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March 2, 2020
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From Open Hiring To Negligent Hiring: How To Reduce Risk And Promote Inclusivity

As employers face a critical talent shortage amongst historically low unemployment rates, organizations are turning to nontraditional methods to source workers. While it’s not uncommon for a job listing to include a set of requirements for the position, what if those prerequisites were limited only to the ability to lift over 50 pounds, stand for eight hours, and be authorized to work the United States?

No “previous experience required.” No “college degree preferred” or minimum GPA necessary. No verifiable qualifications demanded. That’s what candidates for employment at The Body Shop’s retail stores will find in store for them come this summer.

Open Hiring          

Open hiring policies abandon traditional pre-employment screening, such as criminal background checks, drug tests, and verifications of employment, education, and references in favor of, “replacing scrutiny with trust.” In most cases, there's not even an interview – any interested worker is eligible for hire.

While the unemployment rate in the U.S. lingers around 3.6%, that still represents an estimated 5.9 million people who are without a job. And for many of these individuals, their past histories, which may include criminal convictions, present barriers from getting a paycheck. 

In fact, one in three adults in America, or an estimated 77 million individuals, have a criminal record, and around 2.2 million individuals are currently inmates in the federal or state penitentiary systems. What’s more, criminal recidivism rates show that about four in nine ex-offenders will re-offend at least once during their first year out of prison.  

And that’s where open hiring fills a gap. 

From Greyston To The Body Shop

Since 1982, New York-based Greyston Bakery has utilized an open hiring model to “accept an individual based on current actions and future potential, not judge them on their past." Open hiring hopes to curb criminal recidivism by getting people employed.

Greyston maintains a waiting list of individuals wanting a job. When a position opens up, the person at the top of the list gets invited to complete a paid internship at their bakery. Upon successful completion of the course, a full-time job is theirs. It's that simple. Around 75% of Greyston’s bakery staff, which comprises close to 80 workers, have come through their open hiring model.

After consulting with Greyston and piloting open hiring at their distribution center in North Carolina, The Body Shop recently announced that it will adopt an open hiring model for its retail associates in the United States. Much like Greyston, candidates seeking employment at The Body Shop will be hired on a first-come-first-served basis, absent background screening, or drug testing.

By comparison to Greyston, the deployment of open hiring at The Body Shop is massive. The Body Shop employs around 1,000 retail workers during peak seasons, with 10,000 employees in total and annual revenue close to $1 billion dollars. And with size comes greater risk.

Negligent Hiring

Employers must act reasonably when hiring, supervising and retaining workers. Negligent hiring occurs when an employer fails to verify that a prospective employee may present a danger to the organization.

Negligent hiring claims can be brought by an individual when an employer fails to screen a worker adequately, and that worker subsequently harms someone else.

In making a negligent hiring claim, the harmed individual argues that the business knew or should have known their worker's background history before hiring them.

While states have defined the elements necessary to prove a negligent hiring claim, at their most basic, the harmed party must establish:

  1. The employer owed a “duty of care” to others when hiring the worker
  2. The employer breached that duty
  3. The breach was the cause of the injury or harm
  4. The injury or harm was reasonably foreseeable
  5. Damages resulted from the employer’s inaction.

The bottom line: If an employer is not diligent in assessing a worker's background and that worker harms someone, that employer could be on the line for the worker's actions.

And employers are responsible for the ongoing supervision of their workers and ensuring that their retention does not indicate foreseeable harm to the organization's workforce or its clients.  

Case In Point

Successful negligent hiring claims are disruptive to business and are avoidable. The number of lawsuits filed against organizations are numerous, with settlements averaging more than $1 million, and court awards often exceeding several million dollars. 

Take the case of a healthcare provider who failed to perform a background check on its employee who subsequently murdered a client and his grandmother.

A criminal background check would have revealed six felony convictions. Instead, two individuals are dead, and the company paid out $26.5 million to the Plaintiff, including $18 million in punitive damages.

