Security, Human Resources, Background Checks and the Law: ROI

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Security, Human Resources, Background Checks
and the Law ROI

• ASIS International 2000
• 46th Annual Seminar Exhibits
• 9/11/00 - Orlando, FL
• M. K. Poquette

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Security Products

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Security Products
Worldwide Security Spending 1998 512
Million 2003 2.24 Billion Source
International Data Corp
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• PREMISE 1
• Security ROI is compromised unless measures
  include background checks.

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CCTV Security Guards Locks Power Supplies
Transmission Systems Vaults Computer
Software Bar Coding Pagers Fences/Gates/Guard
Booths Voice Evacuation Systems X-Ray
Alarms Iris Recognition Intelligent Key
Systems Metal Detectors Intrusion Detection
Fire Protection Equipment Bio-metric Access
Buried Sensors Night Vision Equipment
In-fared Cameras Two Way Radios
Bullet-Resistant Barriers Digital Recorders
Video Signal Equipment
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CCTV Security Guards Locks Power Supplies
Transmission Systems Vaults Computer
Software Bar Coding Pagers Fences/Gates/Guard
Booths Voice Evacuation Systems X-Ray
Alarms Iris Recognition Intelligent Key
Systems Metal Detectors Intrusion Detection
Fire Protection Equipment Biometric Access
Buried Sensors Night Vision Equipment Infared
Cameras Two Way Radios Bullet-Resistant
Barriers Digital Recorders Video Signal
Equipment
Background Checks
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Human Resources, Background Checks and the
Law ROI

• Security,

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Human Resources, Background Checks and the
Law ROI

• Security,

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• PREMISE 2
• Security ROI is compromised unless measures
  include background checks.
• Security expertise needed in background check
  program

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Human Resources
Security
Back-ground Checks
The Law
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Human Resources
Security
Back-ground Checks
The Law
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Human Resources
Security
Back-ground Checks
The Law
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Objectives

• Protection
• Employees and Clients
• Assets
• Liability

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Direct Cost

• NEGLIGENT HIRING
• . . . more than half the awards in recent
• security negligence cases have exceeded
• 100,000.
• HR Magazine, 6/00
• Looking for Chinks In the Armor.

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Direct Cost

• THEFT . . . The stores had become a haven for
  ex-felons and thieves.
• . . . Almost all of the thieves
  were
• gaining employment at a xxxxx
• store for one premeditated reason
• -- to steal.
• Security Management Magazine, 11/99
• Stop Insiders from Eating Profits.

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Direct Cost

• COMPUTER CRIME
• Average Cost Per Hacker Incident
• Outside Hacker 56 Thousand
• Inside Hacker 2.7 Million
• Security Management Magazine, 12/99
• Inside the Mind of the Insider.

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Direct Cost

• NEGLIGENT HIRING
• . . . awards average about 500,000 in
• cases where an individual is assaulted at a
• place of business.
• HR Magazine, 6/00
• Looking for Chinks In the Armor.

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Objectives

• Protection
• Employees and Clients
• Assets
• Liability
• Add Value

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Screening

• One of the most significant missed opportunities
  in security departments is related to the
  screening of applicants for employment.
• Security Management Magazine, 12/99
• How Can Security Get Inside the Door?

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Screening

• . . . the most probable and most significant
  loss prevention tool in the future will be the
  use of better employee-selection techniques.
• Security Management Magazine, 4/00
• An Inventory of Whats in Store.

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Indirect Cost

• SELECTION, TRAINING, START-UP
• 50 - 150 of annual salary

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Screening

lt100
lt50
lt10
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Recommendations

• PROACTIVE INVOLVEMENT
• Utilize security expertise
• Design/implement screening program
• Participate in vendor selection
• Obtain legal approval
• Audit processes and on-going results.

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Recommendations

• COMPREHENSIVE
• All Staff
• Employees, including executives
• Temporary Staff
• Contractors

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Security Expertise

• Pragmatic view
• Knowledge of criminal record system
• Enterprise-wide security view
• Part of executive management
• Minimize Legal Department objections
• Position background checks as critical security
  component

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• PREMISE 3
• Security ROI is compromised unless measures
  include background checks.
• Security expertise needed in background check
  program
• Program must be legally compliant and defensible.

