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  • In February, the Los Angeles County Board of Supervisors passed an ordinance aimed at promoting fair employment practices and ensuring that criminal history is not an obstacle to securing employment. The ordinance added several compliance requirements to the California Fair Chance Act for employers considering the criminal history of applicants and employees in making employment decisions.

    The Fair Chance Ordinance (FCO) applies to employers with five or more employees in unincorporated areas of Los Angeles County and is set to take effect on March 28, 2024, and become operative on September 3, 2024.

    Let’s dive into a summary of the key requirements of the Fair Chance Ordinance and understand its implications for employers and job applicants.

    Background Checks

    The FCO places specific requirements on employers regarding the timing and conduct of background checks. The key points to note include the following:

    • Conditional offer requirement: Covered employers are prohibited from inquiring about criminal history before extending a conditional offer of employment unless legally required.
    • Written notice: If conducting a background check after a conditional offer, the employer must provide written notice outlining the reasons for the review and the types of information, background, or history that will be reviewed in addition to the applicants’ or employees’ criminal history.

    Employers are not allowed to ask applicants or employees to provide information regarding their criminal history before the employer’s receipt of the criminal background check report.

    Job Postings

    Under the FCO, employers must be transparent in their job postings. The following are critical requirements related to job postings:

    • Inclusive language: Employers must include language in all job postings stating that qualified applicants with arrest or conviction records will be considered for employment.
    • Legal restrictions: Job postings must specify any local, state, or federal laws that impose restrictions or prohibit hiring individuals with a specified criminal history.
    • Intention to review criminal history: Employers must specify their intention, if any, to conduct a review of an employee’s criminal history in connection with a conditional offer and include a list of all material job duties of the specific job position that may be affected by the criminal history.

    Employers are prohibited from including statements in job postings that exclude individuals with a criminal history from consideration for employment.

    Preliminary Notice And Adverse Action

    The FCO mandates a structured process if an employer intends to take adverse action based on an individual’s criminal history after the initial individualized assessment. The process includes:

    • Preliminary notice: If the employer intends to withdraw or rescind a conditional offer of employment or take any other adverse employment action, a preliminary notice must be provided to the applicant or employee, along with an explanation of their right to respond to the notice before the decision becomes final.
    • Consideration of response: The employer must consider all information and documents submitted by the applicant or employee before making a final decision or taking an adverse action.
    • A copy of the initial individualized assessment
    • Notice of the disqualifying convictions
    • A copy of the criminal background check report

    The employer must provide applicants or an employee five business days to respond to the preliminary notice of adverse action before making a final decision. In addition, the applicant or employee must be given at least 10 additional business days to either:

    • Respond to the preliminary notice if they dispute the accuracy of the background check and need time to obtain evidence for rehabilitation or mitigating circumstances
    • Present evidence of rehabilitation or mitigating circumstances orally at a meeting between the applicant or employee and the employer

    Following the applicant’s response and any submission of additional information or evidence, the employer must consider all the information and documents, whether written or oral, before making a final decision or taking an adverse action. Then, the employer must complete a second individualized assessment. If, after this second assessment, the employer makes the final decision to withdraw the conditional offer or take adverse employment action, the employer must notify the applicant or employee by regular mail and electronic mail. This notice should include the following:

    • Notice of the final decision to withdraw the conditional offer
    • A copy of the second individualized assessment
    • Notice of the disqualifying conviction
    • Information regarding existing procedures for the applicant to challenge the decision or request reconsideration
    • Notice of the applicant’s or employee’s right to file a complaint with the Los Angeles County Department of Consumer & Business Affairs

    It’s also important to note that the employer must provide the final notice of adverse action within 30 calendar days after the applicant or employee responds timely to the preliminary notice. Failure to do so may be presumed as an untimely delay and in violation of the section. To rebut this presumption, the employer must provide a written explanation justifying the delay.

    In addition, employers must maintain and preserve all records relating to the FCO for a minimum of four years after receiving an application. 

