Do you remember the days when job applicants put on a nice suit, walked into a business, spoke with the manager on duty and asked if they had any positions open? After a few questions over a cup of coffee, it was decided whether the applicant and the open position were right for one another. “When can you start?” or “I’m sorry, this just isn’t a good fit.”

An apartment could be rented to the “nice looking couple” who saw the landlord putting a “For Rent” sign on the lawn. A hand shake and the first month rent moved you in.

Then came forms and rules, regulations and policies, agencies and committees. Screening.  Now, hiring the right person can get an employer in as much legal trouble as turning down the wrong one.  Does the employment application ask about marital status? Was there a box offering a copy of the report? Was there a Summary of Rights attached? In Spanish?

Although most people have heard of the Title VII, the FCRA and maybe even the FTC, how many people   not in the screening business actually know what they do, are familiar with the term “disparate impact”, “pre-adverse action” or the CFPB? Not many, hence, the birth of screening companies.

As an employer or a landlord, ignorance is far from bliss. Not knowing about specific laws can be expensive to your bottom line and to your reputation. Most employers are not attorneys. Many do not have human resource departments whose job it would be to know these laws backwards and forwards. They, like you, hire screening companies to help them pick the right person for the right job. Landlords don’t have the time or resources to check a person’s national criminal history, but the safety of the entire community could be in jeopardy if it isn’t done properly.

If the forms that your screening company is currently using – or providing to you to use – are not up to date, they are taking your money and pushing all liability onto you – the end user.  Your screening company should be protecting you and educating you to mitigate your risks and liabilities. An employer who gets a “recommendation” to not hire Jane because she has a criminal record, could be in for major fines!  Do you know if your screening company would have sent a pre adverse action letter (prior to notifying you of the charge) to Jane so that she can dispute the jaywalking charge that happened 22 years ago? A “blanket” exclusion policy for all criminal charges is illegal. In most cases, this particular charge should not even be reported because of the age of the offense. A screening company can report the charge to you but you can’t use the information against her! It is your responsibility as the “end user” to know that the offense is too old. Some screening companies may simply let you know that there was a criminal “hit” instead of revealing to you that the charge was for jaywalking. The Equal Employment Opportunity Commission (EEOC) has issued guidelines, that although they are not law, they do help determine which cases the EEOC will hear in relation to accusations of discrimination. In this case, unless the job Jane is applying for can be related or affected by her jaywalking charge, it should not be held against her. Although criminals are not a protected class under Title VII per se, they are protected by disparate impact.  There is so much more to employment and resident screening than just criminal background screening. More forms and plenty more legalities. In California, for example, the Summary of Rights – which must be given to all applicants – must be given in English and Spanish, Not just offered and not just to applicants who look like or speak Spanish, but to everyone.

 As of January 2013, the Consumer Financial Protection Bureau (CFPB) will be handling many of the issues currently controlled by the Federal Trade Commission (FTC). One of the changes is that consumers wishing to dispute or file a complaint will need to contact the CFPB. The website is, by law, on the Summary of Rights under the Fair Credit Reporting Act.  Many screening companies have these forms on their websites available for you. Unfortunately, many have not been updated. As the “end user”, giving your applicant the correct information is your responsibility.

Another form commonly used is the “Adverse Action” form. This form is not just for employment nor is it only used in the case of a denial. An “adverse action” is any action which is less than optimal. If a rental applicant is approved, but with a higher security deposit, an adverse action notice must be given. If an offer to rent is not extended, an adverse action notice must be given. Check the date that your adverse action notice was last updated.  In July 2010, legislation known as the Dodd Frank act went into effect. Based on the legislation, the adverse action notice that you give to your applicants must contain certain key information:

• Credit score (if it played any part in the decision process) along with specific components of the score.
• Reason for denial or conditional approval (credit, criminal, drug test, etc.)
• Who provided the information upon which the decision was made (Experian, ABC Drug Tests) and their contact information including address and toll free telephone number)
• A Summary of your Rights under the FCRA
• A statement that the screening company provided the information regarding your credit, criminal and or rental history. The screening company took no part in making the final decision or can it explain why the decision was made. If you feel that you were the victim of identity theft or fraud, in addition to notifying the credit bureaus, you should immediately contact the Federal Trade Commission at 600 Pennsylvania Ave., Washington DC., 20580 or visit the FTC website at www.consumer.gov/idtheft  Fair Housing statement: It is unlawful to discriminate against any person because of race, color, religion, sex, marital status, national origin, ancestry, familial status or disability of that person.

If your screening company provides forms for your company: applications, notices or information, ask them when they were last updated. Ask them if they have been written by or at least reviewed by an attorney in your field. Legislation does not happen overnight, but it does happen. As the end user of the consumer reports, it is ultimately your responsibility to stay informed or at least to know that your screening company does. Fines and penalties can be severe and your company could be at risk so protect yourself and ASK!

 To learn more about disparate impact, click here: http://www.eeoc.gov/laws/guidance/qa_arrest_conviction.cfm