Carl Shusterman, Managing Partner, Law Offices of Carl Shusterman

Recruiters with their eyes on the global talent pool know that the most efficient way to recruit and employ international professionals often is through the H-1B visa. This is an employment-based, temporary visa category for foreign-born workers whose jobs require at minimum a four-year degree or its equivalent. H-1B work status is good for up to six years, and many foreign workers elect to adjust their status during that time to permanent resident. Business executives, information technology professionals, scientists, physicians, and educators are among the many types of workers who are recruited and employed byU.S.firms on H-1B visas.

While recruiting international talent is one key to success in a global economy, immigration processing costs can be substantial. For example, the cost of filing an H-1B petition may include:

*H-1B petition filing fee: $325
*Anti-fraud fee: $500
*ACWIA fee: $750-$1,500
*Premium processing fee: $1,225
*Public Law 111-230 fee: $2,000

To ameliorate these costs, some employers ask their employees to contribute toward the fees. Recruiters should be aware, however, that this is not always a wise course of action.

Federal regulations require the employer to pay the H-1B worker a wage that is equal to or higher than the actual wage or the prevailing wage for similarly employed workers.  The actual wage is the wage rate paid to all other workers in the same position with similar experience and qualifications. If there are no such examples, then the H-1B worker should be paid the prevailing wage. The prevailing wage is determined by the Department of Labor (DOL), or by the use of an appropriate salary survey or collective bargaining agreement, and is detailed on the accompanying Labor Condition Application (LCA) that is certified by the DOL and attached to the H-1B petition when filed.

By statute, the only portion of the H-1B filing fees that must be paid by the employer is the ACWIA fee of $750-$1,500 under Section 214(a)(9)(A) and (B) of the Immigration and Nationality Act.

However, if the employee pays for any other portion of the H-1B process, this amount may need to be added to his or her salary. The wage offered to the H-1B worker after his or her portion of the H-1B process has been paid must be equal to, or greater than, the actual wage of the prevailing wage, which is higher, as indicated on the LCA.

In recent years, the federal government has been more aggressive about auditing employers’ immigration related paperwork. For example, officers with the U.S. Center for Immigration Services’ Fraud Detection and National Security (FDNS) branch conduct random onsite inspections of H-1B employers as a way to verify information contained in certain petitions, including H-1B petitions.

There have been reports that among the questions asked by FDNS agents during these inspections is who paid for the H-1B process. Employers then must justify their policies and may be obliged to prove that if the employee paid any portion of the fees, that portion was added to their wages. The best way to avoid this contentious issue is for the employer to pay all of the filing fees.

What happens if the employee is asked to pay part of the filing fees and complains to the Labor Department?A Federal District Courtrecently ruled in one such case that it was the employer’s legal responsibility to pay for all the government filing fees and the attorney fees associated with the H-1B petition.

Although this ruling currently is on appeal to the U.S Court of Appeals for the 6^th Circuit, employers who pass along any of the costs involved in securing H-1B status for their employees do so at considerable risk. Recruiters are therefore advised to consult with their human resource departments to ensure that this risk is avoided.

Carl Shusterman served as a trial attorney with the U.S. Immigration and Naturalization Service (1976-82) and is principal of The Law Offices of Carl Shusterman, a firm specializing in immigration law. He can be reached at carl@shusterman.com.  

“A leader takes people where they want to go. A great leader takes people where they don’t necessarily want to go, but ought to be.”

- Rosalynn Carter

Rodney Abstone, Legal Executive and Staffing Consultant, Chicago Legal Search, Ltd.

For many years, law firms were administered by the lawyers themselves – often through part-time managing partners or management committees. As firms grew bigger and operational demands increased, law firms started to use non-lawyer administrators to take care of these details. Over the past decade, as competition increased, technology evolved and pressures for cost and operational efficiencies became greater, law firms began to introduce non-lawyer leadership in areas like finance, administration, human resources, technology, marketing, professional development and training, and strategic planning.

Today, the most successful law firms understand the need to be effectively and efficiently run like businesses – assigning responsibility for this aspect of the firm to “C-level” executives. This puts the business side of a law firm’s administration into the hands of business professionals who are trained and experienced in leading and directing the various administrative departments within a firm and can act quickly and decisively in the firm’s best interest. The end result is that experienced management professionals enable attorneys to do what they do best – practice law.