In the manufacturing space, an employee shot and killed a coworker as a result of a workplace confrontation. If the employer had conducted a criminal background check and requested a reference check of former employers, the employer would have learned that the Defendant had multiple criminal convictions, including carrying an illegal weapon on the job site. The employer was found liable for negligent hiring, supervision, and retention. 

And in retail, the actions range the gamut from allegations of sexual assault of a child customer to incidents resulting in the murder of coworkers. In all cases, the employer is held accountable for the actions of their employee if they could have reasonably foreseen the consequences of their employee's actions.

Balancing Inclusivity With Risk

While open hiring models are admirable, they introduce risk to an organization that comes with legal liabilities associated with negligent hiring. Directly inquiring into and verifying an individual's past can help to reduce an employer's risk of a negligent hiring claim.

Some states have even passed legislation that protects organizations from negligent hiring claims when hiring ex-offenders. And most employers are amenable to working with individuals with criminal records. 

Here are some tips to avoid a negligent hiring claim while supporting inclusive hiring:

Eliminate barriers in the pre-hire process

Ban the Box measures delay when an employer can inquire into a candidate’s criminal history. In some cases, they may also include special notice requirements and may also limit the types of criminal information that an employer can consider when making their suitability decision.

Even if you are not in one of the 34 jurisdictions in the U.S. that have enacted a ban the box law, you might consider removing the criminal history question from your job postings and application so that all individuals are encouraged to apply regardless of their criminal history.

Trust but verify

Ask candidates to disclose their former employment and education history. Verify that information looking for gaps in a candidate's past. Engage in an open discussion with the candidate to understand how life events have shaped their work history; professional references that solicit substantive information can help develop a picture of the individual as a worker.

Equitably assess criminal history

Employers should avoid blanket policies that exclude individuals from hire. Instead, employers should create policies that promote fair hiring practices.

In particular, employers are encouraged to following the Equal Employment Opportunity Commission’s guidance and consider:

  • The nature and gravity of the crime
  • The time that has passed since the crime or completion of the sentence
  • The relationship of the crime to the worker’s ability to perform the job without reasonable cause of harm to the organization

Screen proportional to role

Not all workers introduce the same amount of risk to an organization. Employers should consider tailoring their background screening practices to align with the roles their workers will fill.  Identity verifications and reviews of previous employment and references should be a must for all workers. Criminal record searches and drug testing may be relevant for some positions but not others.

And industries like energyfinancehealthcare, and transportation must meet specific minimum background check requirements as identified within the regulations that govern them.

· Benchmark to avoid negligence

Remember that negligence results when an organization falls below a reasonable standard of care. Employers should network with other businesses in their industry to set a baseline for screening. Falling below that baseline could be evidence of negligent hiring practices. 

Good Intentions May Lead To Bad Consequences

While open hiring models are a novel way to approach recruiting, employers should proceed cautiously and understand the legal risks associated with adopting an open hiring model.

Employers can still foster inclusivity and embrace change for the better while taking reasonable measures to protect their workforce and guests through effective background screening.

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March 2, 2020
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Employers warned to expect continued uncertainty as ‘Brexit day’ arrives

As the UK’s membership of the EU comes to an end at 11pm tonight, employers have been told to expect continued uncertainty over the coming months and the government continues to negotiate its future relationship with the bloc.

The official Brexit day comes at the end of a busy week for immigration policy, as the government yesterday published the details of its new ‘fast track’ visa, which replaces the current Tier 1 Exceptional Talent scheme, in effect expanding it to include scientists, researchers and mathematicians.

The government said under the new Global Talent scheme, as it is known, scientists and researchers will not be required to have an offer of employment before arriving in the UK and will provide an accelerated path to settlement for all individuals who are endorsed on the route.

This will allow higher education, research institutes and eligible public sector employers to recruit talent from abroad after Brexit.

