What is the Fair Credit Reporting Act (FCRA)? Everything You Should Know

What is the FCRA?

First enacted in 1970, the Fair Credit Reporting Act (FCRA) is comprehensive federal legislation to regulate the collection, dissemination, and use of consumer information. This legislation is the basis of consumer rights in the U.S. and no additional comprehensive privacy legislation yet exists. For this review, we will focus on consumer reports for employment purposes.

 

What is a Consumer Report?

A consumer report is a written, oral, or other communication from a consumer reporting agency (CRA) that reflects a consumer’s creditworthiness, credit standing, credit capacity, character, or general reputation. This information is obtained by entities for eligibility for personal credit, insurance, employment, or other purposes authorized by 15 U.S.C. § 1681a(d). This report can also include criminal and civil records, driving records, civil lawsuits, reference checks, and other information.

A consumer report is much broader in scope than just a credit report or a background check. These reports shared among subsidiary and parent corporations are still protected by the FCRA legislation.

 

Roles in the FCRA Applicable to the Employee / Contractor Screening Process

Consumers – Are individuals, not corporate entities, about whom the report pertains. The individuals we background screen are considered consumers.

Consumer Reporting Agency (CRA) Any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole, or part, in the practice of assembling or evaluating consumer credit information or other information on consumers to furnish consumer reports to third parties, and which uses any means or facility of interstate commerce to prepare or furnish consumer reports. By this definition, credit bureaus, employment screeners, and tenant screeners are all CRAs. PlusOne Solutions is considered a CRA.

End User A person, or entity, that intends to make use of the information contained in a consumer report for a permissible purpose, under the Act. The employers and contracting Customers are considered End Users.

Furnisher Persons or entities who supply needed information to CRAs. Examples: Banks and other credit grantors.

 

Consumers Rights Under FCRA

Certain steps that must be followed before an entity gets a Consumer Report. Additionally, these steps apply before and after an adverse action is taken based on that report.

  1. Disclose on the nature and scope of the searches to be completed should be a single document that is “clear and conspicuous” and provided to the consumer before any consumer report being requested.
  2. Consent and authorization by consumers must be provided in writing.
  3. Maintain accuracy of reporting.
  4. Adverse Action Process, which includes A Summary of Rights and copy of their report.
  5. The process to dispute the accuracy or incompleteness of information.
  6. Provide access to copies of any report(s) or files held on them.

 

Responsibilities of CRAs, End Users, and Furnishers

Except for the consumer, who has rights under the FCRA as above, detailed below, each role has responsibilities:

  • CRAs – maintain reasonable procedures to assure “maximum possible accuracy” when reporting results per with guidelines; ensure a “permissible purpose” exists before releasing a consumer report; handle reinvestigations when consumer disputes results; make disclosures to consumers; proper disposal of information
  • End Users – ensure disclosure is made and authorization is obtained from the consumer; comply with pre-adverse/adverse requirements and provide certification to the CRA regarding the permissible purpose of the consumer report request.
  • Furnishers – must report accurate information and ensure reinvestigations are conducted in a thorough and timely manner.
Limitations on Report Contents

When CRAs are providing information in the final consumer report, there are some exclusions to be considered. For example, convictions can be reported indefinitely while arrest records and other adverse information (for example, negative credit data, collections, civil judgments) may be limited to seven years only. If an employee is reasonably expected to make more than $75,000, some of these restrictions may not apply. Positive information, which will not cause an adverse impact on the consumer, can be reported without limitation. These guidelines must be followed to ensure compliance. A CRA, such as PlusOne Solutions, must comply with these restrictions when reporting data to end users.

 

FCRA Enforcement

The Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) jointly share enforcement authority for the FCRA. The EEOC is not a player in the FCRA; however, they influence the contents of the consumer report from the perspective of Title VII and ensuring the information in a consumer report is not used in a discriminatory manner.

Since the FCRA is a federal statute, it is typically prosecuted in federal district court. Claims must be brought either within two years after the consumer learns of the violation, or five years after the violation occurs. Constructive knowledge is all that is required to start the two-year clock.

Additionally, no harm must be proven to file a lawsuit. As a result, “technical” violations of the FCRA, which do not result in an adverse action against a consumer, are now the subject of litigation.

 

Penalties and Plaintiffs

There are two groups of plaintiffs for FCRA actions – FTC/CFPB can bring enforcements and individual consumers can also bring lawsuits known as a private right of action. Adherence to these procedures is important because the FCRA provides for recovery of actual or statutory damages of $100 to $1,000 for each willful or deliberate violation of the statute, plus unlimited punitive damages. These penalties can result in significant settlement leverage for a case because the exposure for a company is potentially catastrophic.

The FCRA is a fee-shifting statute; so, prevailing plaintiffs can recover their reasonable attorney’s expenses as well. Plaintiffs have a right to a jury trial in FCRA cases; so, in most cases, the amount of damages is determined by the jury. FCRA errors are perfect fodder for one or more plaintiffs (also called class representatives) to bring a lawsuit on behalf of a group or “class” of people. Having a group of plaintiffs provides the potential for larger payouts and greater financial losses for non-compliant organizations.

Considerations Beyond the FCRA: State Regulations

The efforts to comply with the FCRA are important, but there may also be state consumer reporting requirements to consider as well. There are almost 20 states with some version, or overlap, of the FCRA rules or components of the legislation. Some of these requirements are preempted by the FCRA, but others may stand.

These state regulations include limitations on what, and how long, certain records may be reported. Additional limitations on reporting credit information, special disclosure or notice requirements, or needs such as offering free copies of reports to the consumer may exist. These laws are often quite detailed with exceptions based on positions being hired for, salary information, or job-relatedness requirements for criminal record reporting. States, municipalities, and even cities can have their versions of consumer reporting acts. While the FCRA is getting all the press these last few years, the state requirements should not be overlooked.

 

Why do our Companies and Customers Need to Know About the FCRA?

