Background Checks for Employment and Personally Identifiable Information

California has a unique set of rules for background checks for employment that go beyond the other 49 states and the federal Fair Credit Reporting Act (FCRA). If you’re an employer in California, it’s important to follow the rules to the letter, since applicants can sue for up to $10,000 for any violation—regardless of actual damages caused! Additionally, California has added two more critical rules related to background checks that started January 1, 2012.

Employers in California – and employers doing business in California – need to be aware of these two new laws which will change the way employers conduct employment screening background checks in the state:

• Senate Bill 909 (SB 909) relates to the “offshoring” of Personally Identifiable Information (PII) of consumers who are the subjects of background checks.
• Assembly Bill 22 (AB 22) regulates the use of credit report checks of job applicants and current employees by employers for employment purposes.

In a CER webinar titled ” Background Checks in California: Recently Passed Legislation, How to Legally Use Credit Inquires, and More,” Lester S. Rosen outlined these laws for us. We’ll discuss SB 909 here.

SB 909 Basics

California Senate Bill 909 (SB 909) requires disclosures to be made to consumers before their Personally Identifiable Information (PII) such as Social Security Numbers (SSN) is sent offshore/overseas, including whether the consumer’s PII will be sent outside the country. This is especially relevant for someone running background checks for employment, since some agencies may utilize offshore firms.

It appears to be the first law in the nation that addresses the issue of personal information being sent offshore (i.e. outside the United States or its territories and beyond the protection of U.S. privacy laws).

3 Requirements for SB 909 Compliance

If you conduct background checks for employment and your employees’ PII may be sent offshore, how can you be sure you’re in compliance with SB 909? In short, there are three requirements Rosen noted that SB 909 ” requires every California employer – or every background firm doing business in California – to have modified the consent authorization form, to have modified the front page of the website, and to have modified their privacy statements.”

Here are more details on the three requirements:

SB 909 Item One – Notification to Consumers. CA SB 909 requires that a consumer must be notified (as part of a disclosure before the background check) of the web address where that consumer “may find information about the investigative reporting agency’s privacy practices, including whether the consumer’s personal information will be sent outside the United States or its territories.” If a background screening firm does not have a web site, then the background screening firm must provide the consumer a phone number where the consumer can obtain the same information.

SB 909 Item Two – Consumer Reporting Agency (CRA) Privacy Policies. The CRA must conspicuously post its privacy policy on its primary website. The privacy policy must describe its privacy practices with respect to its preparation and processing of investigative consumer reports such as background checks for employment. Specifically, background screening firms in California (and firms that do business in California) must have a statement in their privacy policy titled “Personal Information Disclosure: United States or Overseas” that indicates whether the personal information will be transferred to third parties outside the United States or its territories.

SB 909 Item Three – Separate Contact Info Section. SB 909 also requires a separate section that includes the name, mailing address, e-mail address, and telephone number of the investigative consumer reporting agency representatives who can assist a consumer with additional information regarding the investigative consumer reporting agency’s privacy practices or policies in the event of a compromise of his or her information.

To register for a future webinar, visit CER webinars.

Lester S. Rosen, the founder and CEO of Employment Screening Resources, is a consultant, writer, and frequent presenter nationwide on pre-employment screening and safe hiring issues.