    Next Steps

    The FCO’s new requirements in Los Angeles County may make it worthwhile for business owners to consult an outside party such as a professional employer organization (PEO). A PEO like GMS can offer valuable expertise and resources to help business owners understand and adhere to the FCO, ensuring that their hiring practices align with the ordinance’s stipulations. With the support of GMS’ HR experts, business owners can confidently implement fair and inclusive hiring processes, mitigate compliance risks, and focus on fostering a diverse and talented workforce, contributing to a thriving business environment. Contact us today to learn more!

  • In the realm of California’s employment regulations, evolution is the name of the game. As of October 1st, 2023, California employers are gearing up for a significant shift in their background check and criminal history review process, thanks to the updated Fair Chance Act (FCA) regulations. If you’re an employer in California, it’s time to prepare for these new compliance obligations that could reshape how you approach hiring and make a fairer job market for everyone.

    A Glimpse Into The Fair Chance Act

    To fully grasp the significance of these changes, let’s take a step back. The California Fair Chance Act originally took effect in 2018, aiming to level the playing field for job applicants with a criminal history. It laid down the law that employers couldn’t inquire about an applicant’s criminal history until after extending a conditional offer of employment. If an employer contemplated denying an applicant based on their criminal record, they were required to conduct an individualized assessment.

    This assessment considered several key factors:

    1. The nature and gravity of the offense of conduct: How severe was the offense or conduct in question? 
    2. Time passed since the offense: Consideration of how much time had elapsed since the offense or the completion of the sentence.
    3. Nature of the job: The specifics of the job itself – was it related to the applicant’s past offense? 

    The Winds Of Change – Effective October 1st, 2023

    However, the winds of change are blowing, and the FCA is evolving. As of October 1st, 2023, employers must adapt to several important amendments to the FCA.

    Expanding the scope: The term “applicant” no longer solely applies to those actively seeking a job within a company. It now encompasses employees undergoing background checks during significant changes such as ownership, management transitions, or shifts in policy.

    Broadening the definition: The term “employer” now encompasses not only direct employers but also those acting as agents or evaluating criminal histories on behalf of an employer. This includes staffing agencies and entities tapping into worker availability lists.

    Advertisement restrictions: Employers are now forbidden from stating in job ads, postings, or applications that individuals with criminal histories won’t be considered for hire.

    Voluntary disclosure: Even if an applicant voluntarily offers information about their criminal history before receiving a conditional offer, the new regulations emphasize that employers still cannot consider such information.

    A Deeper Dive Into The Assessment Factors

    The updated regulations provide a more extensive list of sub-factors that employers must consider as part of the individualized assessment. These factors include:

    • Degree of harm caused
    • Context of the offense
    • Impact of disability or trauma
    • Age of the applicant at the time of the offense

    Requesting information

    Recognizing that most of this information isn’t readily available, employers can request it from individuals with criminal histories. However, it’s crucial to note that you cannot require this information; it’s entirely voluntary.

    The waiting period

    After sending a pre-adverse action letter, employers must wait at least five business days before making a final decision. Be aware of varying timeframes based on the method of delivery.

    Rehabilitation and mitigating circumstances

    Under the FCA, employers must consider evidence of rehabilitation and mitigating circumstances. The new regulations outline a broad list of examples employers should consider, underscoring the importance of second chances.

    Preparing For Change

    As the clock ticks toward October 1st, California employers must prepare for these shifts in the FCA. Begin by revising your background check policies for compliance and ensuring all individuals involved in the applicant screening and background check process are educated about these changes.

    These changes aren’t just about legal compliance; they represent a significant step towards a more inclusive and equitable job market. Embracing these shifts ensures you’re on the right side of the law and fosters a culture of fairness and opportunity in your workplace.

    An Alternative Solution

    In the evolving landscape of California’s employment regulations, adapting to the FCA updates is necessary for every conscientious employer. While the law sets forth essential guidelines for fair hiring practices, it also presents challenges in terms of compliance.