The FCRA requires organizations to follow certain procedures when using a consumer reporting agency to obtain a consumer report on current or prospective employees and contractors. When PlusOne Solutions is completing a consumer report on individuals in a contractor network for our customers, our work is regulated by the FCRA. There are obligations around the accuracy and reporting of data, ensuring appropriate disclosures are made and authorization has been obtained, confirming the purpose of the report and the reasonable purpose for obtaining the information in the report and other requirements. Working with our customers, we ensure the required steps are followed and that the consumer’s rights are upheld and respected at all steps of the process.

 

Additional Resources

 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.

 

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Anatomy of a Comprehensive Background Check

Background checks are an essential part of an organization’s employee onboarding process and contracting compliance program. If background checks are new to your organization, you may not know this key piece of information – not all background checks are created equal. Understanding the various components of a thorough background check will help you make an educated decision when choosing the right background check to fit your needs.

The information in this article will help you start down the road to selecting a background screening package while understanding the basic facts about what a background check is, why they are important, and the various searches that compose a comprehensive screen.

What is a background check?

A background check, or background screen, is a review of public record information about an individual. This information can be pulled for many reasons, with the focus of this article being for contracting or employment purposes.

The type of information included in a background check is called a “search” or “search components” and cover areas such as a criminal record search, a driving record search, basic identity confirmation, drug testing, government sanction and watch listings, or even a Sex Offender Registry search.

The screening results are then compiled into a report called a consumer report. The individual whom the background check pertains is the “consumer.” That data is then given back to the end-user who will review it and make the decision on how to proceed, which is often a decision of whether or not to hire/contract with the individual. The decision to be made is predicated on whether there may be any risks associated with working with the individual, and also to verify if the information they have provided is accurate, complete, and appropriate for the role for which they are being considered.

There is a role for everyone; however, not everyone is suitable for every role. The focus needs to be on the risk an individual may bring to an organization, its customers, consumers, and the overall network.

How are Consumer Reports Regulated?

In the U.S., the results from a background check (the consumer report), its contents, and use are regulated by the Fair Credit Reporting Act (FCRA). There is no comparable consumer reporting legislation in Canada, however many of the same principles of consent, open access, ability to dispute the information, and other accountabilities are included in privacy legislation.  There are guidelines and regulations surrounding background screening that add another layer of regulatory compliance as well. The reference to compliance at PlusOne Solutions, for example, has two meanings – one related to the ability to meet the expectations in the contract with the Customer, (“compliance program”), as well as legal and regulatory compliance requirements.

While each Customer will ultimately have their own needs when determining the search components in a background screening package, there are some general criteria that most will include. Most commonly, a background check will include a criminal record check. Based on the jurisdiction of the screening – for example, the U.S. or Canada – the options available will be reflective of the criminal system structure of that area. For this summary, we will focus on the US options only as they are more varied.

Criminal Records Can be Checked at Various Levels

Criminal records in the U.S. are available at three different levels – county, state, and federal. Criminal systems for states across the U.S. divide crimes into several different categories depending on the severity of the crime. The major categories are infractions, misdemeanors, and felonies. For background screening purposes we focus primarily on felony and misdemeanors, as infractions, or violations of a rule or ordinance, are the least serious and are and are not consistently included in criminal record searches. The information used to search these three levels of criminal records is the individual’s name, date of birth (DOB), and address history. The information that is returned when a criminal record is located may include case number, charge classification (felony/misdemeanor), charge type, disposition, disposition date, and sentencing, or other penalty information.

The county-level search is a thorough search of records held at the county-level and is the most comprehensive and popular criminal record search ordered. This is where most records for an individual will occur as there are more than 3,000 county courthouses across the U.S. The depth of these searches is typically seven years of residential address history which means that for every county where the individual has lived in the past seven years, from today’s date, a county criminal record search will be done. The county-level criminal record search is considered primary source data and is the main source of information that should be used.

The state-level criminal record search is very similar to the county-level, though it may not be available in every state. The state search is an aggregate of the details at the county-level search; however, the statewide search is typically a database search – meaning that it is reliant on information provided to it from each of the counties. This often results in information that may be incomplete, out of date, or not as accurate as the information available at the county-level. When ordered, except for New York, the statewide should be in addition to a county-level search, not instead of a county-level search. Not all counties may be included in the state repository, and there may also accuracy and completeness concerns as noted previously. The benefit of this search is that it does cover a larger geographic radius than just the individual’s jurisdiction of residence. New York is a unique situation whereby its Office of Court Administration (OCA) is the preferred source of information and covers all counties in the state as the primary source search and by law includes all those jurisdictions. As a result, county-level searches are not conducted in NY, only the NY OCA search is completed. Other states do not have this same requirement in place and therefore gaps appear in the coverage and date available in the statewide database.

The federal-level search, unlike the county and state level searches, is done through another system that is compiled by the U.S. Government including charges prosecuted under federal criminal law in federal courts. This is not a national search nor is it a search of all the county jurisdictions across the U.S. The Public Access to Court Electronic Records (PACER) criminal record system covers 94 federal jurisdictions. Most states are divided into 3 or 4 federal jurisdictions, while some other states may only belong to one federal jurisdiction. Federal searches include crimes against federal employees, crimes committed on federal land, crimes that cross state lines, and other specific categories such as tax evasion, fraud, or embezzlement. This search is often ordered in addition to the county-level search and the scope focuses at least on the current jurisdiction of residence. One note is that due to federal rules of civil procedure, these records often have very limited personal information in them which makes matching of records more difficult.

National Criminal Databases

The national criminal database search is an additional criminality-related search that is also available, though its contents are not limited to just U.S. sources. This search is done using the individual’s name and DOB against a large database of the available county and state criminal information, the state reported sex offender records as well as fugitive, Department of Corrections, U.S. and international government databases covering numerous watches and sanctions listings. Records may be updated weekly, monthly, or on another timing schedule but vary from search to search. Since these records are from databases, the accuracy, completeness, and content are not considered direct source information and any information returned should be validated. Like the statewide search, the key benefit of the national database search is that it expands the scope of records beyond just the individual’s residential history. The other watches and sanction listings are also helpful to understand if there are other risks to consider that may not be uncovered with a criminal record search. Oftentimes, the national database search is offered on the market for a low price. Since it is a database search, the results (if any) return quickly. However, we caution Customers against solely using this search as the concerns of incomplete and often outdated information outweigh the value.

