News & Events - Newsletters
Workplace Wave, January 2003
The following are exerpts from this month's newsletter.
The Current State of Background Check Requirements – Time to Review Your New Hire Process
Last year, as part of sweeping identity theft legislation, employers have been required to provide background reports to all individuals, whether requested or not. The legislation was so broad that it possibly included employment references and information obtained through internal investigations. Since this was an unintended result of the law, the California legislature approved clean-up legislation, amending Civil Code §1785.1, et seq. Here is a review of the current requirements (based on California and federal laws).
1. Obtain written pre-authorization from the applicant/employee to conduct a routine background investigation (these provisions do not apply to investigations into suspicions of misconduct).
Requirements:
- Stand-alone agreement (not part of the employment application)
- Identify purpose of investigation and report (e.g., investigation of consumer's character, general reputation, personal characteristics and mode of living for employment purposes)
- Identify name and address of the investigative agency
- Provide a box for applicant/employee to check to receive a copy of any report that is prepared -If checked, send report within 3 business days from receipt, or contract with investigative agency to send report.
- Provide a box for applicant/employee to check to waive his or her right to receive a copy of any public record obtained directly by the employer.
2. When employment is denied due to the background investigation, notify the applicant/employee before the decision is final.
- Send a copy of the investigative report and the document entitled, "A Summary of Your Rights under the Fair Credit Reporting Act," published by the Federal Trade Commission.
- After the adverse action is taken, notify the individual (orally or in writing) that this has occurred as a result of information disclosed in the report and provide the name, address and phone number of the investigative agency who prepared the report and notice that the individual has the right to dispute the accuracy or completeness of any information the agency furnished and his or her right to an additional free credit report from the agency upon request within 60 days.
- Provide any public records obtained by the employer to the applicant/employee, regardless of whether he or she waived his or her rights to them.
3. When the employer conducts an investigation, only information that are matters of public record (defined as documents of arrests, indictments, convictions, civil judicial actions, tax liens or outstanding judgments) are subject to disclosure. Provide this information to the applicant/employee within 7 days after receipt of the information (whether written or oral).
- If a public record is obtained during an investigation into suspected wrongdoing, the information may be withheld until the investigation is completed. Upon completion of the investigation, provide the employee a copy of the information.
4. Employment references need not be disclosed to applicants/employees. If the investigative agency's report includes this information as a matter of course, employers may consider having this information redacted before it is provided to the applicant/employee.
Employee Access to Payroll Records
This new law is in effect as of January 1, 2003. It requires private sector employers (regardless of size) to allow all current or former employees to inspect or copy their "payroll records" within 21 calendar days from the date of the request. Payroll records are not specifically defined but this requirement is found in the Labor Code that discusses employers' obligations regarding compensation and payroll deductions. Employers may charge employees for the actual costs of photocopies.
There is a civil penalty of $750 for failure to comply. Injunctive relief is also available to ensure compliance, which includes recovery of attorneys' fees. However, impossibility of performance will be an affirmative defense in the event of a lawsuit.
Does this mean we have to dig through our archived microfiche records? Yes. The law states that all records are to be provided without limitation in terms of how old the records are or the format of the records.