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Verifile International Newsletter Issue #5

19 Jun 2014

Welcome to our June edition of the International Newsletter 2014 which we hope you find helpful in keeping up to date.

In this issue of the International Newsletter:

- European Regulators, FTC Unveil Cross-Border Data Transfer Tool

- International Privacy Laws Still Pose Challenges for the Discovery Process


- Whitewash on the Blacklist


- Record Settlement for Allegations of Systemic Visa Fraud and Abuse of Immigration Processes

 - Job Seekers Need Clear Privacy Law
 - CV Fraud at Epidemic Levels

 - ECJ Declares Data Retention Directive Invalid

 - EU Justice Ministers Remain Broadly Committed to Extending the DP Regulation's Territorial Scope


 - UK Financial Services Sector Bouncing Back

- Recruitment Intentions Among LMO Employers Fall to 54%

- Student Visa System ‘Abused’ to Gain Illegal Entry to UK

 - Changes to the civil penalty scheme to prevent illegal working

 - Changes to legal definition of ‘work with children’


 - Random Alcohol & Drug Testing Struck Down, Again

 - High Tech B.C. Canada Drivers Licenses Include Criminal Records

 - New Fingerprint Technology Being Purchased

 - Toronto Police
Criminal-Background Check Backlog Puts Thousands of Jobs and Studies in Limbo

 - Toronto Area to Add 230,000 Jobs By 2017


 - Bill to Drug Test Pharma Employees Filed in the U.S. House Representatives

 - Child Care Workers Must Complete Criminal Backgrounds Checks Under Senate Bill

 -  "Ban the Box" and Beyond: San Francisco Joins Growing List of Jurisdictions Restricting Employment-Related Criminal Records Inquiries

 - City Manager Ron Carlee Decides to "Ban the Box"

 - "Ban the Box" Moves Forward in Louisville Despite Fischer Administration's Objections

 - Bill Mandates Background, Credit Checks for Health Site in Kansas

 - Rhode Island Bill Expands Background Checks for Third-party School Employees

 - State Bill Would Regulate Health Care Navigators

 - Two Data Brokers Settle FTC Charges That They Sold Consumer Data Without Complying With Protections Required Under the FCRA

 - Beyond Credit Reporting: The Extension of Potential Class Action Liability under the Fair Credit Reporting Act

 - FCRA Class Action USB Financial Services

 - Joining Other states and Localities, Indianapolis "Bans the Box" for City Vendors and Further Restrictions Criminal Backgrounds Inquiries

 - Sixth Circuit Affirms Dismissal of EEOC Credit Check Case and Rejects "Homemade" Method of Determining Race by "Eye-Balling" Photos

 - Wisconsin Adopts Password Protection Law

 - Statewide Ban the Box Reducing Unfair Barriers to Employment of People With Criminal Records

 - 5 Ways to Prevent Negligent Hiring Claims

 - Fingerprints and Photos Could be Part of the Background Check Record

 - No Need For Business To Fear "Ban The Box" Measure, Employment Attorney Says


 - Brazil to Drop Local Data Storage Rule in Internet Bill



World wide news



European Regulators, FTC Unveil Cross-Border Data Transfer Tool

After a year of collaboration on the effort, the U.S. Federal Trade Commission (FTC), together with data protection authorities from around the world, held a press conference at the IAPP Global Privacy Summit to announce a joint agreement between the G29 and APEC countries aiming to aid companies in achieving compliance with global data transfers. Isabelle Falque-Pierrotin, chairwoman of the French Data Protection Authority (CNIL) and president of the Article 29 Working Party, said the tool, called a “referential,” is a “very political and symbolic act” for companies seeking to obtain double certification under Europe’s binding corporate rules (BCRs) and APEC’s cross-border privacy rules (CBPRs). The referential is a pragmatic checklist that compares and identifies the common principles among BCRs and CBPRs and aims to help companies identify additional requirements they may need to comply with in order for their data transfers to be legal. Falque-Pierrotin specified, however, that the referential does not aim to create a mutual-recognition system. FTC Chairwoman Edith Ramirez said the U.S. is committed to continuing working with the EU on data transfer mechanisms such as BCRs and Safe Harbor, and that’s why this tool is an important step in the dialogue.


Read more


International Privacy Laws Still Pose Challenges for the Discovery Process

The discovery process can be cumbersome and expensive regardless of where it takes place, but international laws protecting sensitive information can make the process even more complicated. Especially in the European Union, where a cultural mindset that has protected the private affairs of citizens have been stringently enforced for the better part of a century, collecting information for litigation presents unique challenges that legal departments should be aware of. Alvin F. Lindsay of Hogan Lovells LLP and an expert in technology and litigation says that within the EU, “Data privacy is usually taken very, very seriously. In fact, after World War II, the European Commission found that the right to privacy in one’s correspondence is a ‘fundamental human right.’” It’s essential for attorneys and legal departments working with clients or opponents internationally to comply with the discovery restrictions regardless in a given country. While this further complicates the discovery process, violation of terms can result in sanctions and penalties that no legal team would welcome. And according to Lindsay, similar data protection stipulations are likely to pop up in other areas around the world.

