.

The colloquial term “ban-the-box” refers to a box that applicants check to indicate they have a criminal record on standardized application forms. About 20 states and more than 150 local entities have already enacted legislation addressing inquiries into criminal history. The trend even went federal in 2015 with the Fair Chance Act introduced in Congress. Although the measure did not pass, it demonstrated the popularity of the movement.

The proposed federal legislation also shined a light on the situation facing multistate employers, with different laws in different states and in some situations, different laws in different cities or municipalities within the same state. One law may contain an outright ban on inquiries into salary or criminal history while another may place restrictions on the timing of the questions. Some laws define covered employers to include businesses with five or more, employees; another may not apply its limitations to employers with less than 50 workers.

As an example, although the state already limited employers’ ability to ask job applicants about any juvenile court matters, the California legislature broadened its ban-the-box protections for employees with a new law in 2017. Employers in the state are restricted from making hiring decisions based on an applicant’s convictions records and forbidden from considering conviction history until a conditional offer of employment has been extended.

If an employer elects not to hire an applicant because of a prior conviction, the employer is required to conduct an individualized assessment to determine whether the history has a “direct and adverse relationship” with the job duties that justifies denial of the position. Written notice must be provided to an applicant that his/her conviction history has disqualified the applicant from employment, along with five days to respond and dispute the decision. A second notice must be provided with the final decision not to hire.

In contrast, Vermont’s ban-the-box measure takes a different approach, allowing employers to question applicants about their criminal records during the job interview, albeit providing an applicant with the opportunity to explain their record. And under New York City’s law, an employer commits a per se violation of the statute by using recruiting materials of any kind (including advertisements, solicitations or applications) that express, directly or indirectly, any limitation or specification regarding criminal history.

While the overarching principle remains consistent, the details of the laws vary from jurisdiction to jurisdiction. For multi-state employers, coping with such a patchwork of legal requirements poses a serious challenge.

As the number of state and local jurisdictions with laws addressing salary inquiries or criminal history continues to expand, multi-state employers should brace themselves for a giant compliance puzzle – and consider getting help from an expert.

May 4th, 2018|Employment Decisions, Legislation|

Business identity theft is alive and well

And it can happen to your business.

Criminals do not discriminate – any type of business or organization of any size or legal structure including sole proprietorships, partnerships, LLCs, trusts, non-profits, municipalities and county governments, school districts and corporations are all targets for business identity theft.

What exactly is business identity theft?  First, let’s clarify that we are not talking about an information security breach or an incident involving the loss or theft of confidential consumer information. Rather, business identity theft discussed here involves the actual impersonation of the business itself.

It happens when criminals pose as owners, officers or employees of a business in order to get their hands on cash, credit or loans, leaving the business on the hook to deal with the debt. A favorite tactic of identity thieves involves the theft of the tax identification number (TIN) or employer identification number (EIN) of the company or the owners’ personal information to use that data to open new lines of credit or obtain a business loan based on the company’s identity.

Another common form of business identity theft occurs when criminals file fake documents with the Secretary of State’s office to change company information such as its registered address or the names of directors, officers or managers. Once the records have been changed, the identity thieves can establish lines of credit or new accounts with the false information.

Other examples of the fraudulent use of a company’s information include current or former employees making use of their access to financial documentation; establishing a temporary office space or merchant accounts in a company’s name; going through a business’s trash and recycling bins to find account numbers or other sensitive data; using phishing attacks or other scams to get the business’s banking or credit information from employees; and filing for tax credits with stolen EINs.

Businesses are an attractive target for identity thieves. Generally speaking, a company will have higher credit limits than an individual, so opening a new account or line of credit in a business’s name will yield more cash for a criminal and larger purchases will receive less scrutiny. Perhaps most frustrating, companies are required by law to report certain identifiers (an address, EIN/TIN, and names of directors in most states), meaning the information is publicly available and easily accessible to anyone.

The invoicing and payment terms typically available to businesses can also work against them. Identity thieves may have a window of up to 30 days after a purchase to disappear before a company detects a problem – and even longer if the thieves use a different address.