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Implementation

• OBTAINING AND USING SCREENING INFORMATION
• Equal Employment Opportunity Laws
• Fair Credit Reporting Act (FCRA)
• (Federal State versions may apply.)

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FCRA

• 04/25/71 - Fair Credit Reporting Act
• 09/30/97 - Consumer Credit Reporting
• Reform Act of 1996
• 11/02/98 - Consumer Reporting
• Employment Clarification
• Act of 1998

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FCRA

• CCRRA of 1996
• FCRA governs all background checks done for
  employment purposes by a third party for which
  third party is paid.
• Applies whether or not credit is included in
  background check.
• State law may add more requirements.

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FCRA

• KEY DEFINITIONS
• Background checks
• Consumer Report (CR) or
• Investigative Consumer Report (ICR).
• Background-checking provider Consumer Reporting
  Agency (CRA)
• Employment purposes
• Employment, retention, or promotion

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FCRA

• KEY DEFINITIONS
• Adverse Action
• Not hiring, retaining or promoting applicant
  based in whole or part on information in
  background check.
• Excluded Information
• Any adverse item of information, other than
  criminal convictions, older than 7 years
• Some exceptions apply.

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Screening Process

• CERTIFICATION
• Employer signs User Certification with CRA
• CRA provides employer with
• Notice to Users of Consumer Reports
  Obligations of Users Under the FCRA.
• Note One-time steps.

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Screening Process

• CERTIFICATION
• Employer agrees in User Certification to
• Use information only for employment purposes
• Use information only in legal ways
• Make disclose to applicant and obtain
  authorization
• Follow adverse action procedures
• Note Exact language not specified.

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Screening Process

• INTERNAL PROCEDURES
• Standardize checks by position
• Applicable to position
• Use and impact of key identifiers
• (Date of birth and other names used)
• Define action based on information green,
  yellow, red criteria.

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Screening Process

• INTERNAL PROCEDURES
• Use of contingency offers
• Applicants continuation, suspension, or
  termination in employment process.
• Adverse action process, time lines.
• Effect of adverse information.

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Screening Process

• WITH APPLICANT
• Make Clear and conspicuous disclosure in a
  document that consists solely of the
  disclosure.
• Obtain signed authorization from applicant.
• 10/21/97 FTC Opinion Disclosure and
  authorization may be combined.
• Obtain applicants key identifiers. (SSN, DOB,
  other names used)

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Screening Process

• TO CRA
• Provide applicant information to CRA
• Employment Application
• Authorization
• Key Identifiers
• Possession by CRA not legally required, but
  practical considerations apply.

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Screening Process

• WORKING WITH RESULTS
• Apply pre-determined criteria and procedures
• (Green, yellow, red light)

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Screening Process

• ADVERSE ACTION
• Notify applicant before taking action
• Provide time to dispute and correct
• Provide copy of report and A Summary of Your
  Rights under the Fair Credit Reporting Act
• Provide adverse action notification
• Obtain applicants key identifiers. (SSN, DOB,
  other names used)

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Screening Process

• INTERNAL INVESTIGATIONS
• FTC opinion
• Authorization required
• Hearings in process
• Authorization effective throughout employment

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Screening Process

• ROLE OF THIRD PARTY
• Provides background information.
• Meets or exceeds service commitments.
• Provides expertise.
• Is legally compliant.
• Applies technology to improve product and
  process.

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Technology

• BACKGROUND CHECKING
• Information
• Accuracy
• Convenience
• Cost-effectiveness.

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Technology

• MANAGEMENT DATA
• Audit trail of all work
• Management reports
• Applicants screened
• Checks conducted
• Hit ratios
• Turnaround time
• Dollars invested

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Audit

• INTERNAL AND EXTERNAL
• Checks ordered by position
• Start date versus background screen date
• Use of adverse action procedures
• Compare vendor data to company data

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Security

• HR Magazine, June 2000.
• Agenda Security
• . . . balance costs
• and risks . . .
• HR Magazine, June 2000. Agenda Security

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Human Resources
Security
ROI
Back-ground Checks
The Law
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• QUESTIONS?