Read more 


Africa Middle East



South Africa 2

Whitewash on the Blacklist
The new regulations to the National Credit Act may keep companies in the dark about certain information pertaining to employee applicants and potential vendors. In February, Dr Rob Davies, Minister of Trade and Industry, gave notice of new regulations to the National Credit Act, 2005. The change came into effect 1 April 2014 and the Department of Trade and Industry (DTI) has given Credit Bureaus in South Africa approximately two months to remove adverse consumer credit information from, and information relating to paid-up judgments. In other words, 6.5 million status updates relating to 4.2 million credit profiles will soon be deleted.
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Asia Pacific 

 Record Settlement for Allegations of Systemic Visa Fraud and Abuse of Immigration Processes 
Infosys Corporation, an Indian company involved in consulting, technology, and outsourcing, has agreed to a civil settlement of allegations of systemic visa fraud and abuse of immigration processes by paying a settlement amount and agreeing to enhance corporate compliance measures, announced U.S. Attorney John M. Bales. The $34 million payment made by Infosys as a result of these allegations represents the largest payment ever levied in an immigration case. Infosys is located in thirty countries and in 17 cities in the United States, including a location in Plano, TX. The Plano location is responsible for handling the immigration practices and procedures for the United States’ operations of Infosys. Infosys brings foreign nationals into the United States in order to perform work and fulfill contracts with its customers under two visa classification programs relevant to this matter, H-1B and B-1. According to court documents, the government alleged instances of Infosys circumventing the requirements, limitations, and governmental oversight of the H-1B visa program by knowingly and unlawfully using B-1 visa holders to perform skilled labor in order to fill positions in the United States for employment that would otherwise be performed by United States citizens or require legitimate H-1B visa holders.


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New Zealand

Job Seekers Need Clear Privacy Law

The tribunal recognised applicants would probably have expected their personal information to be kept confidential. The decision of the Human Rights Review Tribunal to make a company disclose to a failed job applicant the CVs and reference checks of others going for a job is an example. The aggrieved party complained that he was discriminated against on the basis of age, so he wanted to see the credentials of others who applied or succeeded in the process. Under the court system's rules of "discovery", which the tribunal adopts, all information pertinent to an action needs to be handed over from the defendant to the plaintiff. So Alpine and its recruitment agency must give the man the information it has on the successful candidate and those who contested and lost. This could include references, security checks, medical information, criminal records, past behavioural issues or work performance details provided by former employers and referees. This is a complex legal zone of overlapping public and private interests and parallel laws. While the sanctity of anti-discrimination law and the principle of full discovery are vital, surely the discrimination against and invasion of others' privacy requires a clear, fair legislative fix.

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 CV Fraud at Epidemic Levels

An Auckland private investigator claims 80 per cent of CVs his firm is called in to check turn out to be false in some way. Other private investigators and recruiters say while CV fraud is widespread, the number of CVs that prove to be either misleading or outright incorrect is more in the range of 15 to 20 per cent. They say private investigators often get called in once a company already has suspicions over a candidate. It's a problem that has been around for many years and it reared its ugly head again last month when it was revealed Michael Vukcevic falsely claimed to have a law degree from Victoria University when he applied for the top job at multinational law and patent firm Baldwins. PwC's 2014 Global Economic Crime Survey, out last month, found human-resources fraud - which includes fake CVs - had for the first time become one of the big five frauds affecting Kiwi businesses.

 Read more



ECJ Declares Data Retention Directive Invalid 
The European Court of Justice (ECJ) has declared the Data Retention Directive invalid. The Court's decision was grounded on its conclusion that, by requiring the retention of the data falling within the scope of the Directive, and by allowing the competent national authorities to access those data, the Directive interferes in a particularly serious manner with the fundamental rights to respect for private life and to the protection of personal data. The judgment was rendered in response to questions posed to the ECJ by the national courts of two EU Member States. The Irish High Court posed questions regarding the legality of national legislative and administrative measures concerning the retention of data relating to electronic communications. The Austrian Constitutional Court posed questions arising from an action by 11,130 individuals in Austria questioning the compatibility with the Federal Constitutional Law of the Austrian provisions transposing the Data Retention Directive into Austrian national law. The ECJ's decision will trigger a rethink of both EU and EU Member States' laws on government surveillance.