Unfortunately, business identity theft is an underreported crime for a variety of reasons. Companies often have no idea their identity has been compromised until they begin receiving unfamiliar bills and collection notices when it is already too late to stop the thieves. Government agencies receive frequent requests for changes to company information and an address change is unlikely to raise red flags. Some businesses aren’t paying close enough attention or fail to caution employees about the possibility of phishing scams, while others may be embarrassed or concerned about their reputation with customers and don’t want to report what happened.

Given the underreporting problem, statistics on business identity theft can be hard to come by. However, the Internal Revenue Service (IRS) said it has seen the number of corporate tax returns flagged for potential business identity theft increase exponentially in recent years, from 350 in 2015 to 4,000 in 2016 with a jump to 10,000 in only the first six months of 2017. The cost of the damage has also risen dramatically, from $122 million in 2015 to $268 million the following year and $137 million for just the first half of 2017.

Importantly, these numbers reflect just one of the many forms of business identity scams.

What can companies do to protect themselves? Click here for a checklist of the most important steps for prevention and what to do if your business becomes a victim.

April 12th, 2018|Criminal Activity, Fraud, Security|

All judgments and tax liens to be removed from consumer credit reports

As reported last year, Equifax, Experian and TransUnion (the “NCRAs”) implemented enhanced standards for the collection and timely updating of public record data as part of the requirements of the National Consumer Assistance Plan (the “NCAP”) and accordingly, effective July 1, 2017, removed all civil judgments and the majority of tax liens from their databases.

The NCRAs are now going a step further to comply with the NCAP’s standards and to resolve pending litigation by removing all tax liens from consumer credit reports effective April 16, 2018. Bankruptcy records will continue to be reported.

March 22nd, 2018|Judgment, Legislation|

We Did It!

THANK YOU!

We jingled all the way to the finish line and surpassed our fundraising goal! With everyone’s efforts we were able to raise $3,284 and had 26 members go out and walk/run! The morning was full of laughs and some amazing sing-along moments led by Larry Scherzer himself!

We ended the race hand-in-hand singing “Ain’t No Mountain High Enough”. We had a couple of team members who placed in their division!

We are already thinking about next year’s run! How does a Scherzer International marching band sound? …You will not want to miss that!

 

With your donation we are helping conquer everyday battles for one in five adults and 300,000 children with arthritis and related diseases.

December 14th, 2017|Uncategorized|

The Best Deal Out There!

It is #GIVINGTUESDAY ” the Tuesday following Thanksgiving and Black Friday and Cyber Monday, a global day of giving fueled by the power of social media and collaboration.” Take part and give back to your community. Scherzer International would like to invite you to participate in #GIVINGTUESDAY by signing up to be a part of the Scherzer International team.  On Sunday, December 10, 2017 at 8 a.m. at Glendale Central Park meet us at the starting line and walk – maybe run – a 5K like no other. Wear your “ugly” holiday sweater, put some jingle bells on your shoes, and enjoy some breakfast goodies at the finish line.

Follow this link and join us in finding a cure for America’s leading cause of disability.

For those who cannot attend the race you can “Jingle in Your Jammies” Choose this option and for $30 you receive a shirt and fundraise for a cure!

All donations, big or small, make a difference. Thank you!

November 28th, 2017|Uncategorized|

We Continue to Jingle!

Arthritis is a serious and growing health crisis – impacting one in every five adults and an estimated 300,000 children. It’s America’s #1 cause of disability. The Arthritis Foundation’s Annual Jingle Bell Run aims to change those numbers. At Scherzer International we are continuing our efforts to raise funds for those affected by Arthritis.

This past Thursday, November 16, we had our first fundraiser for the 2017 Jingle Bell Run at The Stand. SI employees, their families and friends made their way over to The Stand and enjoyed some delicious items. From every purchase, 20% of the proceeds went to support SI’s fundraising goal which aims to raise funds and awareness for Arthritis.  Thank you to The Stand Northridge and Woodland Hills location for the wonderful food and for supporting local community fundraiser’s like ours.

Everyone’s efforts are greatly appreciated. Thank you to anyone who has donated or maybe shared a social media post.  If you would like to see us reach our fundraising goal and get a head start on your New Year’s Resolution by participating in The Jingle Bell Run just click here!

“Jingle Bell, Jingle Bell, Jingle all the way 
Oh what fun it is to run with the Scherzer Fam today!”
 

 

November 20th, 2017|Uncategorized|