Viewpoint: 6 Compliance Considerations When Implementing a Continuous Monitoring Program

By Nick Fishman August 27, 2019
Viewpoint: 6 Compliance Considerations When Implementing a Continuous Monitoring Program

​The screening industry has been trying to move its clients—employers—to recurring screening (or continuous monitoring) for well over a decade, and it finally looks like we've reached the tipping point where technology can match the promise.

Continuous monitoring is a true game-changer for employment screening, and I firmly believe that it will add immeasurable value to any employer, particularly those in regulated industries. These real-time incarceration alerts are an early indicator of risky employee behavior that could potentially threaten a business and its employees. Incarceration alerts equip employers with the knowledge needed to mitigate business risks that stem from an employee's criminal activity.

As we all know, even with the promise that accompanies such innovation, there comes a certain degree of questioning—especially when it comes to background screening, which is highly regulated. This need for thorough evaluation on behalf of employers by their legal counsel is understandable and prudent. I think it's fair to assume that many employers will seek a maximum level of understanding about implementing a continuous monitoring program while remaining compliant with the Fair Credit Reporting Act (FCRA), Equal Employment Opportunity Commission (EEOC) guidance and applicable state laws.

[SHRM members-only toolkit: Managing Workplace Monitoring and Surveillance]

The bottom line is that continuous monitoring programs can make workplaces and communities safer. With that in mind, I have compiled six key compliance questions that employers should answer when they consider implementing a continuous monitoring program.

Please note that I am not an attorney; this is not legal advice. As always, I urge you to consult with legal counsel as you explore any solution that is subject to regulation.

1. Do you need to amend your hiring and employment policies?

Most likely, yes. The question then is what specific language you will need within such policies that articulates your organization's data use. Legal counsel should advise you in light of jurisdictional regulations. For example, you may be advised to list the types of criminal activities being monitored, or you may need to document the spectrum of disciplinary options employees will be subject to in the event of an arrest or any other concerning record.

2. How and when do you need to seek authorization and consent?

The federal FCRA states that employers have a responsibility to seek the subject's consent prior to the commencement of a background check. And while there are various state laws that dictate the language required on such an authorization form, most employers do not find difficulty in managing that responsibility.

Now, many jurisdictions allow employers to insert evergreen language in their authorization form that allows them to conduct background checks throughout the tenure of one's employment. However, there are also a number of jurisdictions that specifically preclude this practice. For instance, California requires that an employer seek authorization from the subject of a report each time a background check is conducted. In other jurisdictions, an employer must seek new authorization after a predetermined amount of time has passed since the last date of consent.

Given the variance in state and local laws across the nation, employers are again encouraged to understand the unique requirements of the jurisdiction(s) in which they operate and to develop policies and procedures that comply with the specific laws that govern that region. This may include the development of an additional consent form that is specific to continuous monitoring, administered at regular intervals, to comply with applicable rules.

3. How do you ensure maximum possible accuracy?

The FCRA directive to ensure maximum accuracy has been burned into our collective minds by regulators, our legal representation, and an array of litigants. Screening firms and, by extension, employers, have an obligation to ensure that the information used to make employment decisions is accurate at the time of reporting. Given the weight of such information, it would be important to understand the following:

  • Do incarceration records provide the proper identifiers necessary to comply with the FCRA and for employers to act on—whether that action is probation, suspension or termination?
  • Is the status of an incarceration subject to change with such rapidity that what is reported today is likely to change before an employer acts? For instance, what if I rely on an incarceration alert I receive today and use that report to make an employment decision—but the charges are dropped or amended to lesser charges tomorrow. Can that present significant risk for me?

For both of these considerations, industry best practices advise employers to always investigate the alert. This is very important. Criminal activity, including incarceration, should always be investigated, pursuant to well-articulated, pre-existing policies and procedures, to verify whether the behavior leading to the arrest justifies disciplinary action.

The EEOC and the legal community generally agree: An employer cannot act or base employment decisions solely on arrest or incarceration records. However, a record alert may trigger an independent investigation into the details and circumstances surrounding the event. Upon completion of an independent investigation, the employer may make its disciplinary decisions regarding the subject employee.

4. Can you limit the information you see?

Yes. Certain employers are only interested in a specific subset of criminal activity. For instance, a financial services company may not be as concerned about a DUI arrest as they would be if an employee engages in criminal activity related to theft or dishonesty. A bus company, on the other hand, has a vital interest in knowing that one of its drivers was booked for DUI. Therefore, employers are able to customize their alerts if they so choose, only receiving a notification when their employees are booked under certain charges.

5. Can you take action on an incarceration record?

As discussed above, employers should make sure that they are extending proper due process to employees. Is an arrest enough to cover the spectrum of employment decisions that can be made—such as suspension with or without pay, discipline or termination? Again, always investigate the alert. These flags serve as risk indicators. They're pointers. No employment decision should be made without a thorough, independent investigation.

6. What notifications do you need to provide?

When an employer finds criminal activity on a pre- or post-hire background check that causes it to reject a candidate or take disciplinary action including termination of employment, it must follow the FCRA-mandated adverse action process. This process provides applicants and employees the opportunity to review and dispute information in the report if they so choose. Employers' legal teams should determine how this regulation applies to a continuous monitoring platform and what notifications are necessary should the employer ultimately suspend, discipline or terminate an employee.

Nick Fishman is an HR technology and background screening expert and the president of Fishman Group Consulting in Chicago.


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