Category: Hiring

July 20, 2018

Polygraph Testing at Work

The Employee Polygraph Protection Act (EPPA) is a federal law that regulates the use of polygraphs, or lie detector tests, in the workplace. Under the EPPA, most employers cannot use polygraphs, including for pre-employment screening.

The U.S. Department of Labor’s Wage and Hour Division enforces the EPPA. The EPPA covers most private employers but not government agencies. Covered employers cannot require a lie detector test as a condition of employment or make an employment decision based on polygraph results.

Are Polygraphs Accurate?

Polygraphs work by recording blood pressure, pulse rates, respiration, and skin conductivity while the examiner asks a series of questions. The idea behind a polygraph is that telling the truth and lying will produce different physiological responses. However, there are no universal physiological responses associated with lying. Furthermore, many factors such as anxiety, heart conditions, cultural differences, and the influence of drugs can affect results. There have been lawsuits over the accuracy of test results. For these reasons, polygraphs are not admissible in most courts, and the EPPA strictly limits their use in employment.

Exceptions to the EPPA

The EPPA does not cover any federal, state, or local government agencies. Government agencies that use polygraph examinations include the FBI, NSA, and CIA. Many police departments also administer polygraph tests to applicants.

There are also exceptions in the private sector. The law allows certain security firms such as armored car, alarm, and guard companies, to administer polygraphs to applicants. It also allows exceptions for certain organizations associated with pharmaceuticals.

Covered employers may be able to administer polygraphs to employees under a specific circumstance. In private firms, employers may polygraph test employees whom they reasonably suspect to be involved in a workplace incident that resulted in an economic loss or injury to the organization. “Workplace incidents” include theft and embezzlement. However, some state laws may prohibit polygraph testing employees altogether.

The EPPA imposes strict standards when allowing polygraph examinations. There are specific regulations for the pre-test, testing, and post-testing phases. The examiner must be licensed if required by the state in which they will conduct the test. The examiner must also have professional liability coverage.

EPPA Penalties

In addition to the above regulations, the EPPA also requires employers to display a poster explaining the law in the workplace and strictly limits disclosure of polygraph results. An employer that violates the EPPA may incur up to $10,000 in fines for each infraction.

Polygraph Alternatives

Since employers cannot make applicants take lie detector tests, they use other means to evaluate honesty. These can include checking references and reviewing criminal records. These methods also implicate legal parameters.

Click here for more on Employment Background Checks.

July 12, 2018

Employment Background Checks

Employers conduct background checks on applicants to lessen the chance of theft and fraud, reduce costs associated with employee turnover, and ensure a safe work environment. Employers also perform background checks to prevent claims of negligent hiring, since employers have a duty to exercise reasonable care to avoid foreseeable harm in the workplace. When obtaining background checks, employers must be careful not to ignore legal requirements.

Obtaining Background Checks

Criminal history records can be obtained from court records, corrections agency records, registries or watch lists, and state criminal record repositories. Although employers can perform background checks themselves, they often hire third-party background screening organizations. These outside providers may qualify as “consumer reporting agencies” if they provide information through “consumer reports.” If so, special legal parameters apply.

The federal Fair Credit Reporting Act (FCRA) and similar state laws regulate some employment background checks. The FCRA defines a “consumer report” as “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living . . . .” Under the FCRA, consumer reports cannot include arrests that did not result in convictions.

Notice Requirements:

The FCRA imposes notice requirements on employers that vary depending on the different stages in the employment process:

Before obtaining a consumer report: Many employers wait until after giving a conditional offer of employment to request a consumer report. Employers must provide applicants with a written notice that they are seeking the report and obtain applicants’ written consent. The notice and consent must be physically separate from the employment application.
Before taking adverse action based on a report: Employers must provide a pre-adverse action letter, which includes a copy of the consumer report and a description of the applicant’s rights under the FCRA. The employer must wait five business days before officially taking adverse action.
After taking adverse action based on a report: Employers must provide a post-adverse action letter, which includes the contact information of the consumer reporting agency and a statement of the rejected applicant’s rights to dispute the accuracy of the report and offers another copy of the report upon request. The letter must state that the consumer reporting agency did not make the hiring decision and therefore cannot give the reasons behind the adverse action.

Investigative Consumer Reports

An investigative consumer report is a type of consumer report where the investigator obtains information about the applicant through interviews with individuals who personally know the applicant. The notice requirements are similar to that of consumer reports, where employers must provide notice, receive consent in advance, and provide applicants with a statement of their rights. Upon request, employers must disclose the nature and scope of the report within five days of the request. If an employer initially notifies an applicant that they will be conducting a standard consumer report but later decides on an investigative consumer report, the employer must inform the applicant of this change within three days of making this new request.

There is an exception to the FCRA when an employer uses a third party for an investigation into potential employee misconduct. In this situation, no disclosure or authorization is required. However, if an employer takes adverse action based on a report, the employer must still give a summary to the employee. The employer does not have to report the sources of information in the summary.