Sex Offender Registry Searches are Recommended

Most of our Customers are using a service network that is often inside homes and on-premises with little or no supervision, which raises other risks and concerns. For that reason, one of the most important searches to conduct across a contractor service network is a Sex Offender Registry search. Unknowingly putting a sex offender in a customer’s home is among the top scenarios our Customers are trying to avoid. The existence of registration on a sex offender registry is a defensible pre-adverse condition if job relevant. While the national database search includes aggregate data submitted from most state sex offender registries, a search of the individual against the U.S. Department of Justice, National Sex Offender Public Website (NSOPW) is also recommended. If a record is located, comparisons are made against criminal records and other database searches we have completed. Sex Offender Registry searches only report the individual’s registration as a Registered Sex Offender and may not contain the actual criminal conviction(s) which resulted in their inclusion on the registry. For that reason, we also recommend running records at the county jurisdiction when a sex offender registry is identified.

Identity Searches Verify You are Screening the Correct Person

Since each search is reliant on starting with accurate identifiers – name, DOB, and address – every background screening should include an identity search. This is a search of the demographics an individual provides against databases that may include credit bureau header information, USPS address forwarding, utility bill records, voter registration data, licensing and registration data, and various aggregate sources. Search results may return additional names, residential address history, and other reported dates of births associated with the subject. This will also confirm when and where the SSN was issued, that the SSN does not belong to a deceased person or was not issued before the DOB of the subject. Developed names, alternate DOBs, and addresses may be identified and used to identify other court systems to search.

PlusOne Solutions goes to great lengths to verify the identifiers that a background report is based on because if there is an error with that data, the rest of the report is also questionable. We use various sources to verify and validate all names – given, alias, and developed from other searches. DOB is a common identifier that can be changed by applicants to evade the location of records. Verifying that the day and month, as well as year, are accurate further reduces the chances of missing records and information and/or assuming the background of another individual with a similar name.

Driving Record Searches Provide Valuable Information

When the individual will be required to drive for the role they will be holding, whether their own or a company vehicle, a Motor Vehicle Record (MVR) search, as it is typically called, may also provide additional information. As well as providing driving history information, the MVR search is also very helpful as an identity tool. Since the MVR is issued by a government authority, it is often a reliable source of an individual’s proper and complete legal name. The record information also includes address, DOB, and other demographic information that can be used to cross-reference it to other data in the file. Depending on the customer PlusOne Solutions is working with, the driving specifics may or may not be of relevance. Some Customers want only to verify that an active license is in place while others may have a greater interest in reviewing driving infractions, incidents, and other related information.

In-Depth Comprehensive Background Checks Should Utilize Multiple Searches

Every search included in a background search serves a different purpose and provides different values. The approach we take at PlusOne Solutions is to consider the combination of searches to ensure the most useful and thorough search to protect our Customer’s network. This may include conducting two different sex offender checks, using national criminal database and county criminal records to improve the likelihood of locating records, and thoroughly investigating any discrepancies in identifying information used to conduct the searches.

There is never a guarantee that all records and negative information on an individual will be found, but a strong Contractor Compliance Program and demonstration of due diligence is a solid way to mitigate risk. A program will also not guarantee issues will not occur in the future but if an individual knows about the requirements, they are more likely to meet and respect them. Working with service networks already keeps Customers at least one step away from the individual doing the work on their behalf. Using the available public record information, and proper consent, to conduct a background check is one way to demonstrate diligence.

 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel concerning their obligations and use of PlusOne Solutions services.

 

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To learn more about PlusOne Solutions or to discuss your screening program please call us at 877-943-0100 or fill out our contact form and someone from our team will reach out to you.



Marijuana Legalization and Drug Testing Your Contractor Network

Summary: Marijuana is becoming more popular across the US and its legalization is a trend that will only continue. Currently, it is still possible to drug test in all states although marijuana is considered a banned substance at the federal level. Marijuana is part of a panel included in all current PlusOne Solutions drug tests but testing positive is not an automatic barrier to participation in a service network. We work with the individual to ensure proper documentation to support legal marijuana use and focus on the safety risk associated with its overuse. This is an evolving topic and we will continue to monitor and respond to changes in legislation.


With 33 states having legalized medical marijuana and 11 states, and the District of Columbia, also legalizing recreational marijuana, questions are arising on how this may impact contractor networks. The landscape for organizations that drug screen potential contractors and employees is changing. The original intent behind the effort to decriminalize medical marijuana use was geared to individuals with serious and debilitating medical conditions where a physician prescribes the use of marijuana for therapeutic purposes.

While states may have taken a more lenient approach to marijuana, the reality is marijuana is still illegal at the federal level. It is still categorized as a prohibited substance under Schedule I of the Controlled Substances Act (CSA), 21 USC 801, et seq. for various reasons. This inevitably puts the states in conflict with federal legislation, giving rise to the current challenge for organizations on how to handle marijuana in their organization and testing practices.


 

 

 


Drug Testing for Marijuana in a State Where it is Legalized

Regardless if marijuana is legal or illegal in your state, businesses still have the right to establish a drug-free policy to maintain a safe work environment for workers and customers. However, this can change in the future, so we recommend staying informed on the latest news.

States allow organizations to maintain safe work and drug-free environments for their workers, contractors, customers, and others. This means they can enforce a drug-free workplace policy in the face of marijuana legalization. The organization is not required to accommodate the use of medical marijuana and they are allowed policies restricting the use of medical marijuana. The message in these situations remains that the individual may use cannabis on their own time but not while at work or while working for the organization.

 

How Does Marijuana Drug Testing Work?

The basic fact to be aware of is that drug testing is legal in every state. This means that even with the legalization of marijuana, testing is still permissible and in fact, is still very important. The reason that most of our Customers include drug testing in their compliance program is to determine if someone is under the influence of drugs. It is important to distinguish under the influence from the term impairment, the latter of which tends to be a legal classification. Drug testing cannot test for impairment. Instead, it tests for the presence of drugs in an individual’s system which when detected at certain levels, may impact their work performance.