    An alternative solution that businesses can consider, especially when dealing with the intricacies of background checks and criminal history assessments, is partnering with a professional employer organization (PEO). PEOs like GMS specialize in HR and employment-related matters, providing comprehensive support that includes navigating complex regulations, managing compliance, and streamlining the hiring process. Partnering with GMS allows business owners to ensure they meet the requirements of the FCA while focusing on their core operations, ultimately fostering a more inclusive and equitable workplace. Contact us today!

  • In today’s hyper-competitive job market, employers are racing to secure the best talent swiftly. As a result, the need for speed in every aspect of the hiring process has become more pronounced, including background screening. However, this relentless pursuit of speed may inadvertently overshadow the vital aspect of accuracy. Let’s explore the challenges and consequences of prioritizing speed over accuracy when choosing a background-screening provider and why striking the right balance is crucial for the long-term success of any organization.

    The Need For Speed: A Pressing Imperative

    In a rapidly evolving business landscape, time is of the essence. Employers face mounting pressure to fill positions, stay ahead of competitors, and keep pace with changing market demands. Consequently, background-screening providers are increasingly marketed based on the promise of rapid turnaround times, promising quick results that can expedite the hiring process.

    The Hidden Dangers Of Prioritizing Speed Over Accuracy 

    1. Incomplete information: Opting for a background-screening provider solely based on speed may lead to incomplete information about potential candidates. Crucial details might be overlooked, leaving employers exposed to unforeseen risks.
    2. Legal and reputational risks: Relying on quick background checks can increase the likelihood of overlooking red flags in a candidate’s history, such as criminal records or false credentials. This leaves companies vulnerable to legal liabilities and damages their reputation.
    3. High employee turnover: By prioritizing speed over accuracy, employers might hire candidates who are not a good fit for the role or the company culture. This can lead to high employee turnover rates, hampering organizational growth and productivity.

    The Quest For Balance: Redefining Priorities 

    1. Reevaluating criteria: Employers should reassess their screening criteria and identify critical information for decision-making. This way, they can streamline the screening process while ensuring that essential details are not missed.
    2. Partnering with reliable providers: Instead of blindly opting for the fastest provider, employers should prioritize working with reputable screening agencies with a track record of accuracy. A trusted partner will deliver timely results without compromising quality.
    3. Leveraging technology: Embrace technology-driven solutions that combine speed and accuracy. Automated systems can expedite the process without sacrificing the thoroughness of the investigation.
    4. Conducting comprehensive interviews: Supplement background checks with in-depth interviews to gain insights into candidates’ personalities, values, and work ethics. This holistic approach ensures a more thorough evaluation of potential hires.

    Embracing The Long-Term Vision

    While the desire for speedy results is understandable, employers must recognize that hasty decisions may have far-reaching consequences. Investing time and effort in choosing the right background-screening provider can lead to better hiring choices, improved retention rates, and a stronger organizational culture.

    A PEO May Be The Solution

    As employers navigate the ever-changing landscape of talent acquisition, it’s essential to strike the right balance between speed and accuracy in background screenings. While quick results may seem attractive in the short term, the long-term benefits of thorough and accurate background checks cannot be underestimated.

    In the quest for accurate background checks that relieve business owners of their responsibility, a professional employer organization (PEO) like GMS stands as a valuable partner. By partnering with GMS, businesses can confidently delegate the responsibility of conducting meticulous background screenings to experts who specialize in the field. A PEO’s wealth of experience, access to advanced screening technology, and compliance with evolving regulations ensure that the hiring process remains swift and precise.

    Amber Mora, GMS’ HR Account Manager, explains, “When partnering with GMS, our clients save a significant amount of time because all they have to do is send over the candidate information, and our recruiters handle the rest. They securely input the information into the software we use for background checks called CrimCheck. The completed results are then sent back to the client. Should the client decide not to move forward with a candidate, we can submit the adverse action process on their behalf so they don’t have to worry about it. Ultimately, we make it easy for our clients to have background checks completed.”

