Federal Bill Introduced to Ban Salary History Question

Employers would no longer be allowed to ask job applicants about their salary histories under a bill introduced in Congress Sept. 14. The bill by Rep. Eleanor Holmes Norton, D-D.C., is designed to even the playing field among men and women and minorities doing substantially the same work.

SHRM Online reported that a spokesperson from Norton’s office projected that the bill would be introduced in the House of Representatives this week. Congress referred the bill to its House Committee on Education and the Workforce.

Under the Pay Equity for All Act of 2016 (H.R. 6030), the U.S. Department of Labor would be able to assess fines up to $10,000 against employers who violate the law by asking questions about an applicant’s salary history. Additionally, prospective or current employees would be able to bring a private lawsuit against an employer who violated the law and could receive up to $10,000 in damages plus attorney fees.

On a state level, Massachusetts just signed a pay equity law making it the first state to enact this type of legislation. New York and California have similar laws pending approval.

The bill is co-sponsored by Reps. Rosa DeLauro, D-Conn., Jerrold Nadler, D-N.Y., and Jackie Speier, D-Calif.

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CARCO Group, Inc. Receives Certification Under the EU-US Privacy Shield Framework

privacy-shield-logo-flagEffective September 13, 2016, CARCO Group, Inc. is a listed participant and is certified under the EU-US Privacy Shield Framework. This certification enables CARCO to effectuate transfers of personal data during the background screening process to the United States from the European Union while ensuring that EU data subjects continue to benefit from effective safeguards and protection as required by European legislation.

 “As a major provider of international employment screening and HR related services, it is imperative that the information flowing from the EU to the US be protected,” stated Bruce Berger, CARCO’s Chief Compliance Officer. Mr. Berger further stated, “It is imperative that the individual about whom the information relates is comfortable with the manner in which the information is handled and protected, and that there are established procedures in place for the individual to access, verify, dispute, and correct, if necessary, that information. CARCO is extremely concerned about the lives which can be impacted by information handling practices and strives to protect the individual in every possible way. We are extremely proud at our being one of the earliest adopters of the EU Privacy Shield Framework.”

The EU-U.S. Privacy Shield Framework was designed by the U.S. Department of Commerce and European Commission to provide companies on both sides of the Atlantic with a mechanism to comply with EU data protection requirements when transferring personal data from the European Union to the United States in support of transatlantic commerce. On July 12, 2016, the European Commission deemed the Privacy Shield Framework adequate to enable data transfers under EU law (see the adequacy determination).

To view CARCO’s EU US Privacy Shield Privacy Statement, click here.


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Judge shoots down Johnson & Johnson and Kelly Services’ FCRA arbitration bid

J&J Logo   Kelly Services logo  On September 7th, a Pennsylvania federal judge declined Johnson & Johnson, Inc. and Kelly Services, Inc.’s motion to compel arbitration with a Plaintiff accusing them of violating the Fair Credit Reporting Act (FCRA).

Plaintiff T. Jason Noye alleges that JNJ rescinded his job offer after discovering a criminal record on his background report, despite never providing the Plaintiff with a copy of the report or his rights under the FCRA.

The Plaintiff also claims that the criminal record listed on the background report was incorrect, improperly listing four misdemeanors.

The Defendants argued that the Plaintiff signed an arbitration agreement when applying for the job through Kelly’s staffing service.

The judge rejected this argument, writing, “the Court finds that evidence submitted in response to Defendant’s motion is ‘not insubstantial’ and constitutes more than a ‘naked assertion’ that Plaintiff did not intend to be bound by the arbitration agreement.”

This lawsuit should never have happened. A major lesson here is that employers should be sure to use a background screening partner that will ensure compliance with the law. A quality background screening partner will also help with brand protection, candidate experience and saving their clients’ money by keeping them out of expensive lawsuits.

For tips on how to avoid litigation through proper due diligence when selecting a background screening partner, view CARCO’s White Paper: Selecting a Background Screening Company.



Noye v. Johnson & Johnson et al., case number 1:15-cv-02382, in the U.S. District Court for the Middle District of Pennsylvania.

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Current Form I-9 valid until Jan. 21, 2017

i-9-form-2  Employers should note that on Aug. 25, 2016, the Office of Management and Budget (OMB) approved a revised Form I-9, Employment Eligibility Verification. The revised form must be published by Nov. 22, 2016.

However, employers may continue using the current version of Form I-9 with a revision date of 03/08/2013 N until Jan. 21, 2017, at which time all previous versions of Form I-9 will be invalid. In the meantime, USCIS is in the process of getting the new form changes implemented.

We will continue to monitor and report the latest news on the revised Form I-9.

For information on how CARCO’s electronic I-9/E-Verify solution will keep you compliant, click here.

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Dish Network to pay $1.75M to settle class action for FCRA violations

dish_logo  On September 7th, Dish Network, LLC agreed to a $1.75 million settlement resolving allegations that the company violated the FCRA.

