How HR Departments Could Use Blockchain Technology for Background Checks

Blockchain, a technology involving “chains” of unalterable ledgers, was invented in 2008 for use in managing the cryptocurrency, Bitcoin. Essentially, blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. It’s managed by a peer-to-peer network that adheres to protocols for communication and validation of new blocks. It’s compelling, because it’s so unchangeable: blocks can’t be altered retroactively without alteration of all subsequent blocks, which requires collusion of the network majority.

Increasingly, however, blockchain is for more than Bitcoin.

It’s even showing up in human resources (HR) departments. HR personnel looking to save time combing through resumes and dodge “embellished” claims are using blockchain to verify educational and experience claims on applications directly, according to HR Dive’s Riia O’Donnell.

“When it comes to resumes, blockchain technology has the potential to largely eliminate exaggeration,” wrote O’Donnell. “Schools can post degrees and educational details, employers can share dates and titles, and credentialing entities can make information available. Candidates could then authorize employers to access their records directly.”

Third Party Verification

Lying on resumes is nothing new. A survey conducted last year found that 85 percent of HR professionals found lies or exaggerations on resumes. Faked educational credentials are a common problem. With this in mind, HR professionals are increasingly wary of resume claims, but often lack the time and resources to check the truth of educational and experience claims.

Blockchain for Education Verification

Blockchain can help employers go directly to educational sources for verification of applicants’ claims. Last year, MIT became one of the first universities to debut a blockchain tool for human resources professionals to verify degree information directly.

Employers or third-party verification companies may soon be able to use blockchain technology to perform background checks. Going forward, human resources departments could be able to use the technology to seek out ideal candidates who may not even be applying for open jobs.

Today, third-party verification from companies like DataCheck remain the gold standard of employment verification for information such as the accuracy of a candidate’s experience, employment, education and criminal history.

Contact us today to discuss all your pre-employment screening needs.

Judge’s Ruling on Criminal Background Checks in Texas Muddles Hiring Compliance

In 2012, the federal Equal Employment Opportunity Commission (EEOC) under the Obama administration began advising employers to use criminal background checks during job screenings only when the inquiry is directly job-related or necessary for the business. Issued in the form of guidance, the EEOC clarification described employer policies that may violate Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, ethnicity, and other factors.

Background Checks for Hiring

In 2013, the State of Texas filed a lawsuit against the EEOC, accusing the commission of unduly restricting their ability to exclude certain candidates in hiring practices. (In Texas, it’s against the law to hire convicted felons for certain state agency positions.) Now, a federal judge has granted Texas’ request to block some of the restrictions, particularly those on background checks in hiring.

“The State of Texas and its constituent agencies have the sovereign right to impose categorical bans on the hiring of criminals, and the EEOC has no authority to say otherwise,” Texas argued in its November 2013 complaint.

The Obama-era rule was dismissed on procedural grounds, with the court finding that the EEOC violated federal law by issuing the guidance without providing the public with notice and opportunity to comment. The dismissal means that the EEOC may not enforce the 2012 guidance in Texas, though the federal government could choose to appeal the judge’s ruling. The judge did not hand the state a full win, however. According to the Texas Tribune’s Emma Platoff, the EEOC can still issue right-to-sue letters in Texas cases. In addition, the judge did not affirm Texas’ right to categorically exclude felons from certain jobs.

“A categorical denial of employment opportunities to all job applicants convicted of a prior felony paints with too broad a brush and denies meaningful opportunities of employment to many who could benefit greatly from such employment,” according to Judge Sam R. Cummings of the U.S. District Court for the Northern District of Texas (Lubbock Division).

Job Seekers with Records

Christine Owens, executive director of the National Employment Law Project, expressed disappointment with the district court ruling and said it should not be confused for a license to discriminate against job-seekers with records.

“Even in Texas, Title VII stands,” said Owens. “More broadly, states and employers would do well to avoid hiring policies that exclude people with records, as they only weaken the economy, undermine public safety, and harm families and communities. In light of this order, we are exploring our legal options moving forward.”

Employee criminal background checks can be a legal minefield, so employers should be sure they’re remaining within federal and state laws when they initiate checks. Third-party, pre-employment background screening companies can help employers stay in the boundaries of the law.

Contact DataCheck today for more information.

New California Labor Law Affects Employee Criminal Background Checks

Last year, the State of California passed a series of labor and employment bills that affect state labor and hiring practices. These laws, which were signed by Governor Jerry Brown and went into effect on January 1, 2018, relate to (among other things) workers’ wages and hours, leaves of absence and benefits, hiring practices, health and safety issues and other workplace protections. One of the most controversial laws is restrictions on how and when employers can request and use information about an applicant’s criminal history.

What is AB 1008?

Prior to 2018, California employers were already barred from making a decision on hiring a potential employee based on arrests or detentions that did not result in a conviction. The new law, Assembly Bill (AB) 1008, puts into place even stronger anti-discrimination measures. Companies with five or more employees must comply with the following:

  • They cannot seek the disclosure on an employment application of the applicant’s conviction history;
  • They can’t require or consider conviction history until a conditional offer has been made to the applicant; and
  • Employers may not “consider, distribute, or disseminate information related to specified prior arrests, diversions, and convictions.”