This article will provide insight into what top law firms’ business management individuals and teams should ideally look like as firms strive to be the most competitive in their practice areas and cost-efficient in running their businesses. Cost-efficiency should not, however, include cutting corners on C-level  salaries, as this would limit the pool of the most talented C-level executives. In fact, firms should be investing more in these positions so that their attorneys – the revenue producers – are doing just that throughout the business day, producing revenue.

First, your business goals should drive your business management needs. Law firms striving to provide top-quality client support should have revenue producing attorneys and a top-quality management structure in place. This concept is plain and simple – your business management team should be directly aligned with your business goals. So how do you assemble a top-notch management team?

Experienced executives have advanced degrees (e.g., MBA or higher) and/or a CPA certificate. It is not acceptable to accept anything less – and you don’t have to if you are willing to pay for top talent.

In addition to strong communication, negotiation and social skills, C-level executives should have many years of management experience at a senior level. Their experience should enable them to work comfortably with all aspects of management principles and practices. This includes financial analysis of the firm, human relations, technology integration, and the effective operation of firm facilities. C-level executives should also be familiar with all aspects of the controllership functions and have a mastery of management alternatives. Furthermore, C-level executives should have expertise in strategic and long-term planning for the dynamic growth of the firm.

As officers of the firm, C-level executives should serve on all internal committees and have a strong voice in all management discussions and decisions. Beyond simply being a good manager, C-level executives should have a strong command of people management practices and exemplify the role of a great leader.

When hiring C-level executives, you need to be very careful. Many managers have all the right work and educational qualifications, appropriate law firm experience and know exactly what to say and how to say it throughout your extensive interviewing process. However, a wrong hire, even if he/she appears to be a superstar on paper and well-versed in interviewing, can discourage your entire team and wreak havoc on your firm in a relatively short period of time.

The managerial leaders that you need to have in place must immediately click with people above, below and all around them. They must be able to fit into your firm’s culture and, if necessary, change it in a way that is in line with your business goals. They know how to navigate through a law firm partnership or similar environment where there are many owners of the business in your face every single day and, many times, who have conflicting goals and agendas.

You need to target leaders who know how to connect with and motivate people in slow, challenging and changing times. They must understand cultural and generational differences and drivers and capitalize on people’s strengths while tackling weaknesses through the creative and strategic use of other team members’ skills and experiences. They have to refrain from micro-managing, yet be able to quickly, decisively and successfully change the course of any game plan in the midst of chaos and confusion (often times found in law firms trying to meet the ever-changing and stressful demands of their clients and the attorneys servicing them). They have a knack for creating positive work environments in even the most difficult circumstances.

Lawyers, just as they are not trained and experienced at running the business, should not try sourcing qualified candidates for C-level positions. Instead, they should consider using a retained executive search firm. A common mistake many firms make is to delegate the initial screening and interviewing process for C-level executives, including law firm Executive Directors and COOs, to Human Resources Directors or HR Officers. Think about it – isn’t it a conflict, given the direct reporting relationship of the HR Director/Officer to the Executive Director, to ask your HR Director/Officer to make the first round of decisions regarding which candidates should move forward in the recruiting process? It can be uncomfortable for both the interviewer and interviewee getting through the questions crafted to determine whether the candidate is going to be the great boss that he or she wants. Firms are better served by providing an opportunity for the HR leader and any other senior managers to meet the top one or two candidates after the firm has narrowed the field to the candidate(s) that best align(s) with the firm’s expectations of a great leader. C-level leaders, because of their broad range of skills and many years of exposure to and experience with business management challenges, are able to command compensation packages comparable to mid-level partners in a firm. Partners often comment that, “If we are going to pay this much money for a C-level manager, perhaps we can do the work ourselves.” Firms then consider the option of having their managing partner(s) take on this role, delegating functional area responsibility to one or a few partners who have some time on their hands or delegating the entire responsibility to a management committee.

