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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Judge Shuts Down “Professional Plaintiff” and Dismisses Time Warner FCRA Violation Class Action Lawsuit

time-warner-cable-logo  On August 9th, 2016, a Wisconsin federal judge dismissed a proposed class action against Time Warner Cable, Inc. for allegedly violating the FCRA. The original complaint alleged that Time Warner violated the law by running credit checks on job applicants during the background screening process without their prior express consent.

However, Time Warner argued that the case should be dismissed because the Plaintiff has applied to over 562 jobs over the past two years with no intention of actually working for them and has threatened 50 of these companies with FCRA litigation, resulting in $230,000 in settlements thus far.

Time Warner’s lawyers stated that the Plaintiff, Cory Groshek, admitted during a deposition that he has applied for hundreds of jobs, hoping to initiate the background check process that could lead to an FCRA violation.

The judge ultimately ruled in Time Warner’s favor, dismissing the case because the Plaintiff was unable to demonstrate “concrete harm” in line with the Supreme Court’s ruling in Spokeo, Inc. v. Robins.

The judge also denied the Plaintiff’s motion to seal some of the case documents referencing his other lawsuits, writing that the Plaintiff, “sued the defendant on a cause of action for which he has sued a number of other companies, and yet he argues that those other suits are irrelevant to this one. In essence, he indicates that while he wants to be able to file suit against the defendant in federal court, he wants to prevent the defendant from enquiring into similar suits that he has filed against other companies for the same alleged conduct. That is not an appropriate basis for the court to seal.”



Cory Groshek v. Time Warner Cable, Inc., case number 2:15-cv-00157, in the U.S. District Court for the Eastern District of Wisconsin

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Sprint Settles Background Checks Class Action

Sprint logoOn August 8, 2016, Sprint Corp agreed to an undisclosed settlement resolving allegations that the company illegally asked job applicants to waive their privacy rights.

The Plaintiff accused Sprint of using an illegal background check authorization form that gave the company permission to access his private health and educational information in violation of the Fair Credit Reporting Act (FCRA). The complaint claims that the authorization form allowed Sprint “a vast and limitless release of information.” The lawsuit sought to represent a class of all job applicants that signed the form, which has been in use since 2013.

Sprint previously attempted to dismiss the case by offering the Plaintiff the maximum penalty under the FCRA, which the plaintiff rejected. The settlement occurred before the Plaintiff was able to certify the nationwide class of job applicants.


Rodriguez Jr. v. Sprint Corp et al., case number 1:15-cv-10641, in the U.S. District Court for the Northern District of Illinois.

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Massachusetts’ New Pay Equity Law is a Milestone in Closing the Gender Wage Gap

Law book   As of July 1, 2018, Massachusetts’ new pay equity law will prohibit employers from asking job applicants to disclose their wage and salary history on job applications.

According to the law, all public and private employers are prohibited from discriminating in any way on the basis of gender in the payment of wages or paying any employee a salary or wage rate less than the rates paid to their employees of a different gender for comparable work. The new law also prohibits Massachusetts employers from barring employees to discuss their salaries with each other.

According to the U.S. Census Bureau, women earn 70 cents for every dollar earned by men. By using salary history on job applications as a guideline for pay, this inequity has a tendency to follow workers throughout their professional lifetime.

Other states, such as Maryland and California, have similar legislation focused on reducing pay inequity and salary secrecy. However, according to Karim Fadel of Boston-based Unison Realty Partners, the key difference in the Massachusetts law is, “Instead of tackling the consequences of unequal pay, the Massachusetts law will focus on making equal pay for equal work the gold standard from the moment a prospective employee walks in the door.”

Companies are now required to post a minimum salary in job ads and pay any hire at least that amount. It should be noted that employers will be able to ask an applicant what he or she “hopes to earn” in the new position.  However, that practice might be open to interpretation in a court of law.

The new law lengthens the time an employee has to bring a pay discrimination suit from one to three years and allows for the awarding of attorneys’ fees. It also clarifies that analysis of “comparable” work must be based on skill, effort, responsibility and working conditions. An employer is allowed to defend itself against gender discrimination claims if the company conducts a self-evaluation of workplace job classifications and wage rates.

Wage differentials are permitted based on:

  • A seniority system,
  • A merit system,
  • A system that measures earnings by quantity or quality of production or sales,
  • Geographic locations in which a job is performed,
  • Education, training or experience to the extent such factors are reasonably related to the particular job in question, and
  • Travel, if it is a regular and necessary condition of the particular job.

The new law expands the existing groundbreaking pay equality law that was enacted in Massachusetts in 1945.

All employers should take note and prepare for this law to become an issue in their state. It is expected that many states as well as the U.S. Congress will adopt similar laws within the next two to five years.


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New credit reporting changes are problematic for positions regulated under FINRA. CARCO FAST can help!

credit-report-history-300x171  According to an article by credit.com, the major credit reporting agencies are working on a big change that could bolster a lot of people’s credit scores.

As part of the National Consumer Assistance Plan, Equifax, Experian and TransUnion are planning to significantly reduce the amount of tax-lien and civil-judgment information found in consumer credit files by July 2017. The changes will enhance credit reporting accuracy and make credit information more transparent and user-friendly for consumers.

However, the changes will present a problem in vetting candidates for regulated positions under FINRA that require verification of liens, judgements and civil actions.