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EU Justice Ministers Remain Broadly Committed to Extending the DP Regulation's Territorial Scope

At the EU’s Justice and Home Affairs Council meeting on 3 and 4 March, the Justice Minsters had a debate on the proposed EU Data Protection Regulation. They broadly supported the draft provisions regarding the territorial scope of the Regulation, which would make the Regulation applicable, for example, to U.S. companies with customers or users of their services in the EU.  According to the Council’s press release, Ministers agreed that more technical work will need to be done on international data transfers and alternative models will need to be studied in-depth. The Council confirmed that work will continue at a technical level on the basis of the progress achieved so far on: pseudonymisation as an element of the risk-based approach, portability of personal data for the private sector, and obligations of controllers and processors. There were varied views on profiling. The majority of delegations consider that the scope of profiling should be limited to regulating automated decision-making as per the current DP Directive, but some delegations say that there should be specific provisions on the creation and use of profiles. The EU Justice and Home Affairs Council will next meet 5-6 June.

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United Kingdom 2

 Fake Job Applications Most Common Entry Point for Fraudsters, Says CIFAS

Organisations are most vulnerable to employee fraudsters at the recruitment stage, according to a report from the UK's Fraud Prevention Service, CIFAS. It said that deceitful attempts to gain access to sensitive data via the recruitment process accounted for more than 50% of all subsequent internal fraud cases in 2013. Overall employee fraud rose by 18% in 2013 compared to 2012, but this is the first time since the founding of the Internal Fraud Database in 2006 that dishonest attempts to gain employment accounted for the majority of insider fraud cases. Figures show that the most common reason for application fraud (40%) was because potential employees had concealed unspent criminal convictions. The number of fake job applications that are discovered at the hiring stage had increased by 70% increase in 2013. Despite this, Mike Emmott, CIPD employment relations adviser, said it was even more important for employers to invest in comprehensive pre-employment checks now that competition for jobs had increased. However, the report noted that it isn't always possible to detect a potential fraudster at the recruitment stage, because the average length of service an individual spent with a company before committing fraud was six and a half years.

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London Has Highest Number of Skilled Workers in Europe

London is the undisputed business capital of Europe, according to research carried out by Deloitte. The Fortune Global 500, an annual ranking of the top 500 corporations worldwide, shows that 40% of companies have their European headquarters in London. Paris has the second highest number of European HQs with just 8% of the Fortune 500. Of all the high-skill workers in Europe's business capitals, 46% are based in London. The figures suggest London has a larger concentration of skilled workers in Europe than New York does in North America; with 31% of North American skilled workers based in the Big Apple. "London is a magnet for business and business people," said Deliotte London senior partner Knowles-Cutler. "One of our recent and related studies found that London leads the world when it comes to employing people in high-skill, knowledge-based sectors. Of the 22 high-skill sectors identified, London leads in 12 of these, employing 1.5 million people." London is also popular for non-European businesses looking for headquarters in Europe. Knowles-Cutler added the reasons for this included the prominence of English as the language of business and the relative political and financial stability of the UK.

Read more
Higher Penalties for Employing Migrant Workers Illegally

Professional HR managers are unlikely to make an adverse assumption about a job candidate's immigration status on the basis of a name, accent or appearance. By the same token, these employers will know how to stay compliant with both immigration and discrimination law, and are not likely to be affected by the doubling of the maximum civil penalty for employing a worker illegally (the penalty rises from £10,000 to £20,000 on 1 May 2014). However, organisations may derive some benefit from a revised version of the statutory code of practice for employers on 'Avoiding unlawful discrimination while preventing illegal working', which has been released in draft form to coincide with the increased penalties. There is little new in the code but its central point is a solid one. It advises employers not to make assumptions about immigration status and to ask all job candidates to prove their right to work in the UK by producing specified documents before starting work. It also says that job applicants can be asked to provide documents at any stage before they start work.

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Only 8% of Generation X Ever Have the Education on Their CV’s Checked

Qualifications are less likely to be checked the further away from graduation day a candidate gets, but the Higher Education Degree Datacheck (HEDD) warns of temptation to embellish on CVs due to pressure from the new ‘2.1’ wave of graduates. Of the 20,288 enquiries received since HEDD – the government-backed degree verification service – 76% have been to check qualifications of those who graduated after 2000 and almost half are to verify graduates who left university within the last four years. Just 16% of enquiries were to undertake checks on those who graduated in the 1990s, and the number was halved (8%) for those leaving university before the ‘90s. Eight per cent of HEDD enquiries have been classified as ‘unverified’. While reasons for this include incomplete or incorrect information supplied by candidates, such as married names instead of maiden names, there is also evidence of subject changes, grade inflation, fake certificates and bogus institutions. “Graduates who are further on in their career have more opportunity to blatantly lie, exaggerate or bend the truth a little more than their more recent counterparts simply because they are not being checked out,” said Jayne Rowley leader of the HEDD initiative at Graduate Prospects.