In response to this strategy, I share this insight: attorneys do not go to law school to learn how to manage a business. Although some attorneys, by their own choice and for personal reasons, decide to change their career path and move into the law firm management world. Putting those attorneys aside, most lawyers go to law school to become lawyers and, after years of experience, hope they become great lawyers. Why would great lawyers or lawyers who aspire to be great, want to tackle administrative management responsibilities that they are not trained for or effective at and, more importantly, considerably reduce valuable, billable time? From a firm’s perspective, if you are considering delegating management responsibility to lawyers who are not busy, why would you want to pay them high salaries to do this work when, instead, you could get a highly trained and more qualified C-level executive either at the same or lower price?

As an example, my co-author recalls a time when she joined a firm and hired her first CFO. He was holed up in his office 24/7 staring at the financials for what seemed to be two years straight – or at least until the firm felt the finances and financial goals were in order. The point is – there are people who choose to do this for a living full-time (which is the appropriate amount of time needed for such a job), love to do this and are great at doing this. There is substantial value for a firm that recognizes the significance in hiring people whose first priority is to do the job they are hired and trained to do. The same concept applies to attorneys. An attorney’s greatest work value outside of his or her actual client successes is his or her time – billable time.

It is important that firms have an effective management structure and appropriate form of leadership. The overall aim and purpose of your firm’s C-level management structure should be to help the partners realize their aspirations for the firm, in particular with regard to profitability, both in the short and long-term; to enable the partners to concentrate on the most important issues facing the firm rather than the day-to-day matters; to provide leadership and a sense of direction; to use partner time effectively; and to get things done.

We are at a pivotal moment in the evolution of the modern law firm as the competitive landscape has changed irrevocably in recent decades and models of law firm management developed in the previous century no longer apply. Therefore, managing a law firm has become even tougher, at least in those firms that aspire to be and are great market leaders.

Rodney L. Abstone II is the Director of Executive Search with CLS Executive Search and can be reached directly at (312) 251-2581 or rabstone@clsexecutivesearch.com.

 Donna Patrylak, co-author of this article, is the former COO of Lovells LLP and CAO of Piper Rudnick (now DLA Piper). She can be reached at (312) 558-5069 or donna.patrylak@klgates.com.

Lester S. Rosen, Attorney at Law & President, Employment Screening Resources

Many recruiters these days are scouring the Internet to locate and assemble a dossier on a job candidate’s online identity using so-called “social network background checks” that search sites such as Facebook and Twitter as well as blogs, videos, and anywhere else on the Internet for information on job candidates, including what they may have put online and completely forgotten about.

However, recruiters using social network background checks of job candidates face a number of challenges and issues, including:

Discrimination Allegations

A big challenge for recruiters using social network background checks is the possibility of discrimination allegations. Recruiters may be accused of disregarding job candidates who are members of protected classes by passing over the online profiles of people based on prohibited criteria such as race, creed, color, nationality, sex, religious affiliation, marital status, or medical condition – all of which may be revealed by an online search. There may even be photos showing a physical condition that is protected by the Americans with Disabilities Act (ADA) or showing someone wearing garb suggesting their religious affiliation or national origin. This issue is sometimes referred to as Too Much Information or TMI. The problem is that once a recruiter is aware that an individual is a member of a protected group, it is difficult to claim that they can “un-ring the bell” and forget he or she ever saw it.  Employers may be exposed to “failure to hire” law suits based upon discrimination or Equal Employment Opportunity Commission (EEOC) claims.

Issues with Recruiting “Passive” Candidates

Recruiters may argue that if passive job candidates – those people who are not actively looking for work – are passed over because of discriminatory criteria revealed on a social network site, they cannot be harmed since they did not even know they were disregarded and are none the wiser. The problem with that approach is three-fold:

• First, discrimination and civil rights laws would likely still apply, even in recruiting passive candidates.
• Second, there are few secrets in the world. If a firm is using discriminatory criteria, a member of the recruiting team who feels uncomfortable about such a practice may say something either publicly on the web or within the organization.
• Third, it can be argued that discriminatory criteria were being used if it turns out that the entire workforce happens to be homogeneous and does not include members of protected classes. Such a statistical anomaly could suggest a pattern of discrimination.

