According to the latest Debt Collection Litigation and CFPB Complaint Statistics Report from WebReconConsumer litigation cases under the Fair Debt Collection Practices Act, Fair Credit Reporting Act (FCRA) and Telephone Consumer Protection Act all increased in January.
Starbucks, Home Depot, Wegmans, Lowes, Avis. What do these companies have in common? Lawsuits brought against them for improper criminal background checks. Class action and individual lawsuits are on the rise: nearly 4,000 last year alone.
While lawsuits are damaging, class action suits could be a death blow to your company. Grabbing the media spotlight, surging in SEO hits, class action suits have the potential not just to cost reparations and damages, they could damage your brand in the marketplace irreparably. As an HR Executive, that much media attention could mean the difference between having an office in the morning or considering a name change.
On the surface, withholding criminal history information from employers until late in the interview stage would seem to help African American and Hispanic men gain employment, but a recent study by The National Center of Economic Research claims just the opposite.
In what may be a preview of things to come for all California employers, the Los Angeles City Council has voted (13-1) to pass a ‘Fair Chance Initiative’ (effective Jan 1, 2017) that will “Ban the Box” from job applications. The initiative will forbid public and private employers with more than 10 employees from asking applicants about criminal records while also requiring the delay of background checks until conditional job offers are made, according to a blog on the website of Councilman Curren D. Price (District 9).
Do-it-yourself (DIY) background checks can appear to be faster and less expensive, but the quick and-easy approach may not serve even a small company’s best interests and could actually put your company at significant risk.
According to an article in Business News Daily, “The vast majority of these DIY websites specifically say they are not to be used as part of the employment screening process because the websites are not compliant with the Fair Credit Reporting Act (FCRA).” Non-compliance with FCRA guidelines when doing a background check for employment have resulted in multi-million dollar lawsuits against employers.