Experience v. Youth

Speaking to a friend about retirement she told me that she had a few more years to go. She wanted to get her financial foundation a little sounder before making the decision. She went on to say that she recently received a retirement assessment package from her employer outlining her current and future pension options. The package was personally addressed and written as a response to her inquiry. The thing was, she hadn’t made an inquiry. As time went by she heard from other employees similar to her age and seniority who had also received their “requested” retirement materials. When it came to hiring and promotions of late there appeared to be a bias towards younger people. Was the company sending a message with the retirement package mailings?

It is not unheard of. Some corporations feel older employees are more expensive due to their salary and benefits. Younger, newer hires do cost companies less money. They can be hired for a substantially less salary and are willing to accept it. Many companies are eliminating pension programs, instead, offering new employees 401(k) matches and other savings programs. Saving the company money in the long term. Companies embracing a youth movement are looking for new ideas from employees who are more familiar with current technology. 

Targeted “retirements”

In March 2018, ProPublica, an independent non-profit newsroom, published a report claiming that IBM systematically laid off 20,000 employees age 40 and over between 2013 and 2017. Up into the 1980s, IBM was the technology giant. As the technology rapidly changed over the next twenty years and companies like Apple challenged IBM, they were faced with a massive and aging workforce. To compete, IBM felt that they needed to reduce their workforce and begin hiring younger, more tech-savvy employees.

ProPublica’s investigation revealed, in part, that IBM devised performance point-rating systems that favored younger employees with fewer years on the job. Older employees were rated as their skills being out of date. These employees were offered retirement packages or were relocated to an office across the country with the ultimatum to move or retire.

The Older Workers Benefit Protection Act (OWBPA) was passed by Congress in 1990. The OWBPA prevents employers from discriminating in benefits based on age, firing only older workers when cutting staff, or demanding that older workers waive rights and without taking safeguards into consideration. However, the burden of proof is on the employee to show that the company let them go based solely on age. Without records, overt acts, or documentation this can be difficult for an individual employee to prove. In the IBM case, the corporation went so far as to have employees who accepted packages to sign agreements that they would not take part in any future class actions.

But what about experience? 

Is it worth pushing out experienced workers to make room for youth? Does cost cutting make up for the loss of institutional knowledge? Older employees have a lot to offer. They’ve been with the company through thick and thin. They are able to mentor younger employees in systems and procedures. Historically, older employees are dedicated to doing the best possible job and are often the ones who find and correct errors. Errors that could cost the company lots of money if overlooked. While a new set of eyes is always welcome, past experience can sometimes save hours of work that will eventually end up at the same conclusion.

Savings?

Cutting bloated salaries and benefits might sound good but the overall cost of turnover may not justify it. Jack Altman, CEO of Lattice, posted an article in the Huffington Post in January 2017, How much does employee turnover really cost? Altman cites research by the Center for American Progress who determined that the average economic cost to a company of turning over a highly skilled job is 213% of the cost of one year’s compensation for that role. He uses the following example, ”If you are a 150 person company with 11% annual turnover, and you spend $25k on per person on hiring, $10k on each of turnover and development, and lose $50k of productivity opportunity cost on average when refilling a role, then your annual cost of turnover would be about $1.57 million.”

Altman summarized by saying that companies should analyze four major areas:

·       Cost of hiring

·       Cost of onboarding and training

·       Cost of learning and development

·       Cost of time with an unfilled role

He also provided this link to Calculate the Cost of Employee Turnover for yourself. 

The quick decision to cut costs through salary and benefits should be closely examined. There are not always textbook answers to everyday issues. You need veterans of your business to lead and show the way. 

Frequently Asked Questions

During my time providing investigative services to businesses the same questions regarding pre employment screenings and background checks were repeatedly asked. To address those questions, we developed a list of frequently asked questions, which are shared below. I hope this will help answer questions you may have and guide you through the hiring process.

·      What are an employer’s legal obligations?

• Fair Credit Reporting Act (FCRA). As of October 1, 1997 the FCRA requires that all employers who request background checks for pre employment screening purposes have a written consent from the applicant. 
• Civil Rights Act of 1964, Title VII. Employers cannot reject or fire qualified individuals who have criminal records when the criminal history has no bearing on the individual’s fitness or ability to perform the job.
•  Equal Employment Opportunity Commission (EEOC. The EEOC is clear in its position on employers’ use of criminal background checks for employee hiring and retention: “Using such records as an absolute measure to prevent an individual from being hired could limit the employment opportunities of some protected groups and thus cannot be used in this way.”
• National Labor Relations Act (NLRA) was enacted in 1935. The Act allows for the National labor Relations Board to enforce laws that give employees the right to act together for improved pay and working conditions, even if they are not part of a union. 

·      What is a “National” record check?

• We were always asked to conduct national criminal record checks. This request is difficult to explain because most people’s perception of the criminal justice system is marred by television. Simply put, there is no “national” database that houses criminal records. Records of arrests and adjudications are kept at the local courthouses and county jurisdictions. Conducting a non-law enforcement national background check would be better said as a “nationwide” check. To obtain a thorough picture of a person’s criminal past, all levels of government entities maintaining criminal records should be searched. Read our post "National" record checks, which further explains the subject.

