DOL Seeks Comments on Joint Employer Proposed Regulation

Apr 15, 2019
The Department of Labor (DOL), in its first meaningful revision since 1958 to its joint employer regulation, announced a proposed rule to change how joint employer status is determined going forward.  This is of particular importance to the franchise industry, where franchisors strive to not be considered a joint employer. The DOL proposal has a four-factor test that evaluates whether a potential joint employer exerts control to: Hire or fire the employee Supervise and control the employee's work schedules or conditions of employment Determine the employee's rate and method of payment, and Maintain the employee's employment records. Included in the DOL proposal are examples that further clarify joint employer status.  One example in particular depicts Franchisor A – a global hospitality brand with thousands of hotels under franchise agreements –  and Franchisee B who owns one of the hotels as a licensee of A's brand.  Even though Franchisor A provides Franchisee B with a sample employment application, sample employee handbook, and other forms for operating the franchise, because the licensing agreement states that Franchisee B is solely responsible for all day-to-day oper…

Why Your Employee Screening Disclosure Must Be “Clear and Conspicuous”

Mar 13, 2019
Last month I wrote about the Ninth Circuit Court of Appeals' ruling in Gilberg v. California Check Cashing Stores, and the significant impact it may have on determining if an Employee Screening Disclosure and Authorization (D&A) form is compliant.  The possible consequences are so severe, I am writing about it again. The FCRA – Fair Credit Reporting Act – the federal law that governs employee screening – imposes a statutory fine of up to $1,000 per individual for technical violations of this law.  When class action lawsuits are filed, the law allows a five-year look-back period to see how many applicants applied (not just those who were hired) with incorrect disclosure forms. This is why these class action lawsuits for technical violations of the FCRA become theoretically so expensive, attracting predatory plaintiff attorneys who develop law practices that primarily pursue these cases.  This affects even smaller companies, as hundreds of people usually apply for any job posting, and class action lawsuits go back five years.  One hundred applicants represent a $100,000 fine… one thousand applicants, a $1 million penalty – devastating amounts for most small businesses. Further…

Is Your Employee Screening Disclosure and Authorization Form Still Compliant

Feb 23, 2019
Just a few weeks ago, the Ninth Circuit Court of Appeals issued a ruling in Gilberg v. California Check Cashing Stores that may have a significant impact on whether an Employee Screening Disclosure and Authorization (D&A) form is compliant. Although the FCRA (Fair Credit Reporting Act – the federal law that regulates employee screening) has not changed, case law evolves over time.  Further, predatory plaintiff attorneys seek to exploit recent (and other) case law rulings that help them file new class action law suits for technical violations of FCRA. The FCRA has always required a clear and conspicuous D&A, whose sole purpose is the background check, separate and distinct from other documents – including particularly the general employment application.  However, additional state-mandated disclosures, when included in the D&A, were historically viewed as being compliant. This Ninth Circuit Court ruling may change that.  Thus, it is advisable to review your D&A.  Specific state-mandated disclosures should be placed in a separate and distinct document.  Even if your business is not subject to the Ninth Circuit Court, the conservative approach would be to detach stat…

Preferred Partner Program to Protect Franchise Brands

Jan 28, 2019
Reliable Background Screening has introduced its Preferred Partner Program to protect franchise brands.  So often individuals invest a substantial portion of their wealth into a franchise brand – a brand that is offered to a myriad of individuals.  By vetting each new franchisee owner, both the franchise brand and all franchisee owners are best protected. The Preferred Partner Program will help franchise businesses maintain uniformity and reduce risk. The program offers franchise companies the ability to have all its franchisees use the same service for employee background checks. By working with a plethora of different and growing franchise companies, Reliable knows that hiring qualified and honest employees at the franchise level is a critical component to the success of the entire brand. Our new Preferred Partner Program was created out of a need we identified to mitigate the risk a bad hire can present to the franchise company network. Reliable Background Screening's services include offering best practices, up-to-date background checks on potential and active employees to protect against negligent hiring and retention lawsuits, reduce risk, and increase overall profitabilit…
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