The two natural compounds in the Cannabis (marijuana) plant. When we talk about drug testing, we are focusing on the detection of tetrahydrocannabinol (THC) and cannabidiol (CBD).

  • THC is the main psychoactive compound found in the marijuana plant that gives the high, as it is often called. THC can be consumed by smoking marijuana or found in oils, edibles, tinctures, capsules, and more.
  • CBD can be extracted and generally contains less than 0.3 percent THC and is not normally detected in the drug testing process. The strength of marijuana today is more potent than it was even five years ago and there is no consistent THC level in the various marijuana products sold.

The Department of Health and Human Services (HHS) has established specific cutoff levels that define a positive result for the workplace. When a specimen result is returned as “positive”, it means that the amount of drug(s) detected in the individual is above an acceptable cutoff level. These values were developed to help eliminate false-positive results (e.g. poppy seeds causing positive opium results, “second-hand smoke” claims). Values below the cutoff levels are reported as negative, which can lead to false-negative results. These values from the HHS were established for the workplace only and vary from other commercial settings where levels may be different. A positive test does not necessarily mean that someone is under the influence at that moment, but rather that THC, the high inducing chemical in marijuana, is still in the body.

 

Considerations – Who Should be Drug Screened for Marijuana?

This is a key question to ask when determining whether drug testing is appropriate for your organization – Is there is a health and safety risk if someone is under the influence of drugs while on the job? If so, individuals who are asked to operate vehicles, use heavy equipment, work with chemicals, or handle fuels such as electricity or gas, can create a significant safety risk to themselves and others. Performing any of these activities, or entering private homes and businesses, while under the influence creates a significant risk to the entire supply chain. When the presence of drugs would interfere with the individual’s ability to take adequate care in carrying out the job duties or pose an immediate risk of death or serious harm to themselves or another, the health and safety threshold has been met.

A drug test will screen for drugs currently in a person’s system at a level that would impair judgment and therefore possibly create a safety-related risk. Testing is not a commentary on someone’s activities outside of work but rather a means to ensure they are acting safely and responsibly while working. Driving while under the influence of alcohol, marijuana or any other controlled substance like a prescription could pose a significant safety risk not only to the individual but also to others around them.

 

How Should You Handle Positive Drug Test Results?

Every organization continues to have the right to test for marijuana and maintain a company policy outlining prohibited behaviors in the workplace. They also have the right to determine how, when, and what they test for as well as the consequences for policy violations. The position about whether an individual can have or use marijuana in the workplace should be clear. It should also be clear if the detection of any amount is a violation of policy.

The PlusOne Solutions operating procedure for Customers continues to enforce a strict, no-tolerance policy, meaning that any result over the acceptable cutoff levels must be substantiated. A written prescription, presentation of marijuana card, or other official documentation is requested when an individual tests positive for one of the controlled substances in a drug test. This is done to determine the individual is a legally authorized or registered user of marijuana. If such documentation can be provided, the individual is deemed to have met the compliance requirements. If documentation cannot be provided, they will be considered not authorized to work in the Customer’s network. This allows for the same reasonable accommodation requirements as those afforded individuals who may have other prescription drugs.

Some states are putting in protections for reasonable accommodations for medical marijuana users. By following the approach outlined above, PlusOne Solutions remains in compliance with those requirements and works to ensure Customers do not discriminate against an individual simply for being a medical marijuana user. These protections are evolving, and Customers are encouraged to monitor these changes as well.

 

Recommended Position

Any organization should carefully consider its position for drug testing in the workplace and ensure there is a valid permissible purpose for conducting testing, such as safety issues or other risks. Ensure that written job descriptions are accurate concerning the essential duties of the job and whether they are safety-sensitive and whether medical marijuana use can potentially be accommodated in the position.

Some considerations include the specific responsibilities of the role the individual will hold, whether the individual is operating a vehicle or heavy machine, and whether they will be working in private homes. These situations are all legitimate and justifiable reasons to have a drug testing policy in place.

Since marijuana is still illegal under federal law, most organizations have not changed their policies to accommodate these new state laws. While many states have either accepted marijuana for medical or recreational purposes, the tendency for most of our Customers is to defer to the federal level definition.

NOTE: The Department of Transportation’s Drug and Alcohol testing regulation – 49 CFR Part 40 – does not authorize the use of Schedule I drugs, including marijuana, for any reason.

 

Looking Ahead – How Will Marijuana Drug Testing Change in the Future?

There will likely be more recreational marijuana drug bills introduced, and possibly passed. Interested parties will continue to advocate for the federal legalization of both medicinal and recreational marijuana, although it is unlikely this will become law any time soon.

We will continue to monitor these activities and keep our customers updated.

 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel concerning their obligations and use of PlusOne Solutions services.


 

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To learn more about PlusOne Solutions or to discuss your contractor screening program please call us at 877-943-0100 or fill out our contact form and someone from our team will reach out to you.



Quarterly Compliance Update, Q2 2020

Maintaining compliance during the pandemic, updated regulations for joint employment, and in-home contractor screening legislation are all included in this compliance update.

Each quarter, PlusOne Solutions provides a compliance update to keep you abreast of changes and updates in legal developments as well as company news. This information is provided for education only and does not constitute legal advice.

Maintaining Compliance During COVID-19

While the entire industry has joined this wild ride, we continue to work with Customers to ensure their levels of compliance remain strong. This means that for any individual that needs to be rescreened, we are encouraging those screenings are submitted to ensure continued compliance with program requirements. As long as screenings applications are submitted before the expiration date, the individual will continue to report in compliance. This means that even though we have seen some delays with court closures, the authorization status can remain in place if the submission is made. Most drug labs have remained open and are conducting drug testing services. If hours are varied, or locations are closed, this information is contained in our scheduling system. For unique situations, we are working with Customers to locate labs that are open for testing and extending the testing timeline if needed.