References

Employment references are another method of ensuring application information is accurate and avoiding negligent hiring claims. References from an applicant’s previous employer can also give insight into the applicant’s work habits and potential problem areas. However, they have become harder to obtain because many organizations have adopted policies of only confirming dates of employment and final job title. This approach helps shield companies from litigation by former employees based on the references given.

Confidentiality

Employers must keep the content of consumer reports confidential and share them only on a “need to know” basis. Organizations should only use the content of the reports for the intended purposes and securely dispose of them once the process is complete.

Consequences of Violating the FCRA

The FCRA imposes damages of $100 to $1,000 in fines for each individual whose rights were violated. But notably, class actions under the FCRA have settled for millions of dollars. Some of the most common employer mistakes are not providing a copy of the consumer report, not waiting the full five business days before taking an adverse employment action, and not obtaining proper authorization in the first place.

To learn more about employment background checks, check out our free webinar.

February 19, 2018

What Is Executive Order 11246?

Lyndon B. Johnson,
36th U.S. President

On September 24, 1965, President Lyndon B. Johnson signed Executive Order 11246, which continues to impose anti-discrimination and affirmative action requirements upon federal contractors.

The Executive Order came just a year after Congress enacted (and President Johnson signed into law) the Civil Rights Act of 1964. Title VII of that act created the first national employment discrimination protections based on race, sex, color, national origin, and religion.

Although Johnson’s executive order is the one still cited for its administrative action requirements, its impact isn’t all because of him. A number of U.S. Presidents have contributed to these legal obligations on federal contractors over the year.

What It Does

Executive Order 11246 covers federal contractors who do over $10,000 in government business in a year. It essentially has two basic functions (as amended):

Prohibits discrimination in employment based on race, color, religion, sex, or national origin.
Requires affirmative action to ensure that equal opportunity is provided in all aspects of employment.

In addition, contractors with over 50 employees and a contract of at least $50,000 must prepare written affirmative action plans. The Office of Federal Contract Compliance (OFCCP) may audit contractors to review compliance with the affirmative action requirements.

Covered contractors who do not satisfy the affirmative action requirements face many possible penalties. These can include pay awards, notices of violations, enhanced government oversight, loss of contracts, and negative publicity.

History Leading to Executive Order 11246

Executive Order 11246 was not the first Presidential action prohibiting employment discrimination.

On June 25, 1941, President Franklin D. Roosevelt outlawed discrimination based on race, color, creed, and national origin in the federal government and defense industries through Executive Order 8802. In 1943, FDR extended Executive Order 8802 to federal contractors in Executive Order 9346.

Later, Presidents Truman and Eisenhower created a Committee on Government Contract Compliance and then the President’s Committee on Government Contracts, respectively. These committees oversaw compliance by federal contractors with the non–discrimination provisions of Executive Order 8802.

On March 6, 1961, President John F. Kennedy signed Executive Order 10925. This Executive Order required government contractors to “take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color or national origin.” It also created the President’s Committee on Equal Employment Opportunity, which became the Equal Employment Opportunity Commission (EEOC) under the Civil Rights Act of 1964.

Johnson’s Executive Order 11246’s primary contribution was to make the U.S. Secretary of Labor responsible for administering the pre-existing non-discrimination and affirmative action provisions.

Later Modifications

On October 5, 1978, President Jimmy Carter consolidated all affirmative action enforcement actions under the U.S. Department of Labor through Executive Order 12086.

On December 12, 2002, President Bush amended Executive Order 11246 to allow religiously affiliated contractors to prefer individuals of a particular religion when making employment decisions relevant to the work connected with its activities. (Executive Order 13279)

Barack Obama,
44th U.S. President

President Obama most recently amended Executive Order 11246 in 2014.

In Executive Order 13665, he prohibited retaliation by federal contractors against employees or applicants who inquire about, discuss, or disclose details of their own or other employees’ or applicants’ compensation.

In Executive Order 13672, President Obama prohibited covered contractors from discriminating based on sexual orientation or gender identity.

Status Under the Trump Administration

With the shift from a Democratic to Republican White House, many questioned the impact on Executive Order 11246. Especially the Obama-era amendments.

On January 31, 2017, President Trump’s administration released a statement that Trump would not rescind Executive Order 13672 (which added sexual orientation and gender identity). However, he did rescind Obama’s companion Executive Order 13673. It had required companies seeking federal contracts to report violations of various federal laws. A federal judge had temporarily enjoined Executive Order 13673. Trump’s action mooted any further challenge to the injunction.

November 2020 Update: A return to a Democratic administration under Joe Biden will likely restore the sexual orientation and gender identity provisions that President Obama added.

Does Executive Order 11246 Cover Your Business?

Employers must know whether they are subject to Executive Order 11246, but many do not. It is a bad day when you receive an audit letter from the OFCCP. It’s much worse when you don’t have the necessary records or an affirmative action plan in place. Businesses with over 50 employees must especially confirm whether they have federal contracts that would trigger affirmative action requirements.

If your organization has any government contracts and hasn’t evaluated the impact on employment practices, now is the time to do so. Whether, and the extent to which, Executive Order 11246 applies is not always an easy question. Employers uncertain of coverage should consult with an attorney experienced with this executive order and other laws that impose affirmative action requirements.

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