    Embracing a PEO empowers business owners to focus on their core objectives, securing the knowledge that reliable professionals bolster their workforce. In the dynamic landscape of modern business, GMS’ support can be the key to building a thriving and ethically responsible organization. Get a quote from us today!

  • If your employee injures a co-worker or customer while on the job, your company might be on the line.

    Employers can face negligent hiring charges if a hiring decision results in an employee injuring or harming any person they come in contact with through the job. Not only can negligent hiring result in exorbitant financial costs, but it can also damage the organization’s reputation.

    According to Clint Robison, a partner at Hinshaw & Culbertson, employers lose negligent hiring cases 75% of the time, and the average settlement of such claims is $1 million.

    Negligent Hiring

    There are many elements needed to form the basis of a legal action for negligent hiring or retention. They include:

    • Existence of an employment relationship.
    • Employee’s incompetence.
    • Employer’s actual or constructive knowledge of such incompetence.
    • Employee’s act or omission causing plaintiff’s injuries.
    • Employer’s negligence in hiring or retaining the employee as the proximate cause of plaintiff’s injury.

    Does Outsourcing HR Functions Mean You Lose Control of Your Business?

    Duty of Care and Foreseeability

    The key standards assessed by the courts in a negligent hiring claim are duty of care and foreseeability.

    Duty of Care

    For the employer, there is “the requirement to act toward employees and the public with reasonable watchfulness, attention, caution, and prudence as dictated by the circumstances. If an employer’s actions do not meet this standard of care, then the acts could be considered negligent, and any damages resulting may be claimed in a lawsuit for negligence”.

    The courts commonly assess two things when determining an employer’s duty of care:

    1. Does the employer owe a duty of care?
    2. How much care does the employer owe?

    Employers are expected to take reasonable care .The level of care depends on the nature of the job and the severity of the risk to third parties.

    Foreseeability

    An act is reasonably foreseeable if the employer knew or should have known that the employee had a propensity to engage in similar criminal, wrongful, or dangerous conduct.

    Negligent Hiring Cases: Employer Found Guilty

    There are vast amounts of negligent hiring cases in which the employer was found guilty.

      • A nursing home was found liable for $235,000 for the negligent hiring of an unlicensed nurse with numerous prior criminal convictions who assaulted an 80-year-old visitor. (Deerings West Nursing Center v. Scott)
      • An employee with a criminal record sexually abused a child and his employer was found liable for $1.75 million for negligent hiring and retention. (Doe v. MCLO)
    • A vacuum cleaner manufacturer was found liable for $45,000 because one of its distributors hired a door-to-door salesperson with a criminal record who raped a female customer in her home. (McLean v. Kirby Co.)

    Compliance with the EEOC

    Employers should demonstrate due diligence and the duty of care by performing background checks on potential employees. Criminal background checks can be used as tools for employers to determine foreseeability with regard to employment decisions.

    However, the Creative Commons Attribution 2.0 Generic license.

  • In a former life I was a general manager. A large part of my position was screening and interviewing potential new hires. This important yet time-consuming process included:

    1. Phone screening
    2. Background checks
    3. Scheduling initial interviews
    4. Clearing my schedule to make time for interviews
    5. Conducting interviews

    …you get my point.

    Recruiting Takes Major Time

    My assistant managers and I would spend between 1 to 3 hours each week on these administrative functions, depending on the season. That averages out to 100 hours over the course of a year.

    During this entire time I was unaware of the HR and recruiting assistance offered by a professional employer organization (PEO) such as Group Management Services Inc., which would have cut those hours by more than half.

    Saving time – sounds good right? It gets even better.