Joint Employment Final Rule

The US Department of Labor – Wage and Hour Division – updated its regulations for the first time in almost sixty years and under the Fair Labor Standards Act (FLSA), there is now definitive guidance on how to determine joint employer status under the Act. This final rule came into effect on March 16, 2020.

The new federal rule narrows the requirements for what is considered a joint employer. The specific scenario applicable to our Customers is when an individual performs work for their employer (for example Servicing Company) that simultaneously benefits another individual or entity (for example, our Customer). Under the new rule, if the organization is not part of the day-to-day decisions of their contractors, they are not considered a joint employer.

A key differentiator in this final rule is the control over work conditions to determine whether it is a right to control or actual control that is being exercised. The following four-factor test outlines considerations about who:

  • Hires and fires employees
  • Supervises and controls work schedules or conditions of employment
  • Determines rate and methods of payment including wages, benefits and hours of work
  • Maintains employment records

The strength of contractor relationships is important to the success of the overall economic model. As always, each case will have its own facts however the need for significant control over the terms and conditions of the individual’s work needs to be evident for a joint employment relationship to exist.

Reviewing contract language and how the relationship between parties is structured can further reduce any liability for wage and hour issues. It is also important for each participant in the relationship to understand their role, restrictions that may be required and how they work together to ensure compliance with the structure of the relationship. PlusOne welcomes this new final rule and looks forward to the future for our Customers and their contractor networks to thrive under this new interpretation.

Update – In-home Contractor Screening Legislation Dies in Subcommittee

In January 2020, the Florida House of Representatives introduced HB-1129 to address the in-home services issue where the background screening of a sub-contractor of a contractor to the retailer was the focus. This legislation was designed to improve the safety and comfort of individuals accepting delivery in their homes.

On March 14, 2020 it was indefinitely postponed and withdrawn from consideration. It will need to be reintroduced by a sponsor in order to move forward. That action is expected but no further specifics are available at this time.

 


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Tips for Speeding Up a Background Screening

You need individuals onboarded right away and want to remove any delays from the process you can.  Clearing the individual through a background check is the last step …. Now you’re asking, “Is there anything I can do to help speed up the background check process?”

Actually, yes.

The first step is understanding that not all background checks are created equal. Doing things properly takes time and the screening packages most of our Customers use are thorough and contain various searches. While automated database checks may return a near-instant, they set companies up for increased risk and liability due to the fact they are often incomplete, out of date, and may not contain full all the required information.

Most comprehensive background checks, like those conducted by PlusOne Solutions, take one to four days to process, depending on the specific searches being performed, the resources being accessed, the jurisdictions included and whether records are located that may necessitate extra diligence.

Fortunately, you have some control and can trim time off the background screening process with a few of these tips.

  • Double-check to ensure all demographic data is entered accurately and completely on the Screening Request.

Is the applicant’s full legal name misspelled or missing? Are all legal names included? Have any digits of the Social Security Number or Date of Birth been transposed? Is the current zip code and address included? Data entry errors, however small, can negatively affect overall turnaround time, accuracy, and quality of the results. Discrepancies with the information may slow the process as PlusOne Solutions seeks to clarify differences and using incorrect or incomplete information may require a revised background screen to be submitted, which also adds unnecessary time to the process.

  • Include the applicant’s middle name as well as any alias or maiden names.

Did you know that searches at the county level are based on name and date of birth, but not the social security number? It’s true!  Including an applicant’s middle name(s) can help narrow down the results of the search more quickly and ensure the accuracy of the information returned. PlusOne Solutions will also search with alias and maiden names to ensure thorough research into an individual’s background. Including all these names improves the overall result. The middle name is becoming increasingly important to help determine if a record belongs to an individual, especially when they have a common name.

  • Complete any required criminal, driving, identification, or other forms required for processing.

Depending on the jurisdictions where the individual has resided, PlusOne Solutions may need unique consent or information to complete the screening. This is usually due to state-level legislation however we do also have a Canadian Identification (CAID) process and Helper process that may create requirements for a Customer before a screening result can be considered complete. These forms are typically emailed and requested at order submission but the PlusOne Solutions team may also follow up by email or telephone during the process to ensure these forms are provided.

  • Provide supporting documentation when requested.

Once a file is started, PlusOne Solutions may uncover information that needs further investigation, and you, or the individual may be requested to provide supplemental documentation, such as a Driver’s License or Social Security card. This may be done because information could not initially be verified, we may need to order additional searches, it may be used to help positively identify an individual’s or determine if their identifiers match a record. The screening process is often put on hold until this documentation is returned so if requested, be sure to forward these documents in a timely fashion!

  • Understand and follow the Pre-Adverse Action Process – and encourage your individual to as well.

As screening results come back and adverse information is uncovered, the individual may be put into Pre-Adverse status. Although this language is taken from the US Fair Credit Reporting Act (FCRA) legislation, a similar process is followed in Canada. The means the screening has been completed but based on the results obtained, there is likely to be adverse action taken against them. Meaning more specifically that they do not meet the contractual requirements of the Customer’s program. Part of this process is the opportunity for them to dispute the results if they are inaccurate or incomplete. This requires the individual to contact PlusOne Solutions and file a dispute so that we may verify the information before a final decision is made. Under federal and some state laws, the requirement to ensure accurate and complete information is a right for the individual. If anything impacts the accuracy of the report, it must be further reviewed. To give the individual appropriate time, the file will remain in preadverse status for up to 11 days while a response is awaited.  The quicker an individual responds to a PreAdverse letter, the quicker the screening process can complete.

  • Use the resources available to track screening status.

Although options vary by Customer, PlusOne Solutions provides various means to ascertain the status of a background screening through our portal interface, nightly report, possible system integrations, and other tools. These are available 24/7 and allow you to track exactly where in the process a screening may be. As always, if you have an urgent or unique need, you can contact our team directly for an update.

  • Contact your screening partner with any additional requests.

Are you wondering about an ETA for screening results? Do you have questions about findings for an applicant?  Do you wish to expedite a specific screen request that has been delayed?  If so, be sure to reach out to your screening partner.

 

As always, if you have a specific screen that needs to be expedited, a background screening seems to be taking longer than normal or you have questions on the results or process, please reach out. We are happy to help!