Authenticity, Credibility, and Accuracy Issues

Another issue with social network background checks is whether the information uncovered is authentic, credible, and accurate – in other words, true. If a social network site contains negative information, how will the recruiter go about verifying that it is accurate, authentic, and belongs to the candidate before reporting it to an employer? There is also the question of how does a recruiter even know for sure the candidate is actually responsible for the negative posting or image online. Recruiters need to make sure what they see online actually refers to the candidate in question. With more than 300 million Americans today, most people have “computer twins,” people with the same names and even a similar date of birth. There are also false postings under another person’s name – a sort of “cyber identity theft” – and “Cyberslamming,” where anonymous information is posted and people can commit defamation without anyone knowing their real identity.

Privacy Issues

Another problem with social network background checks yet to be fully explored by the courts is privacy. Contrary to popular opinion, everything online is not necessarily fair game. Certainly if a person has not adjusted the privacy setting so that his or her social network site is easily available from an Internet search, that person may have a more difficult time arguing that there is a reasonable expectation of privacy. However, the terms of use for many social network sites prohibit commercial use and many users literally believe that their social network site is exactly that, a place to freely socialize. The argument would be that in their circles, it is the community norm, and a generally accepted attitude, that MySpace or Facebook pages are off limits to unwelcome intruders, even if the door is left wide open. After all, burglars can hardly defend themselves on the basis that the door was unlocked so they felt they could just walk in.

Legal “Off Duty” Conduct

Yet another related issue with social network background checks is legal “off-duty” conduct which occurs outside of work hours and workplaces. A number of states protect workers engaged in legal off-duty conduct. If such a search reveals legal off-duty conduct, a job candidate can claim they were the victims of illegal discrimination.

Steps Recruiters Should Take

If recruiters insist on using social network sites for background screening, then they must realize that much of the ‘new media’ available to them for social network background checks is still covered by current regulations. Recruiters considering using in the sourcing stage may want to consider some of the following:

• Ensure each position has a detailed job description written for that specific position that clearly lays out the essential functions of the job and the knowledge, skills, and abilities (KSA) required for the position.
• Have a clear internal policy that Internet sourcing is NOT being used in violation of federal and state discrimination laws and that only factors that are a valid predictor of job performance will be considered, taking into account the job description and the KSA required for the job.
• Have documented training on legal recruiting techniques. The training should include clear information on what would constitute a discriminatory practice.
• Have a clear procedure that outlines key words, criteria, and methodology for sourcing, so recruiters can demonstrate that they are searching for objective requirements to be considered as part of the pool. Even better is if the criteria being used can be measured or have a metric attached.
• If someone meets the objective requirements but is not placed in the pool of potential candidates for other reasons, a recruiter may want to note why the exception is being made. For example, if the social networking website demonstrated behavior inconsistent with business interests, that should be noted.

Bottom Line: Proceed with Caution

Recruiters need to be very careful when harvesting information from the Internet using social network background checks to screen job candidates. There has yet to be clear law or court cases that set forth how to proceed in this area of recruiting and employment screening. In the meantime, recruiters may want to avoid assuming that everything is fair game in the pursuit of candidates. The bottom line for recruiters when using the Internet for social network background checks of job candidates is: Proceed with Caution. 

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Join Les Rosen at THE RECRUITING CONFERENCE this Fall as he discusses: Web 2.0 Caution! Using Social Networking Sites and Search Engines to Screen Applicants

Carl Shusterman, Managing Partner, Law Offices of Carl Shusterman

I have had occasion to write about I-9s in this space in the past, but the topic simply won’t go away. In fact, it is hotter than ever and so merits another look.

The I-9 is a document that must be completed for every employee a company hires. It verifies the identity and the employment authorization of each new hire and is part of the federal immigration regulatory process.

It’s not a bad idea for recruiters to know something about I-9s, because how they are completed and stored can affect the ultimate fate and impact of the talent recruiters help their companies or clients to acquire.