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North America

Canada 2


Random Alcohol & Drug Testing Struck Down, Again

An Alberta Board of Arbitration has concluded that an employer's random alcohol and drug testing policy does not stand up to the legal test set by the Supreme Court of Canada in last year's Irving decision. This is a significant early use of the Irving decision and provides insight into the problems an employer must face - and prove - before justifying random testing. In 2012, the Union filed a grievance objecting to Suncor's proposed random alcohol and drug testing policy on the basis that it is "unjustifiable, unreasonable, and violates employees' privacy rights, human dignity, and human rights." The arbitration board considered the decision in Communications, Energy and Paperworkers Union, Local 30 v. Irving Pulp and Paper, relating to random testing which held that there must be "evidence of a problem with alcohol and drugs" in the workplace in order for random testing to be warranted. This is the first arbitral decision in Alberta to consider Irving. It demonstrates that employers must offer powerful and compelling evidence of a problem with alcohol and drugs at the particular worksite in order to meet the burden of proof placed upon them and successfully implement random testing in the workplace. 
Read more


High Tech B.C. Canada Drivers Licenses to Include Criminal Records

Withone million of its new high-tech drivers' licenses in use, the B.C. government is preparing to use them for access to medical records, applying for student loans and a range of other uses. The new driver's license was introduced a year ago, with a digital chip that replaces the existing medical CareCard system, which had run out of control. The health ministry estimated that there were more than nine million CareCards in circulation, about twice as many as there are residents of B.C. Andrew Wilkinson, minister of technology, innovation and citizens' services, released results of a public consultation on the new cards. With digital security similar to bank cards, he said the public appears prepared to use them to apply for prescription renewals, birth, death and marriage certificates, voter registration and criminal records checks. Secure online access to such government services would require passwords to be issued, "robust" computer programs to be completed and at least half of B.C. residents to have the new cards, Wilkinson said. They are being issued as current drivers' licenses expire, and the new services could be available by the end of 2015.

Read more


New Fingerprint Technology Being Purchased

The Chatham-Kent Police Service is going high-tech when it comes to fingerprint records. As with most things in policing, keeping up with technology is not an option, it's mandated. July 1 is the target date for police agencies to submit fingerprint forms electronically and as of July 1, 2015, the RCMP will be requiring all police services to submit electronic fingerprints for civil matters, including applications for police clearance checks. The police service board has approved purchasing two Livescan Cabinet systems for $85,993 and a Livescan Applicant Processing system for $11,413 to meet this requirement. However, the cost has not caught the police service by surprise and won't be impacting the current budget. According to the report to the board, one workstation will be housed at Chatham-Kent Police headquarters to take fingerprints for criminal matters that will be submitted electronically to the National Criminal Records database. Another workstation will be located in the DNA room at the Chatham-Kent Courthouse to be used by court services staff. Having a Livescan workstation at the courthouse will avoid having to transport accused persons back to police headquarters if it is deemed fingerprinting needs to take place if additional charges are laid.

Read more

Toronto Police Criminal-Background Check Backlog Puts Thousands of Jobs and Studies in Limbo

A “catastrophic” backlog in Toronto police background checks for students, health professionals and other workers could grow worse if the RCMP makes fingerprinting a mandatory part of the process. The Toronto Police Services Board is grappling with how to manage the 200 new requests for checks received each day, contributing to a backlog that peaked at almost 17,000 requests last year. Waiting times for a check can stretch for months. At stake are timely job acceptance and school placements for thousands of applicants every year. Police checks meant to uncover a potential criminal record are mandatory in a variety of workplaces. Last year, Toronto police received more than 108,000 requests for the two types of checks they provide. The first kind is called a clearance letter, which shows a person’s criminal record and can be checked by any police force using a database called the Canadian Police Information Centre (CPIC). The second type, called a “vulnerable sector screening” or VSS, is a more in-depth process and must be done by the police force where the person lives. For employment fields that require a valid VSS issued within six months, some checks have expired by the time they are needed.

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Toronto Area to Add 230,000 Jobs By 2017

The next four years will bring 230,000 new jobs to the Greater Toronto Area, according to a new report released by BMO Economics. Employment expanded by 4% in 2013, the strongest single-year performance in 13 years, though the unemployment rate remains elevated at 8%. "Looking ahead, employment growth is expected to pick up again," said Robert Kavcic, senior economist, BMO Capital Markets. "The city will likely see roughly 230,000 jobs created by the end of 2017, pulling the unemployment rate down to 7 percent, or just slightly above pre-recession levels.” Toronto's economy stands to benefit from a weaker Canadian dollar, according to Kavcic. “Manufacturing, which directly accounts for about 10% of employment, will get a boost, along with the tourism sector with Toronto — along with Canada as a whole — suddenly looking like an improved value for both U.S. and local tourists,” Kavcic said. Bill Wu, BMO's regional vice president of commercial banking in GTA North, noted momentum in the GTA across its broad base of sectors, and particularly among specialized manufacturers with niche markets such as health-sciences, service-based industries and IT companies.