To learn more about PlusOne Solutions or to discuss your contractor screening program please call us at 877-943-0100 or fill out our contact form and someone from our team will reach out to you.

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel concerning their obligations and use of PlusOne Solutions services.


 

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Interested in learning more about implementing a contractor compliance program? Contact us at (877) 943-0100 or send us a message using the form below.



5 Types of Risks You Can Mitigate with a Contractor Compliance Program

We are at a time in society where social media, lawsuits, and preventable errors can cripple an organization almost overnight. The ability to share information, accurately or not, at a rapid speed is unlike that of any other generation before.

For any risk-focused organization, there are at least five notable risks that can be significantly reduced with the implementation of a Contractor Compliance Program.

What is a Contractor Compliance Program?

A Contractor Compliance Program governs the extent to which a contractor is operating per the terms of their contract with a Customer.

Such a program may include background screening (with a drug test and motor vehicle report check), insurance management (tracking and monitoring), license and credential tracking, Tax Identification Number(TIN) matching, and badging. PlusOne Solutions works closely with our Customers and their contractor networks to ensure the networks are meeting those requirements, and most importantly, remaining in compliance with those requirements for an extended period.

While each program can be tailored to meet the unique needs of that organization, a comprehensive program will address the following risks:

Reputational Riskrisk that an unhappy customer, product failure, negative press, or lawsuit can adversely impact a company’s brand reputation.

As noted, social media has amplified the speed and scope of reputational risk. Just one negative tweet, poor experience, or bad review can decrease your customer following and cause revenue to plummet. While no program or contract can completely prevent issues from arising, the ability for the Customer to respond effectively to situations, demonstrate due diligence has been followed, and ensure proper programs and protocols are in place are key to limiting the extent of reputational risk.

Financial Risk risk that a company will not be able to meet its financial obligations.

These situations are likely due to the inability to meet requirements, service contracts, or put the necessary protections in place – legally – to protect the financial viability of the organization. The general retaliation for many of the risks listed here is the litigation and financial penalties that can completely drain an organization. Tight contractual language, clear requirements, and limitations on liability can all help reduce the financial exposure of an organization in the case of an unplanned event or realized risk.

Operational Riskthe prospect of loss resulting from inadequate or failed procedures, systems, or policies.

This can be the result of employee/contractor errors, poor equipment or systems failures, fraud, or other criminal activity. While background screening cannot guarantee these incidents won’t happen, being able to explain the process and protect the organization against individuals who may not be well suited to the role they will hold is a straightforward way to reduce operational risk. Verifying the appropriate licenses, certifications and even the business status of contractors are additional means to address operational risk.

Legal Riskthe risk of financial or reputational loss that can result from lack of awareness or misunderstanding of, ambiguity in, or reckless indifference to, the way law and regulation apply to a business, its relationships, processes, products, and services.

When engaging in a contractual relationship and deciding to utilize a contractor network for delivering services, the contractual structure, requirements, and expectations of that relationship need to be documented and those terms agreed to. Whether the issue is to reduce the occurrence of a wage and hourly penalty through a joint employment claim, guarding against an unlicensed contractor working at a consumer site, or not following the proper consumer reporting act requirements for background screening, there are regulations and practices that a proper Contractor Compliance Program will address. Working with a partner that can help guide you through these requirements allows you to mitigate the legal risks of a contractor network.

Competitive Riskthe chance that competitive forces will prevent you from achieving a goal.

It is often associated with the risk of declining business revenue or margins due to the actions of a competitor who may be following a more robust Contractor Compliance Program than you are. If others in your industry are maintaining higher standards, thinking more strategically, demanding compliance with certain requirements, or protecting themselves and your organization is not, you are exposing yourself to the less attractive contractors and partners that others are not allowing in their networks. The result is lower quality work, higher operational and reputational risks, and ultimately greater chances that your organization will be dealing with the outcome of a lack of a comprehensive program.

 

How does your company reduce these risks?

Operating a business inherently involves risks, that is just a reality, but being able to understand, plan for, and mitigate those risks is what will set the stronger organizations apart from their competition.

People understand that mistakes happen but what they will not understand, or forgive, is that there was no plan or effort in place to reduce the risks. We often work with our Customers and legal counsel in situations and it comes down to a simple question, “What did you do to reduce the risk(s)?” If the answer is nothing, or very little, then it is time for you to consider putting a Contractor Compliance Program in place today.

 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.


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Interested in learning more about implementing a contractor compliance program? Contact us at (877) 943-0100 or send us a message using the form below.



Certificate Holder vs. Additional Insured – Understanding Certificates of Insurance

Financial risk arising from unplanned accidents is a common occurrence in the world today.

In order to mitigate these risks and safeguard your business, a liability insurance policy is an important investment. Having a Commercial Liability Policy (CGL) on a Certificate of Insurance helps protect against the risks when working with contractor networks.

Companies who wish to contract with an independent contractor for their services will typically stipulate within the terms and conditions of their contract certain insurance requirements, such as requiring a policyholder to list them as an additional insured to their policy, to mitigate their risks in the event of a negligent incident committed by the independent contractor that has a financial impact (i.e. causes injury to a third party/customer or property damage) and a claim needs to be created against the contracted company’s (policyholder) general liability policy.

When going to verify proof of additional insured, it is common for people to confuse what would be considered a certificate holder rather than an additional insured on a certificate of insurance. Knowing the difference is important.

What’s the difference between the certificate holder and additional insured?

 

The certificate holder named on a policy will receive a copy of the policyholder’s certificate of insurance (COI), which verifies insurance and usually contains information on the type and limits of coverage.  The entity will be listed in the CERTIFICATE HOLDER section of the COI.

Certificate holders are more likely to be notified or receive notifications in case of changes, annual renewal, or cancellation of the policy by the policyholder.  However, they are not authorized to make a claim under the policy.

The entity that does have the rights and authorization to make a claim is the additional insured.  On COI’s, additional insured entities are indicated in these two ways:  By an X or checkmark in the ADDL INSR box on the General Liability section of the COI and/or the additional insured entity is named in the DESCRIPTION OF OPERATIONS section.