If there is no national database, how do you get the most detailed information?

• Look for companies that search both public and commercial databases within the Federal, State, and County jurisdictions. Analyzing the information to ensure the utmost accuracy for your screenings.

·      What is “Ban the box”?

• Ban the box is national grassroots movement to remove the question, “Have you ever been convicted of a crime” from employment applications. Many State and local jurisdictions have passed laws removing the question from government employment applications.

·      What is Bright line hiring?

•  “Bright line” is a clearly defined rule or standard, generally used in law, composed of objective factors, which leaves little or no room for varying interpretation. The purpose of a bright-line rule is to produce predictable and consistent results in its application. 
• A Bright line hiring example would be to not hire someone with a criminal record. Bright line hiring practices are dangerous for any business, as you may have violated the Civil Rights Act of 1964 or EEOC guidelines.

·      Can expunged records be located?

• Sometimes. The legal term “expunged” has different definitions in different states. Some allow for the records to be sealed and treat the case as it never happened. Some change the conviction to “dismissed”, but the other details of the case are the same. In Maryland, it means to remove from public inspection. 
• Although records are expunged, they are filed somewhere.  Third party vendors purchase data from government entities before records are expunged. They then resell that data. Although records get expunged, they remain active through third party vendors.

·      Why should I do pre employment checks?

• Avoid the expense of making a bad hire. Bad hires can cost as much as three times the salary of the job in question
•  Reduce liability: Putting current employees at risk by placing a violent person in the workplace.
• Find those with a propensity for violence. Workplace violence has been found to make up 18% of all crime.
•  Reduce of workplace accidents
•  Reduce resume puffing. One-third of resumes have some degree of puffery
•  Aid the applicant. During the process other names associated with the applicants’ social security number are regularly discovered. This information may help the applicant thwart identity theft.

·      Why can’t I just do checks myself?

• You can and many do. The Internet is a very powerful tool. The questions are: Do you have time? Do you know where to look? Do you know how to decipher the information you do find? Are you sure you are looking at the correct person?

See our blog archive and topic categories for more on this topic.

How well do you know someone? March 2017

Social Media Checks July 2016

FCRwhat? March 2015

Just checking local Internet records not enough December 2014

Convicted? Never convicted. October 2014

Have you ever been convicted of a crime? February 2014

What is the price of not doing a background check July 2013

"National" record checks April 2013

Ban the box

A good interview

The interview is a major part of the hiring process. In addition to being encouraged by the EEOC, it gives the employer a chance to get a feel for the applicant’s character and a chance for the applicant to be forthright about their resume and anything in their past that may pertain to the job for which they are applying.  If there is a discrepancy, than a chance to elaborate.

We have clients that are not surprised by the findings of screenings, because they have conducted thorough interviews and learned of past indiscretions prior to conducting a screening. Sometimes though the applicant downplays, tries to hides, or refutes an incident. That is when a more detailed examination of the facts needs to takes place. 

Criminal record findings are based on the personal data supplied by the client. The results are not verification of the record. Once the person is identified with the record the original court records should be retrieved for actual verification.  Life is not as television would have us believe. There is not a single repository for criminal records. Records are not always found in the employers home State. To locate any and all records, queries should be made Federal, State, and even local courts.  ("National" record checks)

Here are some examples of how criminal records work with a good interview. Why are these special? It’s what they didn’t and did tell their prospective employers that makes the point. All were interviewed prior to the request for a pre employment screening. Some were forthright and explained past indiscretions. Others rolled the dice. 

• Fully aware and consenting to a pre employment screening, the applicant admitted to being arrested for possession of marijuana during college, a lesser offense. When the results returned multiple counts of more serious offenses, the applicant continued to deny the convictions. State (Not Maryland) and county record searches revealed more serious charges, but experience tells us that sometimes the charges read more serious than the actual event. Further research of local court records revealed that the charges were accurate. The applicant was arrested and convicted of selling drugs to an undercover detective. A little more than mere possession.
• The applicant said nothing of past criminal activity. Searches revealed multiple felony drug arrests and convictions. However, FCRA guidelines prohibit the use of criminal records more than seven years old in consumer reports. The deal breaker on this one was not the criminal record but truthfulness and character. The applicant arrived at the interview with an apparent injury saying that he was currently on medical leave, expected to return. During employment verification it was learned from the employer that the applicant was fired weeks before for skimming money.
• Maryland and out of State searches revealed no records for the applicant. However, our routine searches of the Federal court system revealed past arrests. Again, FCRA regulations prohibited the reporting of the records. When the report was provided the client said that the applicant had admitted to the past federal charges during the interview process. The client wasn’t worried about the long ago indiscretions, but was more impressed with the applicant’s honesty and character.