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United States

- U.S Legal Issues -

Bill to Drug Test Pharma Employees Filed in U.S. House of Representatives

A bill introduced February 18, 2014 in the U.S. House of Representatives would require registered manufacturers and distributors of controlled substances identified under the Controlled Substances Act to perform criminal background checks and drug testing for employees with access to controlled substances. The measure, “Ensuring Patient Access and Effective Drug Enforcement Act of 2013” (H.R. 4069), would require registrants, as a condition of registration, “(A) to obtain a criminal background check on each of the registrant’s employees who has or will have access to facility areas where controlled substances under the registrant’s possession or control are stored, such as a cage, vault, or safe; and (B) to perform drug testing on each such employee in accordance with the Federal and State law.” The background checks would have to be conducted at least every two years, and upon hire, once the bill was enacted. Civil penalty provisions for failing to comply with the new mandates are included in the law. The Attorney General would have authority to issue regulations and guidelines to carry out the amendments. The bill has been referred to the House Energy and Commerce, and Judiciary Committees.

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Child Care Workers Must Complete Criminal Background Checks Under Senate Bill

The Senate has voted 96-2 to reauthorize a $5 billion annual grant program that provides childcare for 1.6 million children. It includes a new requirement that all providers who care for children with federal funding complete criminal background checks and learn first aid. The bill includes amendments added by Sens. Mary Landrieu, D-La. and David Vitter, R-La. Landrieu's amendment requires states to develop disaster plans for childcare centers. Vitter's amendment requires enforcement of a long-established requirement of the childcare grants that priority be given to parents of children with special needs. Vitter's amendment would require the Department of Health and Human Services' Inspector General to submit an annual report to the secretary about compliance. Vitter's provision would also cut grants by five percent for states that don't have a system in place to comply with the mandate. Currently, 23 states don't comply with the requirement. Louisiana is one of five states that is in full compliance. Sharon Hennessey, executive director of People First of Louisiana, said it's time for Congress to put some teeth into the law's special needs mandate. "There needs to be a push to bring the 23 states that don't comply into compliance," Hennessey said.

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"Ban the Box" and Beyond: San Francisco Joins Growing List of Jurisdictions Restricting Employment-Related Criminal Record Inquiries

San Francisco recently joined the ranks of “ban the box” jurisdictions that restrict the criminal record information a private employer can request. Others include Massachusetts, Rhode Island, Minnesota and Hawaii, and the cities of Philadelphia, PA, Buffalo, NY, Newark, NJ and Seattle, WA. The San Francisco ordinance will become operative on August 13, 2014. It applies to all employers located or doing business in San Francisco, that have 20 or more employees regardless of their location. However, the restrictions apply only to employment or prospective employment that is wholly or in substantial part within San Francisco city limits. The San Francisco ordinance is in some respects duplicative of other laws, though it is more restrictive and imposes additional obligations. San Francisco employers who are subject to this ordinance should review their job advertisements, employment applications, hiring policies and practices, and record retention programs to confirm they are in compliance. Given the patchwork of laws now in place and the anticipation that additional laws are likely to emerge, employers should consider taking a holistic approach in lieu of viewing this as involving only one jurisdiction or only the format of their employment application forms.

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City Manager Ron Carlee Decides to "Ban the Box"

Charlotte City Manager Ron Carlee has officially "banned the box". Applicants for city jobs will now no longer see a question about prior convictions on the initial application. The exception will be for public safety jobs. Applicants will be asked about criminal history much later in the process -- in some departments after several rounds of interviews. "Nothing will change with our criminal background checking process," said Cheryl Brown, the city's human resources director. "We haven't in any way lowered the standards by removing any of those steps. The only thing that we've made a significant change with is the removal of the question." Last year, city council members voted to have the council's economic development committee review the city's application process and decided to leave the decision on whether to remove this question to city manager Ron Carlee. Brown says she expects the number of applications for city jobs to increase as a result of Carlee's decision. Currently about eight to ten percent of the approximately 6,800 city employees have been convicted of crimes greater than minor traffic violations.  