As an additional insured, you may receive notices that coverage has been cancelled from the insurance carrier. However, you are more likely to receive notices of cancellation and changes in coverage from the insurance broker if you are a certificate holder as well.

Additional Insured vs. Certificate Holder infographic

 

 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.


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Interested in learning more about managing your certificates of insurance? Contact us at (877) 943-0100 or send us a message using the form below.



Why Managing Compliance for Your Contractor Network is NOT Joint Employment

Contracting is often considered the backbone of America’s economic success.

Engagement of contractors allows organizations to create better focus, increase efficiencies, lower costs, and expand product support and innovation while skilled individuals open their small businesses. Organizations then focus on core offerings while allowing others to provide important, and often demanded, support services for those core offerings.

Even with the known benefits of the contracting arrangement, one of the main concerns has always been the possible existence of a co-employment, or joint employment, relationship. Joint employment is the sharing of control and supervision of an employee’s activity among two or more business entities. The implications of a joint employer classification increase the risk and liability for both parties, which is a topic that has always been a little unclear, at best. Getting this wrong could be costly, creating situations where an organization may be obligated for tax, wage, and other benefit requirements.

In early 2020 the definition and test for determining joint employment came into focus when the US Department of Labor – Wage and Hour Division – updated its regulations for the first time in almost 60 years. Under the Fair Labor Standards Act (FLSA), there is now more helpful and definitive guidance on how to determine joint employer status under the Act. This final rule became effective on March 16, 2020.

The new federal rule has narrowed the requirements for what is considered a joint employer and provides a better structure for our Customers to follow when setting up their contractor network. The specific scenario our Customer contemplate is when an individual performs work for their employer that simultaneously benefits another individual or entity. Under the new rule, and stated simply, if the organization is not part of the day-to-day decisions of their contractors, they are not considered a joint employer.

Organizations should use a four-factor test for determining whether liability exists and if they qualify as a joint employer.

These considerations include who:

  • Hires and fires employees
  • Supervises and controls work schedules or conditions of employment
  • Determines rate and methods of payment including wages, benefits and hours of work
  • Maintains employment records

A key differentiator in this final rule is the control over work conditions to determine whether it is a right, or perceived right, of control or actual control that is being exercised.

The strength of contractor relationships is important to the success of the overall contracting model but now does not carry the same concern it once did when supporting a contractor network, or setting compliance requirements, would be construed as exercising control. This opens opportunities in the contractor relationship for help and guidance.

Some examples include the sharing of handbooks, providing training and guidance documents, participation in an apprenticeship program, investment in equipment, upholding brand agreements, quality control measures, or even requiring certain policies and health prevention programs to be in place.

As always, each case will have its specific facts to be considered however the need for significant control over the terms and conditions of the individual’s work needs to be evident for a joint employment relationship to exist.

Reviewing contract language and how the relationship between parties is structured can further reduce any liability for wage and hour issues. It is also important for each participant in the relationship to understand their role, restrictions that may be required, and how they work together to ensure compliance with the structure of the relationship.

PlusOne Solutions’ role in delivering Customer compliance programs has always been very clear that screening and requirements are for determining participation for contract purposes only. The actual employment decision for any individual always remains the decision of the service provider, agent, or contracting company. Our program does not direct a contractor to hire specific workers, as that would put us offside of the joint employer determination. PlusOne Solutions welcomes this new final rule and looks forward to the future for our Customers and their contractor networks to thrive under this new interpretation.

 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.


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Interested in learning more about our compliance services? Contact us at (877) 943-0100 or send us a message using the form below.



6 Ways Our Screening Program Meets In-Home Service Industry Needs

With decades of experience in the contractor screening space, our founders knew when they started PlusOne Solutions in 2005 they needed to launch a solution that met the unique demands of the service industry. The traditional employment screening practices at the time would not work for contractor networks or service companies, so PlusOne Solutions created a fresh approach.

With the in-home service industry, independent contractors often worked for numerous companies in their local area. This meant they were subjected to various and multiple background screening processes. Some of these were comprehensive, but others were merely done to check a box. None of them were designed to keep the contracted customer at the forefront of risk mitigation.

With a focused effort, PlusOne Solutions created a process for treating the individual of the background screening with respect while considering the specific work they would be contracted to do when evaluating their screening results. This led to successfully balancing risk mitigation with compliance and the proper treatment of contracted servicers.

The PlusOne Solutions Contractor Background Screening Program was the first to address many unique service industry issues, such as:

 

Problem 1: Repeated and Inconsistent Screening Efforts

Contractors were paying for multiple background screening programs through various vendors based on whom their customers were using. This process was redundant, cumbersome and costly.

Solution 1: Shareability

One background check done through PlusOne Solutions can be accepted across multiple customers so a single purchase of a background screen can be used among our customers who an individual is contracted to work for. This lowered the cost of the background screen for each individual contractor, provided a streamlined screening process and improved acceptance of background screening across the industry.

 

Problem 2: Inconsistent Criteria

There were too many different background screening packages required across the service industry and there was no consistency in the components or search criteria. This created multiple requirements for individuals to be screened against, some of which were lacking true diligence, and caused confusion, frustration, and additional fees.

Solution 2: Standardized Package

A comprehensive, thorough and affordable background screening package that set the standard requirements for the industry. The detail, process, and use of the screening were better understood and used by customers as a result, thereby reducing risk and improving the credibility and caliber of the entire industry.

 

Problem 3: Unpredictable Variable Costs

The actual cost of the background check was unknown until all the screening was conducted because search fees varied from screening to screening depending on factors such as the vendor, specific package, and jurisdiction. The more counties, addresses or names searched, the higher the cost was. Contracted individuals required to complete a background check had no idea what was fair, what to expect or what was required.

Solution 3: Bundled, Predictive Pricing

A transparent bundled cost, which proactively factored in all costs including all pass-through fees such as the specific court, state, and motor vehicle reports fees, were included in the screening package. This eliminated surprise pricing for those going through the screening process and gave contractors an upfront fee they could accept to maintain consistency across all screenings.