The Equal Employment Opportunity Commission suggests that the report be presented to the applicant and the applicant allowed a chance to address the findings of the report. Before a decision of hiring is made. Allowing the applicant to talk about themselves can yield a wealth of information about the prospective employee. Allowing them a chance to honestly represent their past or defend the findings can yield much more.

Mazzella Investigative Solutions-Services

FCRwhat?

Most of our small business clients have never conducted pre employment screenings. As the economy has tightened the need to hire the best suited candidate has become more of a focus (The cost of a bad hire can be upwards of $50,000). So smaller employers have sought to conduct pre employment screenings to give them more information about their candidates. They know the hiring basics (formal employment applications, conduct interviews, etc) but rarely have they delved into an applicants’ character and past. When they do, most have fallen into stereotypical hiring process traps that put them in jeopardy of a court visit. Last year alone there were millions of dollars awarded in class action suits for Fair Credit Report Act (FCRA) violations.

Some common mistakes employers make are:

• Failure to have a disclosure of the screening separate from the application
• Burying the disclosure of the screening with application questions
• Failure to provide proper pre-adverse action and/or adverse action notices
• Failure to include a copy of the report or a Summary of Rights with the pre-adverse notice

Small business owners don’t have the benefits of human resource departments. They have either just started a business or have been in business for many years. Whichever the case, the Fair Credit Reporting Act and guidelines set by the Equal Employment Opportunity Commission are news to them. They are not intentionally trying to violate the rights of potential employees; they just don’t know the rules.

Fair Credit Reporting Act 

The Fair Credit Reporting Act  (FCRA) was passed by Congress in 1996 and went into effect September 30, 1997. As the Act is titled, it was initially passed to regulate the collection and use of credit information by credit bureaus. The goal being to provide consumers a way to access information contained in their credit bureau files. Due to the ever growing amount of incorrect information contained in these files, the act also provided a mechanism in which consumers could dispute the records. Basically, it is designed to protect the privacy of consumers and to guarantee that the information supplied by reporting agencies is as accurate as possible.

The FCRA has been amended several times since being passed. With negligent hiring and privacy issue complaints increasing since the passage of the Act, the FCRA was amended to apply to all consumer type reports. Too include the pre employment screenings completed during the hiring process. A consumer report (the information collected during the pre employment screening}, contains information about the applicant’s personal and credit characteristics, character, general reputation, and lifestyle.

The FCRA also provides procedures for obtaining consumer information and how it is to be used and disseminated during a pre employment screening. The Federal Trade Commission enforces all aspects of the FCRA.

Equal Employment Opportunity Commission

The FCRA regulates how consumer report data is collected and used. Part of that data are criminal records. The Equal Employment Opportunity Commission (EEOC) ensures that the information found in the criminal records collected during the pre employment screening is not used to discriminate against the prospective employee. This is where the employers’ fall victim-How they react to and use the criminal record data.

The Civil Rights Act of 1964, Title VII, states that employers cannot reject or fire qualified individuals who have criminal records when the criminal history has no bearing on the individual’s fitness or ability to perform the job. The EEOC is quite clear in its position on employers’ use of criminal background checks for employee hiring and retention: “Using such records as an absolute measure to prevent an individual from being hired could limit the employment opportunities of some protected groups and thus cannot be used in this way.” In making a decision, the employer must consider the nature of the job, the nature and seriousness of the offense, and the length of time since it occurred.

The FCRA states that the applicant has a right to view the information contained in the consumer report and have a chance to dispute the record.  Following this lead, the EEOC encourages the employer to personally interview the applicant and allow them the chance to refute and/or explain the criminal record.

It’s all about being fair. The employer wants to make the right decision to avoid later costs and problems. The applicant is seeking employment. As with the decisions made in other areas of the business, the employer needs to make informed decisions by reviewing and understanding all of the information gathered during the screening process. This review process should include a personal interview so the employer has the chance to hear the rest of the story.

Scroll through our Information and Resources page regarding the FCRA, EEOC, and for helpful information.

Just checking local Internet records is not enough

Service industries that put employees in personal/private contact with clients and/or a client's property are being scrutinized for not only failing to conduct background checks but for doing them improperly. Most recently a national ride sharing company received criticism for both. At first, the company was not screening its drivers, which resulted in employing drivers with violent criminal pasts and questionable driving records. They upgraded their screening process, however, the background investigations were not thorough. Checks were only being made for in State violations with no verification of the person’s identity or the records.

This is just one example of a service industry company not ensuring they have a proper screening process. With Internet access to almost anything, most small employers try to do the background screenings themselves, only checking the local records for which they have access. This is not a thorough background investigation. Much can be missed. Records can exist in all States, at all levels of jurisdictions. Matching records to employees and understanding what the records mean are paramount. (What is the price of not doing a backgroundcheck? July 9, 2013)

Employers need to make sure that their vendors are checking all jurisdictions where the employee lives or has lived, backing up the findings with court records, and verifying that the record is actually that of the employee.

Don’t risk your business by taking shortcuts.

Mazzella-Investigative Solutions