In background screening, even small compliance missteps can lead to major issues. As state laws continue to change and new hiring technologies emerge, it can be more difficult for employers to stay compliant with screening and hiring regulations. In this guide, we’ve compiled some key updates and practical tips to help keep your hiring process consistent and compliant.
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AI Screening Lawsuit Highlights Potential FCRA Risk for Employers
A recent class action lawsuit against an AI company may have wide-reaching impacts for employers that use these tools for hiring. At its core, the suit argues that AI-powered evaluations should be treated like consumer reports under the Fair Credit Reporting Act (FCRA).
Filed in California, the lawsuit alleges that Eightfold AI collected information about applicants and used the data to score candidates based on “likelihood of success.” According to the complaint, candidates were not informed that Eightfold was collecting their personal data, which allegedly included social media profiles and internet activity.
The lawsuit further alleges that Eightfold violated the FCRA because it created consumer reports without giving candidates the opportunity to view and dispute information used for employment decisions.
An Eightfold spokesperson told Reuters that the platform only relies on data provided by candidates or customers.
What Employers Need to Know
While the lawsuit against Eightfold hasn’t been resolved, the case could have implications for employers in the future. If your organization uses third-party AI tools in the hiring process, consider taking these steps:
- Know what AI tools do: If you use an AI screening vendor, ask questions to understand how the technology sources and uses information about candidates.
- Review the adverse action process: When using third-party information for hiring, it’s best to make sure you’re following the adverse action process carefully. This includes providing written notification to candidates and sending an adverse action notice when taking a negative action against an applicant.
- Document your practices and oversight: As AI technology continues to evolve, be prepared to show you’ve done your due diligence when using these tools. Document your processes and maintain vendor records.
Pennsylvania: Court Decision Clarifies State Criminal History Law
A recent court decision acts as a reminder for any employer hiring in Pennsylvania: the state’s Criminal History Record Information Act (CHRIA) applies whenever you consider a candidate’s criminal history, even if the information doesn’t come from a background check report.
In Phath v. Central Transport, an applicant alleged he was denied employment after he disclosed an older conviction during the hiring process. The employer argued that the CHRIA didn’t apply because the information came from the applicant himself, not a background check report. An appeals court disagreed, clarifying that CHRIA’s requirements still apply because the company used the information to make a hiring decision.
For Pennsylvania employers, the takeaway is simple. If criminal history is part of your hiring decisions, make sure your process complies with the CHRIA, even if a candidate self-discloses a criminal record.
What Pennsylvania Employers Need to Know
If you learn about a candidate’s criminal history at any point in the hiring process, follow these steps:
- Assess the conviction: Before doing anything, take time to assess the conviction and determine whether it’s relevant to the role.
- Provide written notice: If you decide not to hire the applicant because of criminal history, you must inform them in writing under the CHRIA.
- Consider federal law: Federal law may apply in cases where you have obtained criminal history information from a background check report. The Fair Credit Reporting Act (FCRA) requires you to follow an adverse action process any time you choose not to hire an applicant based on information found in a consumer report.
Ohio: New E-Verify Act Takes Effect in March
Beginning in March, many construction employers working on commercial projects in Ohio will need to use E-Verify for new hires.
Ohio’s E-Verify Workforce Integrity Act requires non-residential construction contractors, subcontractors, and labor brokers to open an E-Verify case for every new hire. It’s designed to confirm the identity and legal working status of workers on non-residential projects, which include:
- Commercial buildings
- Highways
- Bridges
- Utilities and related infrastructure
Under the new law, employers must also keep verification records for three years after hire or one year after termination, whichever is longer.
The governor signed the bill into law in December. It takes effect on March 20.
What Ohio Employers Need to Know
Before the law goes into effect next month, take these steps to prepare:
- Confirm whether you’re covered: Review the law and determine whether your projects fall under Ohio’s definition of non-residential construction.
- Prepare to run E-Verify: If you’re covered by the law, be ready to run E-Verify for every new hire beginning March 20.
- Update subcontractor agreements: Evaluate subcontractor contracts and consider adding E-Verify compliance obligations.
- Train HR teams: Make sure your HR team understands the new E-Verify requirements and offer training to ensure consistency in the hiring process.
Build a Compliant Screening Strategy with InCheck
From emerging AI technology to new state laws, compliance requirements can change quickly. Staying ahead of these changes can help you manage risks and protect your organization.
Having the right screening partner can make a difference in your compliance efforts. At InCheck, we provide expert guidance and transparent screening services to fit your hiring process. Reach out to learn how we can partner with your business to create a comprehensive, compliant screening program.