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‘Ban the Box’ Moves Forward in Louisville Despite Fischer Administration's Objections

A Louisville Metro Council committee has approved a measure prohibiting the city and its private contractors from asking about an applicant's criminal history until the job is offered. But members of Democratic Mayor Greg Fischer's administration joined council Republicans to voice concerns about the bill and its additional burden on local businesses. Council Democrats and community activists argue the so-called "ban the box" ordinance helps even the playing field for residents who deserve a second chance and are seeking gainful employment. During the committee hearing, GOP members asked about the cost and had concerns about mandatory provisions, such as conducting a background check. The Fischer administration also raised questions about the proposal, saying city vendors already frustrated by the application process don't look forward to having another burden. Officials with the Fischer administration argue the city already has a similar screening process where they conduct background checks after agencies interview and identify job applicants they'd like to hire. But council Democrats pushing the bill say the policy isn't codified and should be required to protect potential employees against discrimination.

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Bill Mandates Background, Credit Checks for Health Site Navigators in Kansas

A bill requiring background and credit checks for the navigators who help people sign up for health coverage under the Affordable Care Act won initial approval in the Kansas Senate. Republican supporters say Senate Bill 362 would ensure that consumers can trust the people with whom they are share sensitive health information. But Democrats say the bill is a politically motivated attack on the health care act and would make it more difficult to sign up Kansans for coverage. “The federal government ignored protection of the consumer and left them open to serious risks of fraud and identity theft,” said Sen. Mary Pilcher-Cook, R-Shawnee, who carried the legislation. She cited an October report from the conservative news site the Daily Caller that a navigator in Lawrence had an outstanding arrest warrant. But Sen. Laura Kelly, D-Topeka, said that if the bill’s intent was solely to protect consumers, it would merely require a background check and not a credit check, which she said is invasive. The bill also requires navigators to pay an application fee of $100 and an annual filing fee of $250. Kelly said these provisions are meant to discourage people from becoming navigators.

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Rhode Island Bill Expands Background Checks for Third-party School Employees

Scott Sanford worked closely enough with East Greenwich schoolchildren to give them treats on the school bus. But the friendly bus monitor was not a “school employee.” This meant he was not legally required to pass a national criminal background check before he started working with East Greenwich schoolchildren, including the son of a state lawmaker. Sanford’s employment with a third-party contractor drew attention in November when the 35-year-old town resident was arrested by state police on child pornography charges. The father of the 11-year-old boy who rode on the bus with Sanford, testified before state lawmakers in a bid to expand the state law on criminal background checks. “What this bill does is it simply tightens up the existing law that we have,” Rep. Antonio Giarrusso, R-East Greenwich, told the House Committee on Health Education and Welfare. The bill adds employees of third-party vendors and contract employees who work at schools to the list of individuals who must pass a national criminal background check under state law, said Special Assistant Attorney General Joee M. Lindbeck. That new language and other changes would give greater protection to children, Lindbeck said.

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State Bill Would Regulate Health Care Navigators

Arizona has joined several other states considering measures that would require extra licensing and background checks for health exchange navigators who help people buy coverage. The state House approved a bill that would require navigators to get a license through the state Department of Insurance and to pass a criminal background check. Proponents say the requirements protect consumers who share private information such as Social Security numbers from identity theft. But Democrats say the bill is an attempt to slow down enrollment and that it’s unnecessary because navigators already have contracts with the federal government. "What we're doing here is we're just handling the background checks and licensing to make sure we're protecting our consumers," Arizona Rep. Paul Boyer, R-Phoenix, said. Debbie McCune Davis, D-Phoenix, said Arizona gave up its right to license navigators when it failed to adopt its own state insurance exchange program. She said the Centers for Medicare & Medicaid Services has already established guidelines that regulate navigators, and that a judge struck down a similar law in Missouri. The Arizona bill would not impose a fee or extra training but it would bar anyone convicted of a misdemeanor involving fraud or dishonesty from becoming a navigator.

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Two Data Brokers Settle FTC Charges That They Sold Consumer Data Without Complying With Protections Required Under the FCRA

Two data brokers have agreed to settle FTC charges that they violated the FCRA by providing reports about consumers to users such as prospective employers and landlords without taking reasonable steps to make sure that they were accurate, or without making sure their users had a permissible reason to have them. The two companies – Instant Checkmate, Inc., and InfoTrack Information Services – have agreed to pay civil penalties and will be prohibited from continuing their alleged illegal practices. According to the FTC’s complaints, both companies operated as consumer reporting agencies under the law but failed to abide by the FCRA. The FTC charged, among other things, that in many instances InfoTrack provided inaccurate information suggesting that job applicants potentially were registered sex offenders, possibly causing employers to reject their job application. According to the complaint against Instant Checkmate, the company failed to require that users of its reports identify themselves or certify the purpose for which they were seeking consumers’ information. “Consumers shouldn’t have to worry that they’ll be turned down for a job or an apartment because of false information in a consumer report,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.

