New White Paper: The Importance of Policy Guidelines for Fair Use of Criminal History Checks and Vendor Access Programs in Avoiding Litigation

The days when employers had to concern themselves only with screening the backgrounds of full-time employees are gone. The employment and screening landscape has changed dramatically, demanding that employers concern themselves with the backgrounds of contractors or vendors entering their premises, or working on their behalf in customer homes.  CARCO has created a white paper examing the risks of not engaging in such screening, and offers solutions for companies looking to develop programs to screen contract and vendor employees.

To download the white paper entitled The Importance of Policy Guidelines for Fair Use of Criminal History Checks and Vendor Access Programs in Avoiding Litigation, please visit

FTC Proposes Changes to Update and Improve Credit Reporting Notices

The Federal Trade Commission is proposing revisions to the notices that

consumer reporting agencies provide to consumers, and to users and

furnishers of credit report information under the Fair Credit Reporting

Act (FCRA). The FCRA requires the FTC to publish model notices for

several forms that must be provided by consumer reporting agencies. The

proposed changes are designed to reflect new rules that the FTC and

other financial regulators have enacted under the Fair and Accurate

Credit Transactions Act of 2003, and to make the notices more useful and

easier to understand.

In addition to revising the general Summary of Rights notice, which

informs consumers about their FCRA rights, such as how to obtain a free

credit report and dispute inaccurate information in credit reports, the

FTC also is proposing improvements to the notices that credit reporting

agencies provide to users and furnishers of credit report information.

The User Notice and Furnisher Notice inform users and furnishers of

their obligation to provide certain protections to consumers. The model

notices were originally issued in 1997 and revised in 2004. The FTC is

accepting public comments on the proposed changes until September 21,


The link to the FTC website is


Employee Credit Privacy Act (H.B. 4658)

Signed into Law on: August 10, 2010

Effective Date:  January 1, 2011

Illinois has become the most recent state to react to the effect of the impact on the economic downturn on employees’ credit histories by restricting employers from using credit information in employment decisions.

Details of the Act:

  • Prohibits most employers from using an applicant’s or employee’s credit history as a factor in any employment decision, including hiring, discharging and terms of employment.
  • Prohibits employers from inquiring into an applicant’s or employee’s credit history or obtaining a credit history report from a consumer reporting agency.
  • Restricts use of a broad range of credit information regardless of the source of such information; it is NOT limited solely to information obtained from a consumer reporting agency.
  • Applies to employers of any size.
  • Employers may not retaliate or discriminate against a person for exercising rights under the Employee Credit Privacy Act.
  • Employers who violate the Act may be sued and ordered to pay damages including attorneys’ fees.
  • Does not allow waivers of the Act’s rights and invalidates any such waivers that exist.

Specific Exclusions:

  • Many government employers
  • Banks
  • Savings and loan associations
  • Other financial institutions
  • Debt collectors
  • Insurance companies
  • Surety businesses

Limited Exceptions:

  • Bona fide occupational qualification (BFOQ):  The Act provides limited exceptions that allow employers to use credit information where such information is related to a bona fide occupation qualification for a particular position or group of employees. This exception applies generally to those positions involving money-handling or other confidential job duties, such as:
    • those that require bonding by state or federal law;
    • employees who have unsupervised access to cash or certain assets valued at $2500;
    • employees who have signatory power of $100;
    • employees who are in a managerial position which involves setting direction or control of the business; and
    • employees who have access to confidential information, financial information or trade secrets.

Note: The Act includes other limited exceptions and contemplates that future administrative regulations may define additional categories of bona fide occupational requirements permitting exceptions of this Act. Notably, the Act specifically incorporates BFOQ definitions from either the state or federal Departments of Labor.

To review the entire Bill:

This information is being provided to you for informational purposes only.  It should not in any way be considered legal advice.  Please consult with your legal department for all matters concerning employment and labor decisions.

Department of Homeland Security issues a Final Rule on I-9 electronic storage and signature.

Effective August 23, 2010:

The U.S. Department of Homeland Security published a final rule amending an interim final rule on the electronic signature and storage of the Form I-9. This final rule makes minor changes to the interim final rule to clarify:

Time to Complete Form I-9:

  • Employers must complete a Form I-9 within three business days (not calendar days).

Electronic Storage Options:

  • Employers may use paper, electronic systems or a combination of paper and electronic systems.
  • Employers may change electronic storage systems as long as the systems meet the performance requirements of the regulations.