There was a time when the federal government paid relatively little attention to I-9s, but things have changed. The government now sees I-9s as a way to crack down on employers who hire undocumented workers. Consider some of the major I-9 related fines the government has issued in recent years:

• Wal-Mart has paid $11 million in fines to the federal government in order to avoid criminal penalties.
• Golden State Fence Company paid $4.7 million in a plea bargain, allowing company executives to avoid criminal prosecution.
• Last year, Abercrombie and Fitch paid I-9 related penalties over $1 million, even though they used an electronic I-9 system purchased from a vendor.
• A large health care employer last year paid a fine of over $250,000, not because they hired undocumented workers, but because in seeking to comply with the law they asked for more paperwork from persons born abroad than from native-born U.S. citizens.
• The Chipotle restaurant chain now is being subjected to an ongoing criminal investigation, part of the Obama Administration’s increased use of I-9 audits.

I remember when President Reagan signed into law the Immigration Reform and Control Act of 1986, which established the I-9 requirement. I was recruited by a local California Congressman to give a series of seminars to employers in his district about their responsibilities under the new law. I warned them that they were walking a tightrope. The form was only one page long and looked very simple to complete. However, if they were not careful in completing, updating and storing their I-9s, they could be subject to civil fines. On the other hand, if employers tried to train their recruiters and HR managers to be junior immigration officers, they ran the risk of major fines for violating the document abuse and anti-discrimination provisions of the law.

Now, a quarter of a century later, the task of completing, updating and storing I-9 forms is exponentially more complex than it was. The U.S. Center for Immigration Services (USCIS) “Handbook for Employers” detailing I-9 requirements is over 60 pages, and the books immigration attorneys read on this subject are hundreds of pages long. There are many questions to consider: How do you complete the I-9 in a “portability” case? In a “cap-gap” case?  When there has been a merger or acquisition? Does it make sense to store I-9s manually or electronically? What are the advantages of using the E-Verify program?

Fortunately, there is some good news for recruiters and for the HR managers they work with when bringing in new talent. On May 23, the USCIS rolled out a very helpful online service for employers called “I-9 Central.” USCIS officials say I-9 Central is part of their ongoing effort to better serve the 7.5 million U.S. employers who use Form I-9 every time they hire an employee.   I-9 Central is a very clear and well-written resource that recruiters may wish to bring to the attention of their HR colleagues and to review themselves.  It is divided into the following topics:

• What’s New
• Clear and Correct
• Accepted Documents
• Retain and Store
• Penalties
• About the Form
• Customs Support

I-9 Central brings some needed clarity to the I-9 process and can be accessed through a link on my firm’s web site at http://shusterman.com/employersimmigrationguide.html#4.

Using this service, and having I-9s reviewed by an attorney experienced in this area, is a good idea at a time when the enforcement climate is going from hot to sizzling.

Carl Shusterman served as a trial attorney with the U.S. Immigration and Naturalization Service (1976-82) and is principal of The Law Offices of Carl Shusterman, Los Angeles. He can be reached at carl@shusterman.com.

Carl Shusterman, Managing Partner, Law Offices of Carl Shusterman

In today’s economy, vast numbers of people work for international companies that have offices all over the globe.

These include tens of thousands of foreign-born workers who are employed by companies overseas that have a parent, subsidiary, branch, or affiliate in the United States. Under U.S. immigration law, workers from international companies transferring to the U.S. fall into the L-1 visa category and are known as “intracompany transferees.” They may work in the U.S. on a temporary basis to perform services in one of two capacities:

* In a managerial or executive capacity (L-1A) or

* In a position requiring specialized knowledge (L-1B)

The L-1B category has always been somewhat tricky because the statutory language defining “specialized knowledge” is not simple or clear. It defines someone with specialized knowledge as a person who has special knowledge of a company’s products, processes or procedures – a not very useful definition for recruiters and human resource personnel involved in talent acquisition or transfer.

However, the government has listed certain criteria that can be used to confirm that an applicant possesses specialized knowledge. These can be useful for recruiters seeking to help their companies maintain a free flow of talent. They include:

• The proprietary nature of the knowledge. Though it is not strictly required that the L-1B applicant have knowledge of the company’s systems, procedures, or techniques that is proprietary, the possession of proprietary knowledge can in itself meet the specialized knowledge requirement. Propriety knowledge may meet the application requirement if it “would be difficult to impart to another without significant economic inconvenience.”
• The selective nature of personnel with proprietary knowledge. Knowledge of company systems and products should be limited to select individuals. If everyone is specialized, then no one is. The term “more than ordinary” is invoked when determining who has specialized knowledge. Specialized knowledge does not require an “extraordinary” level of skills, merely more than that of the ordinary employee in the company or the field.
• Employer/employee relationship. L is a status for persons being transferred to work within a company structure and not for another company. An employee with specialized knowledge who is stationed primarily at a worksite of an employer other than the petitioning employer or its affiliate, subsidiary or parent shall not be eligible for classification as an L-1B. The essential element in determining the existence of an “employer-employee” relationship is the right of control, that is, the right of the employer to order and control the employee in the performance of his or her work. Possession of the authority to engage or the authority to discharge is considered very strong evidence of the existence of an employer-employee relationship. However, the source of the employee’s remuneration, whether paid by the U.S. or foreign affiliate of the petitioning company, is not a factor in establishing eligibility for L-1B status.

The L-1 visa category has a key advantage over other employment-based visa categories such as the H-1B and the H-2B because there is no numerical cap on the number of L-1 petitions which may be approved each year. As many applicants as are qualified may obtain L-1 status.

However, as with all other immigration categories, it is important to understand and follow the rules.

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Carl Shusterman served as a trial attorney with the U.S. Immigration and Naturalization Service (1976-82) and is principal of The Law Offices of Carl Shusterman, Los Angeles. He can be reached at carl@shusterman.com.

Jill Gengler, Vice President, AccuSearch, Inc.

A few things to keep in mind with regard to criminal background reports: the reports you can request (and can legally be released to you by your background screening vendor) will only contain data dated back as far as is permitted by the regulations of the State(s) in question. In other words, criteria for the time-span of reportable information is based on the date filed and dates reflected in the case that pertain to actions/activities of the charge or conviction in accordance with the regulations (that vary) dependent both on the State in which the offence occurred, and the State to which it is being reported. Phew! Okay, as a guideline, from a date perspective, the majority of issuing entities retain criminal records for 7 years, some for 10 and others indefinitely. In regard to the actual data, over and above convictions, some States/Counties will also release non-conviction data (arrests without conviction, citations, wants/warrants) depending upon the regulations. That being said, a qualified background screening vendor or “Consumer Reporting Agency (CRA)” will obtain and only release to you as much as they can in compliance with the regulations of each County and or State in question.

Criminal background search options can include: an Instant Nationwide or Statewide Criminal and or Sex Offender Registry Searches, Non-instant Statewide Criminal Searches, County Criminal Searches, Federal Criminal Searches (either National – searches all US Districts – or single specific District(s)) and/or a Nationwide Search for Wants and Warrants.

These search types may be defined as follows:

Instant Nationwide Criminal Search – reports on felony and misdemeanor convictions, may contain traffic violations as well as data on pending and dismissed cases (as allowed by the specific State’s regulations) from a ‘National’ database. Some CRAs may use the Criminal Offender Profile Summary (C.O.P.S.) database or the National Criminal Database (NCD), PASST™, InstaCrim or others. Note that it is at the discretion of each State/County/City that uploads offenses to a database how often they upload and what level of convictions they submit and there is no true National criminal database since the States of Delaware, Massachusetts, South Dakota and Wyoming do not upload convictions to any database.

This search is sometimes called a Multi-State Criminal Search and is often “branded” under a name that is unique to the source (National Background Data, FRS, Acxiom, Innovative Data Solutions Inc., etc.). In addition, most CRAs prefer to offer their customers a combined search such as an Instant Nationwide Criminal/Sex Offender Search which includes, for example, the C.O.P.S. database and the Nationwide Sex Offender Registry search (further defined below) and may also include the OFAC/SDN Terrorist Watchlist search, an ‘AppALERT’ database of known terrorists and fugitives as well as data from a series of different FBI and Department of Corrections databases.

Most often, a combined search will save you money, as it costs your CRA less to pull all reports at once versus pulling each report individually. It is always an excellent idea to ask your CRA and/or potential CRA exactly what databases are included in their combined searches so you know exactly what you will be getting. Note that this type of search reports all data against a Name Match – so if your applicant has a common name you may receive a report with results that may not belong to your applicant. To reduce potentially false ‘hits’ be sure to provide your CRA with the applicant’s first, middle and last name as well as their Date of Birth (DOB).