The Plaintiffs accused the company of soliciting background reports on technicians, hired as contractors, without providing disclosure forms. The Plaintiffs also accused the company of prohibiting “high-risk” technicians from working on certain Dish projects, without allowing technicians the opportunity to verify or correct information included in their background check reports.

The settlement will offer $480 to the 9,000 contractors that Dish labeled “high-risk” and offer $80 to the 38,000 contractors that Dish failed to provide disclosures to. The complaint accused Dish of being aware of its FCRA obligations but intentionally choosing to ignore disclosure requirements.

The suit was originally filed in 2012 and included Sterling Infosystems Inc., the background screening vendor that provided the reports.  Sterling paid $4.75 million in November 2015 to settle the claims against it.


Ernst v. Dish Network LLC et al., case number 1:12-cv-08794, in the U.S. District Court for the Southern District of New York

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Class Action Lawsuit Says Petco Hid Credit Check Authorizations

petco-logo On August 29th, Plaintiffs accusing Petco of violating the  FCRA urged a California federal judge not to dismiss their proposed class action lawsuit. The Plaintiffs accuse Petco of conducting credit checks and other consumer reports on applicants and hiding its employment background check disclosure on a form that included other distracting language. The complaint argues that Petco’s hidden authorization language violates the FCRA.

The complaint alleges that instead of a “clear and conspicuous” and separate disclosure, Petco has a text box in the middle of its online application “which appears on a screen with small·font wording in the middle that the applicant scrolls through by dragging a scrollbar on the right hand side” called the Background Check Disclosure.

The class action states that if printed out, the disclosure would take up five pages, and  supposedly authorized Petco to conduct regular consumer reports of its applicants and employees. This disclosure does not meet federal requirements, the class action asserts.

In addition, the lawsuit claims that if an employer makes an “adverse decision” based on something in a credit report, they have to notify the consumer of that fact. The complaint alleges that Petco fails to do this.

Plaintiff Jacklyn Feist states that in October of 2015 she applied online to work at a Petco store, had two interviews, and was given a job. However, in the meantime Petco obtained a consumer report from Petco’s vendor which stated that she “did not meet company standards.”

Feist claims that when she reported for her first day of work, she was told there was a problem with her background check and she was not allowed to work. Feist asserts that she was never provided notice about the background check or the adverse decision from it, as required by the FRCA.

Plaintiff Angelica Zimmer says that she completed the online application for Petco in July of 2014, and worked for Petco from September 2014 to January of 2015. Zimmer claims that in August of 2014 Petco received a consumer report on her from its vendor without her knowledge.

Petco previously argued that the Plaintiffs lacked standing and failed to allege an actual violation of the FCRA. The Plaintiffs rejected Petco’s arguments, claiming that the company’s disclosure was over 30 paragraphs and consisted of “reams of extraneous information beyond the required consumer report disclosure.” The Plaintiffs also argued that, “It is self-evident that such a document does not consist ‘solely’ of the disclosure that a consumer report may be procured and thus violates the FCRA.” The Plaintiffs also argued that Petco’s attempts to dismiss the case for lack of standing only applied to one of the Plaintiffs, claiming that, “The Supreme Court has repeatedly held that where the standing of one Plaintiff is established, it is not necessary to inquire as to the standing of the other Plaintiffs.”


Feist et al. v. Petco Animal Supplies Inc. et al., case number 3:16-cv-01369 , in the U.S. District Court for the Southern District of California


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The Importance of Using an Accredited Background Screening Company: Jones vs. Waffle House

This gallery contains 3 photos.

A Florida judge recently permitted a class action lawsuit against Waffle House for non-compliant criminal background checks to move forward. Plaintiff William Jones filed a class action lawsuit against Waffle House in October 2015. Despite having worked for Waffle House … Continue reading

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DID YOU KNOW? CARCO Has Technology Driven Solutions

Portal mobile combo photo

CARCO’s Technology Driven Solutions provide:

  • Onboarding Platform
  • Pre-Hire & New Hire Form automation
    • Pre-Hire & New Hire
    • Direct Deposit
    • Employee Engagement Surveys
    • Exit Interview
    • Training Videos
  • Seamless integration with our in-house Drug and Background processes
  • Electronic signature
  • Secure Mobile Document Upload App
  • Applicant Portal and Task Wizard
  • Client Portal with Dashboard to manage applicants & client tasks
  • Technology that allows for multiple client roles and multiple automated and customizable applicant workflows
  • Proactive email reminders
  • Experience at integrating with multiple ATS systems
  • Automated EEOC compliance
  • CARCO Analytics Reporting Tool (CART)
  • I-9/E-verify

For more information on CARCO’s Technology Driven Solutions, visit http://www.carcogroup.com or call 866-557-5984 to speak to a CARCO Specialist.