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Beyond Credit Reporting: The Extension of Potential Class Action Liability to Employers under the Fair Credit Reporting Act

The provisions of FCRA apply to any business entity that seeks to use a “consumer report” – which broadly includes anything from a credit report to a criminal or even motor vehicle background check – for any “employment purposes.” The consequences of a FCRA violation can be substantial; the statute provides for a civil private right of action and permits recovery of actual damages, statutory damages, punitive damages, and attorneys’ fees and costs. As with many federal consumer protection statutes, the stakes are even higher in a putative class action. This risk includes potential class liability for damages, which could include up to $1,000 in statutory damages per class member for “willful” violations, in addition to potential punitive damages. And, unlike other federal consumer protection statutes, there is no cap on the recovery of statutory damages in a FCRA class action. Not surprisingly, there has been an increase in the number of FCRA putative class actions filed against employers for their purported use of consumer reports. For these reasons, any business entity that collects background information for prospective or current employees must be aware of the requirements of FCRA and should design its employment practices in compliance with those requirements.

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FCRA Class Action USB Financial Services

This is a consumer class action based upon Defendant UBS Financial Services, Inc.’s (UBS) violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (FCRA). UBS systematically violates at least two sections of the FCRA: section 1681b(b)(2), by procuring consumer reports about current or prospective employees and deceptively embedding improper release language, as well as other extraneous language, in the consumer consent and disclosure document that UBS requires prospective and current employees to sign prior to ordering a background check; and, section 1681b(b)(3), by using employment background checks to make adverse employment decisions without providing the consumer job applicants who are the subjects of the background checks a copy of the report used, along with a summary of his or her rights under the FCRA, and a sufficient amount of time to contest and/or correct any errors in the reports before the adverse action is taken. The Plaintiff in this case seeks relief against the Defendant including: That judgment be entered against the Defendant for statutory damages in the amount of not less than $100 and not more than $1,000 per violation per Class member; That judgment be entered against the Defendant for punitive damages, etc.

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Joining Other States and Localities, Indianapolis “Bans the Box” for City Vendors and Further Restricts Criminal Background Inquiries

Mayor Gregory A. Ballard recently signed an ordinance that generally prohibits the Consolidated City of Indianapolis and Marion County (hereinafter, “City”) and its vendors from inquiring into an applicant’s criminal history until after the applicant’s first interview. In addition to “banning the box,” the Ordinance further restricts the types of arrest and conviction records the City or its vendors may ask about or otherwise consider following the first interview. The Ordinance joins an ever-growing patchwork of laws that curbs inquiries into or the use of an applicant and/or employee’s criminal history in employment decisions. Indeed, approximately 10 states and 50 localities have “banned the box” and, although many of these laws only apply to public employers, several local ordinances cover government contractors. And, many more jurisdictions have imposed other limitations on criminal background checks for private and public employers, as well as for city vendors. When vendors violate the Ordinance, the City may deny awards of contracts. Vendors also may incur a fine of no more than $2,500 for a first violation and $7,500 for a second or subsequent violation. Unless otherwise exempted, vendors should refrain from asking questions relating to arrests and/or convictions until after the applicant’s first interview. 

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Sixth Circuit Affirms Dismissal of EEOC Credit Check Case and Rejects “Homemade” Method of Determining Race by “Eye-Balling” Photos

The Sixth Circuit affirmed a lower court order granting summary judgment in favor of Kaplan in a high-profile credit check lawsuit that the EEOC brought against the education company. The EEOC alleged that Kaplan’s use of credit checks causes it to screen out more African-American applicants than white applicants, creating a disparate impact in violation of Title VII of the Civil Rights Act of 1964. In support of its allegations, the EEOC relied on statistical data compiled by its expert witness. The expert witness assembled a team of “race raters” and directed them to review the photos and classify them by race. Based on the results of this “race rating,” in a sample of 1,090 (out of 4,670 applicants), the percentage of black applicants who were flagged for review based upon their credit histories was higher than the percentage of white applicants who were flagged. The lower district court excluded the EEOC’s expert’s testimony as unreliable. The EEOC’s “homemade” methodology for determining race was, “crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.”

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Wisconsin Adopts Password Protection Law

Wisconsin has become the thirteenth state to enact a law limiting the circumstances under which employers may request or require access to the personal internet accounts of applicants and employees.  The 2013 Wisconsin Act 208,which amends the Wisconsin Fair Employment Act (WFEA)and will be enforced by the Department of Workforce Development (DWD), prohibits employers from “requesting or requiring” employees and applicants to provide “access information” for their “personal Internet account” or “to otherwise grant access to or allow observation of that account.” In addition to prohibiting these requests for access information and access, the new law, as a general rule, prohibits employers from discriminating or retaliating against (e.g., discharging or refusing to hire) an employee or applicant who exercises their rights under the law. While the law primarily protects the privacy of employees and applicants, it also offers employers a limited degree of protection. Because the meaning and impact of the law’s requirements and exceptions will evolve over time, employers should approach access issues with care and on a case-by-case basis. Employers should also keep in mind other risks associated with monitoring the social media activity of employees and applicants.