The “Individual Assessment” Requirement

AB 1008 also draws out the process for a company looking to deny employment to an individual based “solely or in part” on the applicant’s conviction history. Companies wishing to do so must first prepare an “individualized assessment” of whether the employee’s criminal history will have a “direct and adverse” relationship to the position’s duties. If not, the criminal history cannot be considered as a condition of employment. If it does (example: a person convicted of wire fraud applying for a financial management job), the employer must notify the applicant in writing of the decision, at which time, the applicant has five business days to respond before the employer can make a final decision. If the applicant challenges the accuracy of the conviction history, that person has an additional five business days to produce evidence and respond to the individualized assessment.

While AB 1008 may make criminal background checking more complex, it’s vital to work within the parameters of the law and protect the business from unpleasant surprises regarding employee criminal activity. The National Employment Law Project estimates that one out of three California adults has an arrest or conviction record.

To avoid running afoul of the new laws (which also limit what potential employers can ask about salary history), many companies are turning to professional third-party background screening companies such as Ontario, California-based DataCheck that understand the new rules and statutes. Even if you’re not hiring in California, 30 states and approximately 150 cities and counties have adopted some sort of “fair chance” hiring laws. Ensure you’re not inadvertently breaking these laws by offering training for your HR workers and calling in the help of professional background checking services.

Contact us today!

Uber Settles Class-Action Lawsuit over Background Checks

uber background check lawsuitA class-action lawsuit disputing Uber’s claims that the background checks it conducts on its drivers are “industry-leading” has been settled. The company has agreed to pay a total of $28.5 million to about 25 million riders across the country and to reword the language related to a fee.

The settlement was filed on February 11 in the United States District Court in the Northern District of California. It still needs to be approved by the court and accepted by riders. If that happens, people who were passengers from January 1, 2013 to January 31, 2016 will be able to accept a refund as a rider credit or a chargeback on a credit card. After attorneys’ fees are deducted, each passenger is only expected to receive about $1.

The lawsuit was filed against Uber in 2014, claiming that it misrepresented the extent of the background checks it conducts on potential drivers. The plaintiffs said that Uber falsely claimed to run “industry-leading background checks.” The company charged a “safe ride fee” of $1 to $2 that it said it used to offset those costs.

Uber’s background checks do not use fingerprint verification to make sure that the person submitting to the background check is actually who he or she claims to be. The plaintiffs argued that background checks using fingerprints were an industry-leading background check process.

Uber uses a third-party service to conduct the checks. Uber and its rival, Lyft, have fought against background checks using fingerprints across the United States. Lawmakers said the companies were choosing speed over providing quality background checks. Background checks for taxi drivers vary by location, but lawmakers said they were often more in-depth than the ones conducted by Uber and Lyft.

Uber and its subsidiary denied the allegations and did not admit any wrongdoing. The charge will now be called a “booking fee” and will be used to cover safety and future operational costs. Lyft has made a similar change to its policy.

Uber said that it plans to invest more money to research improved safety technologies such as biometric identification and voice verification. The company said it currently shares information such as drivers’ license plates and photo identification with riders and tracks trips with GPS technology.

Uber is also facing another civil lawsuit filed by two California district attorneys alleging that the company misled customers about its safety practices. It is unclear whether the lawsuit that was just settled will affect that other case.

President Obama Issues Executive Orders to Expand Gun Background Checks

obama gun background checksPresident Obama announced a series of executive actions last week that are intended to make it harder for criminals and people with a history of mental illness to buy guns. The actions are controversial, earning praise from gun control advocates and criticism from many Republicans and gun owners.

The Bureau of Alcohol, Tobacco, Firearms and Explosives licenses gun dealers. The ATF defines gun dealers as people who repetitively buy and sell firearms with the primary goal of earning a profit. People who make occasional sales from a personal collection are not considered dealers. An individual who advertises, has business cards, accepts credit cards, and restocks inventory is generally considered a dealer and must be licensed.

In some states, unlicensed sellers can make private sales without conducting a background check. Obama’s executive order could reduce the number of sales made without background checks by requiring more sellers to be licensed as dealers. Federally licensed gun dealers are required to conduct background checks on all sellers, regardless of whether a purchase is made at a store or a gun show.

A buyer must present identification to the seller and fill out ATF Form 4473 with information including name, age, address, race, criminal history, drug use, and history of mental illness. The seller submits the information to the Federal Bureau of Investigation over the phone or internet, and the FBI checks for information on the applicant in databases.

The FBI’s National Instant Criminal Background Check System, or NICS, operates 17 hours a day, every day except Christmas. Obama would like it to expand to 24 hours a day. Since the system was introduced 17 years ago, the FBI has conducted over 225 million background checks.

The FBI set a record in 2015, processing over 23 million background checks. A monthly record was set in December, the same month as the shootings in San Bernardino, California. The previous record was set in 2013 following a push for greater gun control after the shootings in Aurora, Colorado and Newtown, Connecticut in 2012.

Obama wants the FBI to hire 230 new examiners to process background checks. He also wants Congress to approve funding to hire 200 new agents for the ATF to enforce laws.

The Brady Handgun Violence Prevention Act of 1993 first mandated background checks. The law was named after Jim Brady, President Reagan’s press secretary who was paralyzed after being shot by John Hinckley, who attempted to assassinate Reagan in 1981. The Brady Campaign supports expanded background checks for gun sales.

Obama decided to use executive actions to expand gun control measures after his efforts to get legislation passed by Congress were unsuccessful. The last major attempt at expanding gun control at the federal level was in 2013 when President Obama and Democrats proposed expanding background checks and limiting sales of some semi-automatic weapons. Those measures were defeated in the Senate in April 2013.