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Four Questions to Ask When Using Employment Credit Reports in Hiring

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Most people who use employment credit reports consider the method of payment information, the amount of debt, and the presence of bankruptcies, liens and civil cases to be most enlightening, and use that information to deny employment. But are they correct in so doing? Is that approach defensible? Whether you are looking at a credit report, criminal history, or any other background information containing potentially adverse  information,  when  evaluating  the  past  behavior  of  a  prospective  or current employee to determine suitability for a specific job, you must answer these four questions:

  1. Is it job-related?
  2. Is it current enough to be relevant?
  3. Is it severe enough to be significant considering the time elapsed since it occurred?
  4. Is the report accurate – is it likely that the applicant did (or did not) do it?

The question of job relatedness is the most difficult question to address. For what job is it critical to know that an applicant’s national credit card and local Joe’s Tires accounts are paid promptly every month? Under what circumstances should we consider the judgment in favor of the roofing contractor or hospital in making an employment suitability decision? Some would argue that a poor credit report, or many high credit lines, is a clear indication of a serious risk to their company because that is the best evidence that the subject is at least irresponsible, and probably dishonest. Following this logic, we know that all financially stable folks are always honest and trustworthy, while all poor and financially struggling people are naturally dishonest and untrustworthy.  Right? Of course not.

Is there an answer to the question of job relatedness? Unfortunately, not a clear one although many of the laws referenced in the resources do carve out circumstances, or in some cases positions, for which a credit report may be requested. Note that merely having a law that may permit the use of credit reports does not relieve the employer of the ultimate responsibility to be able to demonstrate job relevance if challenged. Most of the guidance from litigation has come in the form of what is not job related. If you are filling a warehouse position, credit worthiness is not a bona fide occupational qualification. When hiring an individual with clear fiduciary responsibility, like a counter in a money room, it may be appropriate… unless you are hiring in New York City! (Review the New York City Stop Credit Discrimination in Employment Act to learn more).

Do not forget the credit report does not investigate how the information reported came to pass. The raw data provided only pulls the curtain back slightly. The employer has an obligation, in determining job relevance, currency, and accuracy, to complete the research only suggested by the data reported. For example, if the applicant has “bad credit” due to a catastrophic illness in the family, should that have the same weight as someone who has bad credit due to an addiction to television shopping channels and an aversion to paying bills? Many think not and in fact there is a growing legislative movement to specifically exempt medical bills from any credit worthiness evaluation.

Recommendations to Consider

In the absence of reliable direction that is legally defensible, the bare facts in a credit report should not be allowed to disqualify any applicant. An employer has two options when using the employment credit report:

  • When the credit report contains information which, on its face, appears adverse based on job- related standards, that report should be used as the basis for a more in depth review with the candidate to probe the circumstances to determine if there are mitigating factors to explain that derogatory information and to assess whether the adverse information is relevant to the job and should be considered as a factor in the hiring, retention or promotion decision; and/or
  • Establish an annual employment credit report review, (with the appropriate FCRA consents), and review those reports for significant changes in position from year to year.

The second approach is recommended for employees with access to significant amounts of cash and other negotiable instruments, and those who can sign contracts or commit your company to outlays of significant resources, such as buyers, purchasing agents, sometimes including department heads and company officers, when permitted by law. The annual credit audit should be automatic but, again, the presence of a significant change in credit standing should only start an inquiry. It is not to be misconstrued as conclusive proof of wrongdoing.

Generally speaking, if you are not currently using employment credit reports, do not feel that you need to start. Upon close inspection, very few positions actually merit credit inquiries. The questions of integrity that some employers expect to be answered by a single credit report are often better addressed with a combination of thorough background checks, comprehensive and well communicated corporate ethics polices, with established controls and management oversight.

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SoFi Settles $2.4M Class Action Over Credit Report Misrepresentation

SoFi logo      On August 9th, a California federal judge approved Social Finance, Inc.’s (SoFi) $2.4 million settlement resolving a class action lawsuit that accused the company of violating the Fair Credit Reporting Act (FCRA). The Plaintiff alleged that SoFi had consistently run “hard pull” credit inquiries on consumers’ credit scores, despite claiming to use “soft pull” inquiries, which negatively impacted consumers’ scores in the process.

The $2.4 million settlement will be divided among the 10,700 consumers whom SoFi, which specializes in student loan refinancing, ran “hard pull” inquiries on between November 2013 and August 2014.

SoFi’s Counsel argued that, “Given that there is a disagreement about whether injunctive relief is even available to private plaintiff under the FCRA, this accomplishment is remarkable, and may achieve more for class members than could have ever been achieved in litigation.” The settlement will also require SoFi to request that the consumer reporting agency retroactively reclassify its “hard pull” credit inquiries into “soft” inquiries.


Heaton v. Social Finance Inc., case number 3:14-cv-05191 in the U.S. District Court of the Northern District of California


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