Audit Trail Requirements:

  • Employers need not retain audit trails for each time a Form I-9 is viewed electronically, but only when the Form I-9 is created, completed, updated, modified, altered, or corrected.

Employee Receipt:

  • Employers may provide or transmit a confirmation of Form I-9 transaction, but are not required to do so unless the employee requests a copy.

The Final Rule can be viewed in detail at .

Massachusetts Gov. Deval Patrick signed a new law that allows employers to obtain criminal records of job applicants over the Internet for the first time

BOSTON – Gov. Deval L. Patrick on Friday signed a new law that allows employers to obtain criminal records of job applicants over the Internet for the first time, overhauls the state’s mandatory minimum sentencing laws for certain drug offenses and bans sex offenders from driving ice cream trucks.

The new law makes significant changes to the state’s Criminal Offender Record Information system and expands the number of people who can use the system. In a key move to help ex-offenders, the bill cuts the time for sealing felonies from 15 years to 10 years, and for misdemeanors from 10 years to five.

“This legislation brings our outdated criminal history database into the 21st century, ensures law enforcement agencies, employers and housing providers have access to accurate and complete records in appropriate circumstances and helps people get back to work so they can support their families,” said Patrick, who was cheered by hundreds of people when he signed the new law at the Freedom House in Boston, which offers education and anti-poverty programs.

According to the new law, employers, public and private housing providers, volunteer organizations and state and municipal licensing authorities will be cleared to use a credit card over the Internet to access criminal records of applicants for a fee. The new state Internet site must be ready in 21 months. The fee, currently $15, could be $20 with discounts for large employers.

Right now, certain employers and others need to apply to a state board to obtain criminal records. Only 3 to 5 percent of private-sector employers currently have access to the data base, with use largely limited to nursing homes, schools and others dealing with vulnerable people said John Grossman, undersecretary for the state Executive Office of Public Safety and Security. The system is so cumbersome that most private employers use outside agencies to obtain criminal records and the information can sometimes be outdated or inaccurate, he said.

A change in the state’s mandatory minimum sentencing laws will cover only people convicted of lower-level drug offenses and serving 2.5 years or less at a county jail, not anyone in a state prison.

Under the change, these offenders will be eligible for parole after they serve one half of their sentence, ensuring that they receive supervision and training when they leave prison, Grossman said. Such convicts currently serve the mandatory sentence and are released with no restrictions or training because they have no parole, according to Grossman.

Offenders won’t be able to obtain parole if they used violence or guns, directed drug activities of others or sold to minors.

Barbara J. Dougan, a director in Massachusetts for Families Against Mandatory Minimums in Washington, praised the change, saying the current law frequently punishes low level offenders the same way as drug kingpins. The organization said it is the first easing of the state’s rigid drug sentencing laws since they were established nearly 30 years ago.

The new law, given final approval by the state Legislature a week ago, prohibits employment applications from including questions about someone’s criminal record, but employers are allowed to ask about that during job interviews. This “ban the box” provision is seen as a way of giving ex-offenders a greater chance at obtaining a job.

The state House of Representatives voted 131-22 in support of the law; the Senate, 30-9.

In cracking down on sex offenses, the law requires GPS tracking of homeless sex offenders and requires such convicts to verify registration data and appear at local police departments every 30 days, down from the current 45 days.

According to Grossman, the law calls for new regulations on ice cream truck drivers and bans sex offenders from becoming drivers.

Drivers and ice cream truck vendors would need to place a municipal permit on the vehicle’s windshield. Fines would be $500 for each day the permits are not displayed. Drivers would need to have criminal background checks and would need to be fingerprinted to obtain a municipal permit.

Kimberly A. Desy, owner of an ice cream business in Sturbridge, said all drivers of her trucks must pass state criminal background checks, but not all drivers undergo the same checks.

“There’s a lot of what we call rogue ice cream trucks out there,” Desy said.

Activists from the Springfield area said the new law will give offenders greater opportunities for finding jobs and improving their lives. During recent years, the local activists joined others around the state in a major push for the new law.

“This new law is going to change lives, especially for young people,” said Daniel Perez, 50, of Holyoke, who was among about a dozen members of Neighbor to Neighbor in Springfield attending the signing ceremony.

The Associated Industries of Massachusetts, a Boston-based association of employers, also supports the bill and urged Patrick to approve it.