    Finding the Best Candidates

    In a recent Inc. article, Ed Powers shares this insight about initial recruiting efforts:

    “Get a big funnel. You don’t want to be overwhelmed with candidates who all look the same, but you do want to have enough candidates so that you can be selective within a large pool. Reaching out beyond your usual go-to sources can uncover skilled candidates you may not have realized were out there.”

    When recruiting to add to your team, it’s important to:

    • Have a larger reach of candidates
    • Ask consistent questions
    • Fully comply with EEOC and labor laws

    Who can consistently meet those criteria: your HR recruiting professional from GMS, or you?

  • A good background check is a protective measure that allows employers to make a fully-informed decision on a job candidate. Whether your business is hiring for an entry-level position or for a position of trust, these checks will help you identify potential issues up front as opposed to leaving unpleasant surprises in the future.

    There are several components to a good background check. Each of these parts provide different bits of information to help employers gain a better understanding of who an applicant is and if there are any issues. However, you also need to make sure that you’re following legal guidelines while you investigate candidates’ backgrounds as well. Keep reading for a breakdown on background checks for small businesses.

    How To Maintain Background Check Compliance

    In general, background checks are regulated by the Fair Credit Reporting Act (FCRA) and the Equal Employment Opportunity Commission (EEOC). One FCRA requirement is that you notify job candidates that you will perform a background check and have them sign off on this before you can turn to a Consumer Reporting Agency (CRA) to begin any checks or searches.

    The FCRA also requires employers to take certain steps if they decide not to hire, promote, or retain a job candidate, also known as adverse actions, due to information uncovered in a background report. First, an employer must notify the subject of the background check. This can be done orally, in writing, or electronically. Second, an employer must provide this person with an adverse action notice. According to the Federal Trade Commission, this notice includes:

    • The name, address, and phone number of the consumer reporting company that supplied the report
    • A statement that the company that supplied the report did not make the decision to take the unfavorable action and can’t give specific reasons for it
    • A notice of the person’s right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if the person asks for it within 60 days

    Another important detail to note is that some history may be too old to be picked up during a background check. The FCRA notes that “in most cases, a consumer reporting agency may not report negative information that is more than seven years old.”

    A small business background check for a new job applicant.

    What You Should Include In Background Checks

    A comprehensive background check should account for a variety of red flags. Small businesses should consider including the following types of checks whenever they investigate a potential employee’s background.

    Social security validation

    Tracing a social security number is a good place to start a background check. This process allows employers to complete a couple of key tasks:

    • Verify that a candidate’s social security number is legitimate
    • Uncover any additional aliases or name variations used by the candidate in the past, along with dates of birth and addresses associated with the number

    These details can help uncover any criminal records or other unsavory information that wouldn’t normally fall under the name given by the candidate. Traces can be performed through the Social Security Number Verification Service.

    Criminal records check

    If an employee has a criminal history, you’ll want to know. There are three variations of criminal records checks that will provide insight on whether an applicant has been in trouble with the law.

    • National Criminal Record Database (NCRD) search – The NCRD houses millions of searchable criminal records and sex offender registries, which can quickly point out any red flags. While an NCRD background check is a good starting point, these screenings may not include every jurisdiction or not offer enough detail for your needs.
    • Statewide criminal records check – These checks narrow down your search to a specific state, which can offer more detailed information about any potential felonies or misdemeanors.
    • County criminal records check – While county criminal background checks cover the smallest geographic area, they can offer the greatest amount of detail, including the places that an applicant with a criminal record has lived or worked.

    Employment history

    According to CNBC, 78% of candidates either misrepresented themselves on their application or would consider lying on their resume. An employment history check can help you verify job titles, dates of employment, the reason someone left a job, and rehire eligibility. Employer verification can be done through a CRA and calling a candidate’s references.