 

Problem 4: Irrelevant Decision Matrices

Decision-makers were using irrelevant background screen information and bright-line decision matrices when considering a person for a role. For example, a felony would bar someone from consideration, yet not all felonies are equal. This approach was later determined to be in violation of the Employment Opportunity Commissions’ (EEOC) 2012 Enforcement Guidance.

Solution 4: Individualized Assessment

A set of fluid guidelines to use for in-home and on-premise contracted situations was created to better qualify and assess any previous criminal convictions and were considered based on behaviors related to the job. This also factors in whether the individual may pose a risk to the consumer, property or family as the severity of the conviction, length of time since the conviction and nature of the job were evaluated for each review of criminal records.

 

Problem 5: Violation of Privacy

Outdated, personal and irrelevant criminal record information about an individual was being shared prematurely with the individual’s employer through the consumer (background screening) report. In many cases, the information did not create an adverse condition. Since it was not information that needed to be shared, it unnecessarily violated the privacy of the individual.

Solution 5: Pre-Adverse Process Directly with the Individual

Working with the individual directly, and within FCRA and state laws and regulations, PlusOne Solutions evaluates the background screening and keeps the information confidential by not releasing results to the Customer or individual’s employer until the pre-adverse process is completed. This ensures a confirmed record is released only after the individual is aware of what information is shared about them and they have had enough opportunity to dispute the information. While the pre-adverse and adverse process are legislated, the approach to work through this with the individual, versus sharing with the company who would work with the individual is where PlusOne’s approach differs.

 

Problem 6: No Opportunity to be Heard

Without steps in place in order to fully understand the circumstances around the findings in a background screening, decisions were made based solely on the report and no additional information from the individual.

Even when using a decision matrix, there are valid reasons for reconsideration of the impact of past criminal or driving behaviors before a final decision is made. Background screening results are on real people and life’s circumstances can never be fully understood from just a background screening report.

Solution 6: Appeal Process

A unique process was instituted to allow the individual to provide more information that may impact the results and decision from the screening. From the very beginning, PlusOne Solutions implemented an “appeal” process to gain a better understanding of the circumstances that led to the charges showing in the consumer report.

After the background screening report is provided but before a final decision is made, the individual has an opportunity to “appeal” their eligibility decision. This builds on the individualized assessment process and allows the individual to explain their story and ask for reconsideration before making a final decision. They can demonstrate their rehabilitation and suitability for the role and often give greater insight into the circumstances which gave rise to the adverse behavior.

 


 

More than 15 years after PlusOne Solutions took this approach, many of our early solutions have been adopted as industry best practices. Additionally, some of our early practices were aligned with the recommendations from the Federal Trade Commission’s July 2011 release of 40 Years of Experience with the Fair Credit Reporting Act and the Equal Employment Opportunity Commissions (EEOC) Under Title VII of the Civil Rights Act of 1964.

Although our approach to our contractor background screening program is determined, we still work with customers on a case by case basis to understand their needs and identify any gaps. PlusOne Solutions is committed to providing a comprehensive screening program that creates safer work environments for both service providers and customers.

 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.


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Interested in learning more about our compliance services? Contact us at (877) 943-0100 or send us a message using the form below.



How to Stay Safe Doing In-Home Service Work During COVID-19

To our Valued Partners,

Many of you are hard at work dispatching individuals from your company, especially if you specialize in the repair and maintenance of electrical systems, HVAC, plumbing and major appliances. We want to take a minute to say THANK YOU for everything you are doing to keep everyone home and healthy while meeting increased demand during the Coronavirus pandemic. Your team inspires us!

We do want to recognize those of you that have chosen to remain at home because you or a loved one are at risk during this time. We hope you stay healthy and thank you for your contribution to reducing the spread of the virus.

Here are some tips to keep your team safe and healthy while servicing consumers:

Before the visit

  • Have your office team screen callers in advance and delay a scheduled visit if anyone in the home is presently ill.
  • Staff a helpline by experienced personnel who provide free answers to service questions over the phone to help prevent an unnecessary service visit.
  • Add a handwashing station to service vehicles, and stock with masks, gloves, portable hand sanitizer, paper towels, and disinfectant. If these items are not available, substitute diluted Bleach in a spray bottle and rubbing alcohol.
  • Keep sick team members home until they are fully recovered.

 

During and after the visit

  • Have your staff wash or sanitize hands before, during and after the visit, and avoid touching their faces during the day.
  • Staff should limit the items taken in and out of the house and minimize contact with any surfaces other than the direct work area; touched areas should be disinfected before and after use.
  • Staff should wear a mask and gloves during the visit, if available. Not only will this help to keep them safe, but it will also reassure homeowners your company is trying to keep them safe as well.
  • It’s OK to ask the homeowner to step away during the job or keep a safe distance of at least 6 feet from your staff while they work.
  • Have staff sanitize frequently touched areas in the service vehicle as well, such as door handles, cell phone, steering wheel, and dashboard.

 

Returning home

  • Your team should remove their shoes, spray them with disinfectant if possible, and set them aside before re-entering their homes.
  • To keep others safe, they should touch as few surfaces as possible when entering the home, sanitizing any surfaces they may have touched in the process. Put clothing in the wash and take a shower immediately.
  • Once the above steps are complete, they can hug their healthy family members, snuggle their pets, and relax! Great work today!

 

 

PlusOne Solutions is here for you

As you know, our mutual customers are counting on both PlusOne Solutions and your company to stay operational during these turbulent times.

At PlusOne Solutions, your compliance is our priority, and we are happy to report the following:

  • Screening turn-around-time has been minimally impacted by the COVID-19 pandemic.
  • Our recertification process ensures an old background screen is still valid until a new screening is completed.
  • We are processing any documentation sent to us within our normal turnaround times.

Thank you again for everything you do. We appreciate you and look forward to continuing to serve you during this challenging time and please reach out should you need any assistance we are here to help.

 

Contents are provided for information purposes only and should not be construed as legal advice. Users are reminded to seek legal counsel with respect to their obligations and use of PlusOne Solutions services.


Questions or comments? We want to hear from you.