The new scheme will also remove the cap that the current Tier 1 scheme has, although critics have pointed out that the Tier 1 visa cap was never reached. The scheme will open on 20 February.

Chetal Patel, partner at Bates Wells, said the timing of the Global Talent visa was “pivotal” as the UK leaves the European Union. But, she said it was still unclear if employers would see the new route as a long-term solution or simply a PR exercise.

“While this latest development is welcome news for some, questions remain as to how Whitehall will create a fully functioning immigration system by January 2021 – a tall order given the time and resource which will be spent during the transitional period,” she said.

Yesterday’s changes are part of the initial phase of wider reforms to the UK’s immigration system post-Brexit, which the government has said will include an Australian style points-based immigration system.

Earlier this week the Migration Advisory Committee (MAC), the government’s migration advisors, put forward its recommendations for the UK’s future immigration system, calling for an overhaul of the Tier 1 visa and for the salary threshold for migrants to be dropped from £30,000 to £25,600.

Gerwyn Davies, senior labour market analyst at the CIPD, said the broad direction of the MAC’s suggestions and the introduction of the Global Talent visa was welcome news for employers. 

But, he said many employers were still ill-prepared for the introduction of restrictions for EU citizens. “This is partly because there remains uncertainty about the government’s post-Brexit immigration policy, especially in terms of the Australian points-based system that has been heavily publicised by the new Conservative administration,” he said.

“While employers can be forgiven, on the one hand, for not preparing because of this uncertainty, it is extremely likely that the proposals in the [December] white paper will become law,” He added.

Gillian McKearney, head of UK Immigration at Fieldfisher, said the coming few months would be critical for employers, especially those with large numbers of EU nationals, to ensure they have a process in place to manage the right to work status for their EU employees.

She said  that while the government’s EU Settlement Scheme did provide a route for EU citizens currently living in the UK to stay beyond Brexit, recent figures suggest up to 1 million eligible people have yet to apply to the scheme.

“This is something to take into consideration, and business management should take on the responsibility of encouraging and supporting their EU employees to apply to the EU Settlement Scheme and tracking those who do not wish to,” McKearney said.

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March 2, 2020
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1.87 million ‘economically inactive’ people to be targeted – what might the screening challenges be?

Staff shortages can be dealt with by training the 8.5 million people who are economically inactive. The BBC's Reality Check team look into how valid this claim may be.

Many of those people are students, carers, sick or retired - and fewer than two million of them say they would actually like to have a job.

Home Secretary Priti Patel was asked on the BBC's Breakfast programme about the ways in which businesses might be able to deal with staff shortages under the government's new immigration system.

"We have over 8.45 million people in the UK aged between 16 and 64 who are economically inactive," she said.

"We want businesses to invest in them, invest in skilling them up."

Economically inactive people are:

  • not employed - they do not have a job
  • not unemployed - they have not looked for a job in the past four weeks and/or are not available for work in the next two weeks

The latest Office for National Statistics (ONS) figures show 8.48 million 16- to 64-year-olds are economically inactive, so the home secretary is right on this.

The ONS breaks down some of the reasons they fall into this category.

The biggest category is students, who account for 27% of the inactive. They may be able to take on part-time jobs, but could not be relied upon to deal with the staff shortages that some business groups have warned about.

Another 26% of the inactive population count as sick - almost all of whom are long-term sick.

Next up, 22% of the inactive are those who are looking after their homes or caring for family members.

The fourth most common reason for economic inactivity is people who have retired before the age of 65 - that's 13% of the total.

There is a very small category - less than half a percent - who describe themselves as "discouraged workers".

The last 11% are classified as "other", which includes people who say they have not yet started looking for work, those awaiting the results of job applications and some who say they do not need to work.

The ONS says that of the 8.48 million economically inactive people:

  • 6.61 million do not want a job
  • 1.87 million would like a job

So those 1.87 million could be targeted by businesses seeking to invest in their skills - although there may be various reasons why they are not currently looking for work.

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