CARCO’s Financial Anomalies Search Technology (FAST) can help!  FAST provides compliance officers and recruiters a means to match regulated candidates self-disclosures regarding public civil records, liens or judgments in compliance with Federal, State, or local laws and regulations.  FAST is provided in a two-phase approach so users do not have to pay for research on items that are already disclosed and self-explanatory. Phase I results are provided in an unverified form that allows the user to easily compare those results against the regulated candidate’s disclosures on any applicable personal history form such as the FINRA U-4 or U-5 forms.  When the comparison between the self-disclosures and the CARCO FAST is complete, the reviewer initiates Phase II by selecting specific reported records for further research at the source to obtain accurate, complete, and up to date records matched to the candidate that are actionable.  By allowing the reviewer to identify unmatched records before perfecting those records, research time and cost do not have to be expended for those records that match and have already been disclosed by the candidate.

Regulated entities have already struggled with the limitations of credit reports. However, when this change takes place, credit reports will no longer be any part of the solution to verify liens or judgments.

CARCO FAST is a unique product offered by no other company that can be the solution!

Click here to view CARCO FAST’s Simplified Workflow Infographic.


For more information on CARCO FAST, contact a Specialist at 1-866-557-5984 or click here.

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A Side-By-Side Comparison of Privacy Shield and Safe Harbor

  As you may know, the EU Safe Harbor was invalidated and the U.S. Department of Commerce and the EU have been working to develop a replacement program which would allow for the trans-border flow of personal data between the U.S. and the EU member states.

On July 12, 2016, they successfully passed the new program called the EU-U.S. Privacy Shield, which goes into effective on August 1st.

According to the EU-U.S. Privacy Shield Fact Sheet, the framework was designed 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 U.S. in support of transatlantic commerce. It also imposes stronger obligations on U.S. companies to protect Europeans’ personal data. It reflects the requirements of the European Court of Justice, which ruled the previous Safe Harbor framework invalid.

The Privacy Shield requires the U.S. to monitor and enforce more robustly, and cooperate more with European Data Protection Authorities.  It includes, for the first time, written commitments and assurance regarding access to data by public authorities.

In order to best understand the difference between the old and new framework, Bryan Cave LLP, a global law firm that serves clients in key business and financial markets, has prepared a side-by-side comparison of the invalidated Safe Harbor and the new Privacy Shield. The key areas covered in the comparison are:

  • Privacy policy
  • Onward transfers to controllers
  • Onward transfers to service providers/sub processing
  • Security
  • Data integrity
  • Access
  • Data subject’s enforcement ability
  • Contracting party oversight
  • Regulatory oversight
  • Regulatory liability
  • Implementation
  • Costs

To view the full comparison, click here.

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Are Employees Ready to Wage a “Wage War”? A recent survey says yes!

survey 4 In past years, employers have had the upper hand over anxious job seekers.  However, the findings in Spherion’s new 2016 Emerging Workforce Study (EWS) shows that shifting economic conditions and a strong job market are giving power back to employees.

According to the survey, more employees believe they have leverage to demand higher salaries and better benefits from their employers OR they will look for them elsewhere!

The study indicates that employers seem to recognize the importance of raising wages to retain top employees – (74%) of companies say they have increased wages to remain competitive. A nearly equal number (73%) say they have seen their competitors raise salaries.

However, 62% of employers who recognize the need to pay higher wages say they simply cannot afford to do so.

The impending “wage war” is not the only hot-button issue fueling changes in the workplace. The EWS highlighted other additional factors influencing how both employees and employers evaluate today’s most critical issues, some of which are noted below.

Employee Engagement: 23% of employers cite employee engagement as one of their top three concerns over the next two years. The research also uncovers some surprising disconnects between what employers think and what employees believe.

Employees are more engaged than employers believe.

  • Employers: 17% believe their employees are highly engaged
  • Employees: 50% said they are highly engaged

Employers and employees are somewhat misaligned on what drives engagement:


  • Relationship with boss
  • Company strength and stability
  • Impact on company success


  • Rewards for accomplishments
  • Impact on company success
  • Relationship with boss

Employee Retention: Employers continue to struggle with retention, with 47% reporting they have replaced more than 20% their workforce in last 12 months.  The EWS found that employers and employees share differing views on the factors influencing retention.

  • Employers:  Believe workers value more personal influencers, such as supervisor relationships.
  • Employees: Prioritize financial compensation in their decisions

Workplace Diversity: Employers and employees agree on the importance of diversity in the workplace. Both parties recognize that a diverse and inclusive workplace fosters growth and learning.

  • Employers: 89%
  • Employees: 75%

Both employees and employers agree that diversity and inclusion initiatives could be better executed.

“A” grade for their efforts to create a more diverse and inclusive workplace:

  • Employers: 24%
  • Employees: 28

“C,” “D” or “F” grade:

  • Employer: 32%
  • Employee: 33%


Survey Methodology: The 2016 Emerging Workforce Study was conducted online during February and March 2016, among 416 human resource managers and 2,810 employed adults, ages 18 and older.

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DID YOU KNOW? CARCO has a Mobile App!

Mobile App CARCO’s Mobile Document Upload App facilitates the process of transferring forms from either the applicant or your Human Resources staff that are required for the background check or I-9 processes.

Some of the forms uploaded using the Mobile App include W-2 forms, passports, school records, and more.  When using the app, no sensitive documents are stored on the phone itself. All forms are secured using TLS encryption so you can be confident that your candidates’ information will be safe.  

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