    Motor vehicle report

    This report allows employers to verify a candidate’s driver’s license verification and review driving records. According to the DMV, this information can include:

    • Past and current driver’s license statuses including suspensions, revocations, and cancellations
    • Driver’s license class
    • Special driver’s license endorsements
    • Any restrictions on your license
    • Traffic violations, such as:
      • Traffic citations
      • Vehicular crimes
      • Accident reports
      • Driving record points
      • DUI convictions

    This information is crucial for employers hiring a driver, although it can be insightful for any other job candidates as well. Motor vehicle screening services can be completed by a consumer reporting agency or through your state’s driver’s license agency, which can be found via the DMV.

    U.S. terror watch list check

    In addition to criminal records, background screenings can also include a review of the U.S. terror watch list. Third-party checks can compare candidates to various government watch lists, which can be important for any jobs where security is involved.

    Drug testing

    While drug testing is not technically a part of a background check, it’s commonly done in conjunction with pre-employment screening. In addition, past drug-related offenses can also surface during criminal record checks.

    There isn’t a single, comprehensive law that covers drug testing, so you’ll need to review your state’s specific drug testing regulations for specifics on what is and isn’t restricted. The American Civil Liberties Union keeps a list of each state’s regulations online.

    How To Run A Background Check

    Running a background check is a multi-part process that requires some initial planning and consistent application. The following five steps will help your company lay the groundwork for pre-employment background checks.

    1. Have a background check policy in place

    A written background check policy makes it easier for companies to lay out guidelines for a fair, consistent process. This policy should include the following details:

    • Which background checks your company will conduct
    • How and when the company will conduct these screenings
    • How the results of these check will be used in employment decisions
    • The responsibilities of the hiring managers and HR team when it comes to the screening process

    2. Choose a background check partner

    There are several professional background check companies that provide screening services, but not all of them are right for your business. Narrow your search to FCRA-compliant partners who can scale with your business and offer a range of screenings that will help you make the most informed hiring decision.

    3. Notify candidates of the background check

    As mentioned above, it’s essential to notify candidates of any background checks. Employers must also give candidates the aforementioned adverse action notice and have them sign a release form for any screenings before they begin.

    4. Allow for explanation

    If a candidate’s background check uncovers some information that would impact your offer of employment, give them a chance to clear any mistakes or explain the situation. Employers are required to allow candidates to review their background check results and file a dispute with the screening service if they choose to go that route.

    In addition, there are candidates who simply want to be honest and open about their past. For example, an applicant with a past misdemeanor could have learned from their mistake and be a great fit. That decision comes down to the employer, but it’s important to give employees the ability to exercise their FCRA rights before you make a call either way.

    5. Make a decision

    Once you have all the necessary information, it’s time to make the best call for your company. If the candidate is the right fit, then you’re all set to make an employment offer and prepare for the onboarding process.

    How Long Does A Background Check Take?

    On average, a typical background check is completed in three to seven days. There are times when checks are delayed due to incomplete or inaccurate check request forms or release forms. However, the majority of checks should be complete within a week. One exception is that any FBI checks can take around 30 days, but most jobs won’t require that type of timeframe.

    Can A Background Check Be Done Before A Job Offer?

    While background checks are traditionally done after an employer selects a final candidate, there is no federal law that prevents employers from running checks before an employment offer is made. There are certain state laws that dictate when you can run background checks during the hiring process, along with which types of checks are allowed. Make sure to check your local laws before if you want to test early background checks.

    Protect Your Business with Proper Background Checks

    While we highlighted several areas that should be included in a background check, there are several other areas that may be important depending on the nature of a business. Financial institutions may want to run a credit report. Other companies may want to verify an applicant’s educational degrees and school history. The answers to these inquiries are crucial, as a bad hire can lower morale, hurt company productivity, and cost as much as three times the salary of the person being replaced.

    Regardless of how much an employer decides to include, a thorough background check is a complicated process that can pull business owners away from other important tasks. As a Professional Employer Organization, GMS has the human resources experts to manage the background check process and many other critical HR functions. Contact GMS today to talk to one of our experts about human resource outsourcing and how it can save you time and money.