March 29, 2016 | Insights

Compliance Critical in Background Checks for Drivers

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The latest figures from security services provider FreightWatch International recorded 754 cargo thefts throughout the United States in 2015, with an average value of $184,101. There are various ways cargo thieves plan and accomplish their attacks, one of which often involves paying drivers at rest stops or fueling stations to give up their trucks, or waiting until the driver has left the truck and trailer unattended. These thieves, who are knowledgeable and trained in gaining access to the truck and manipulating the ignition system, then drive off with the stolen cargo. Logistic service providers and shippers can work to stem these types of losses with rigorous pre-employment screening and driver background checks, but it’s critical when conducting these checks that you remain in compliance with federal and state laws.

Employee background checks are best conducted by companies that specialize in this area, as they will comply with the Fair Credit Reporting Act (FCRA). Under the FCRA, an employer must get the job candidate’s consent to conduct the search before it is started and provide that person with the opportunity to review the report when it’s completed.

The type of information employers can request as part of the background check include the following: misdemeanor and felony criminal records at the county, state and national levels;  sex-offender status; Social Security number trace and validation; employment verification; education verification; professional license verification; reference checks; credit checks; civil record checks; motor vehicle records check; military records verification; and address history.

Along with complying with the FCRA, employers must also ensure they are in compliance with the U.S. Equal Employment Opportunity Commission (EEOC), along with the Federal Trade Commission (FTC), when a job candidate’s background reveals a criminal record.  Although federal law does not explicitly protect applicants from discrimination based on their criminal records, it does protect against discrimination based on race and ethnicity. The EEOC and FTC in 2014 published updated guidance on employers’ use of criminal background checks to address their concern that criminal background checks have an unintended discriminatory impact on particular minority groups. The guidance essentially stipulates the following:

  • An employer must obtain prior written authorization from applicants and employees to conduct a background check.
  • You must notify applicants and employees that a background check will be conducted, describe the scope of the background check, and inform them that information received from the background check may result in adverse employment action. This notice and authorization should be on a separate page from the job application itself.
  • You must plainly notify the applicant or employee that a refusal to authorize the background check may result in adverse employment action, such as rejection of the application or termination of employment. If you intend to take adverse employment action based in any part on the results of the background check, you must give the applicant or employee written notice at least seven days in advance, and provide them with a copy of the background check and the FTC’s summary of rights under the FCRA.
  • After the adverse action is taken based on a background check report, you must issue the applicant or employee a second notice, advising them that they were not hired (or were discharged or disciplined) because of information in the report, providing the name and contact information of the company that provided the report, and providing certain additional information, including the individual’s right to dispute the accuracy of the report and to obtain a free report from the report provider within sixty days.

Moreover, some 21 states and more than 100 cities and counties have enacted ban-the-box ordinances prohibiting employers from asking about arrest records at the time of application, according to the National Employment Law Project. These measures mostly apply to public employers, however, seven states (Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon and Rhode Island) and a growing number of local governments have passed ban-the-box laws that apply to private employers also. While none of these measures prohibits checking for criminal records entirely, the laws vary as to when employers can ask about criminal history. The range includes employers being permitted to ask about criminal history any time after the initial application, after the applicant has been selected for an interview, or only after a conditional offer of employment has been made.

Additionally, what employers can ask applicants varies by state. Some laws explicitly prevent employers from asking about non-conviction arrests or expunged records at any time during the hiring process.

While employee background checks are critical in helping logistic service providers and shippers screen drivers, you can see how imperative it is to ensure that your organization is in compliance with the various state and federal laws that govern these checks. Allegations of discrimination and wrongful termination as a result of a background check finding, if not followed to the letter of the law, can result in an employment practices liability claim. Be sure to consult with an experienced attorney to provide you with advice regarding your practices.

Also, to protect against the risks involving employment-related issues, be sure you have a strong Employment Practices Liability Insurance (EPLI) program in place. This coverage provides protection against employee lawsuits, including claims of sexual harassment, discrimination, wrongful termination, negligent evaluation, failure to employ or promote, and wrongful discipline, among others.

Roanoke Trade is the leading provider of insurance and surety solutions for transportation and logistics providers and can provide you with Cargo insurance, EPLI coverage and a portfolio of other critical products to protect your firm. Please contact us at 1-800-ROANOKE (800-762-6653).

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