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Statewide Ban the Box Reducing Unfair Barriers to Employment of People With Criminal Records

Nationwide, over 50 cities and counties have now taken the critical step of removing unfair barriers to employment in their hiring policies. Widely known as “ban the box,” these initiatives remove the question on the job application about an individual’s conviction history and delay the background check inquiry until later in the hiring process. Momentum for the policy has grown exponentially, particularly in recent years. Today there are a total of ten states representing nearly every region of the country that have adopted ban-the-box policies—California (2013, 2010), Colorado (2012), Connecticut (2010), Hawaii (1998), Illinois (2013), Maryland (2013), Massachusetts (2010), Minnesota (2013, 2009), New Mexico (2010), and Rhode Island (2013). Hawaii, Massachusetts, Minnesota, and Rhode Island have banned the box for private employers, which many advocates embrace as the next step in the evolution of these policies. Federally, the EEOC has endorsed ban-the-box as a best practice in its guidance for employment decisions considering arrests and convictions. In an era of extreme mass incarceration, ban-the-box campaigns provide a platform to educate the public about the stigma of a criminal record and the real consequences to our society of depriving millions of Americans with past convictions of economic stability.

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5 Ways to Prevent Negligent Hiring Claims

With the ever-growing driver shortage looming, many motor carriers are lowering their hiring standards to fill their empty trucks. No company wants to turn down a job because they don’t have drivers to service the account. But while companies to some extent are at the mercy of supply and demand, carriers have to keep the potential for negligent hiring lawsuits top of mind. Negligent hiring is based on the principle that companies have a responsibility to protect their clients and the public from injury at the hands of their employees. Companies can be held liable for property damages, deaths and physical injuries, and other errors caused by their employees within the scope of their employment. If you don’t establish driver hiring standards, you will have a hard time defending your recruiting processes in court if they were ever challenged in a negligent hiring suit. Negligence can be alleged in all aspects of managing your employees: in hiring, retention, and when changing job responsibilities. It is important that you: Do your homework before hiring drivers; Put driver hiring policies in writing; Train drivers for success; Keep your ear to the ground; and Re-evaluate if you change the job duties.

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Fingerprints and Photos Could be Part of Background Check Record

Many jobs require background checks on applicants, including for those who would have direct contact with vulnerable adults. However, as more data on the individual is required and as technology advances, state agency policies regarding secure storage and data destruction need revision.

Rep. Tina Liebling (DFL-Rochester, pictured) sponsors HF2467 that would allow the Department of Human Services to fully automate and expand the electronic background study system, and collect fingerprints as a requirement to fill certain jobs where a person would have direct contact with a vulnerable adult. It would also provide for the length of time the information would be retained and a procedure for the subject of the background check to access it.

After hearing the bill on Tuesday, the House Civil Law Committee moved it to the House Judiciary Finance and Policy Committee.

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No Need For Businesses To Fear ‘Ban The Box’ Measure, Employment Attorney Says

Louisville has joined the ranks of cities to enact an ordinance prohibiting employers from asking job applicants about their criminal backgrounds. The bill applies only to the city and its private vendors.

According to Tom Birchfield, a managing partner at Louisville-based Fisher and Phillips LLP law firm said, “I don’t think it is that big of a deal because it says you can’t have a box on the application.”  Ban the Box supporters say the measure simply prevents businesses from summarily dismissing job applicants who admit they’ve been convicted of a crime. In most cases the city or its vendors now can’t ask about conviction history until after they have determined that applicants otherwise are qualified for positions

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South America



Brazil to Drop Local Data Storage Rule in Internet Bill

Brazil will drop a controversial provision that would have forced global Internet companies to store data on Brazilian users inside the country to shield them from U.S. spying. The rule was added last year to proposed Internet governance legislation after revelations that the U.S. National Security Agency had spied on the digital communications of Brazilians, including those of their President Dilma Rousseff and the country's biggest company Petroleo Brasileiro SA. Instead, the legislation will say that companies such as Google Inc and Facebook Inc are subject to Brazilian laws in cases involving information on Brazilians even if the data is stored abroad, said congressional relations minister Ideli Salvatti. She said the bill, which is opposed by Rousseff allies in the lower chamber of Congress, has enough support to be put to the vote. Salvatti said the government will not negotiate a key provision in the bill on net neutrality, which has faced strong opposition from telecom companies in Brazil because it would bar them from introducing differential pricing according to Internet usage and speeds. The legislation dubbed Brazil's "Internet Constitution" protects freedom of expression, safeguards privacy and sets limits to the gathering and use of metadata on Internet users.

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