Returning for a moment to the OFAC/SDN, terrorist/fugitive watch lists, FBI and other databases, these databases are maintained by OFAC, the FBI and other sources. As with an Instant Nationwide Criminal and/or Nationwide Sex Offender Registry Search, ‘hits’ or Alerts are issued when a Name Match occurs. OFAC searches are specifically a requirement of Section 326 of the United States Patriot Act which requires the verification of a borrower’s identity prior to extending credit. OFAC administers and enforces economic and trade sanctions based on United States foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction. As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called “Specially Designated Nationals” or “SDNs.” Their assets are blocked by law and American individuals and companies are generally prohibited from dealing with SDNs. The thing to keep in mind if ever a report returns with an ‘Alert’ is first – do not assume that the ‘hit’ is conclusive; your potential employee may not be the individual on whom the Alert is based. Second, contact your CRA – as they should be able to assist you in confirming the validity of the Alert. Also, the Treasury Department provides a helpful guide that tells you exactly how to go about evaluating the OFAC Alert information. Most likely, if you refer to the guide and/or by working with your CRA, you will be able to confirm if the Alert does or does not apply to your applicant. For more information, please visit http://www.treasury.gov/resource-center/international/standards-codes/Pages/regulations-index.aspx.

Instant Sex Offender Registry Search – this search can be ordered on a single State basis or on a nationwide basis.  It is mandatory for all States to upload sex offender convictions to this database on a regular basis; therefore the nationwide sex offender registry database covers all 50 States and Washington DC. A Sex Offender Registry Search is strongly recommended for any job role, but is essential for a position which requires the individual to interact with vulnerable citizens – for example the aged, infirm or minors.

Instant Statewide Criminal Search – reports felony and misdemeanor convictions as well as pending and dismissed cases as allowed by that specific State’s regulations from the exact same database as the nationwide criminal database but only for a specified State.

Non-instant Statewide Criminal Search – provides up-to-date felony and misdemeanor searches from all applicable courts of a specified State. Not every State offers this search type and most that do often charge a processing fee. Note that some States require a State-specific authorization form signed by the applicant (over and above any authorization form you should already have in hand.)

County Criminal Search – County Criminal Searches are typically ordered in each County in which an individual has resided during a 7- or 10-year period. Court researchers request up-to-date felony and misdemeanor reports onsite at the courts of a specified County. A few Counties have their up-to-date records available online but the majority will only release up-to-date data on site to a researcher. County Criminal Searches are an essential element of any criminal background history. Again, as with a Non-instant Statewide Criminal Search, most Counties charge a processing fee for this service.

Federal Criminal Search – whether National or District specific, this reports any Federal criminal convictions and non-convictions (depending upon District). Note that only a very small percentage of criminal cases are violations of Federal law. However, Federal offenses can be very severe involving kidnapping, drug trafficking, interstate transportation of stolen goods, bank robbery, and embezzlement. Most CRAs offer Federal Criminal Searches on a per District and/or a nationwide basis; a nationwide search is typically the most cost effective option. Note that this type of search also reports all data against a Name Match – so if your applicant has a common name you may receive a report with results that may not belong to your applicant. Again, to reduce potentially false ‘hits’ be sure to provide your CRA with the applicant’s first, middle and last name as well as their Date of Birth (DOB).

Nationwide Search for Wants and Warrants – reports any Wants and Warrants on an individual for extraditable offenses for which the individual has not yet been convicted. As these are warrants, this search does NOT confirm or provide convictions and does not necessarily mean that the applicant is guilty of anything.

One last item to add to the criminal background search types – the Driver Report. A Driver Report? Yes!  A Driver Report is sometimes referred to as a Motor Vehicle Report, DMV Report, a Driver’s License Verification or a Driving Records search. Driver Reports may contain very valuable behavioral information such as substance abuse, repeated traffic violations, failure to appear and unpaid fines. Most Driver Reports only go back three years but some go back as far as ten years. Note that most States have a processing fee for each Driver Report request.

From an overall cost perspective, for a number of criminal background search types, State or County processing fees may apply. Make sure you ask your CRA what these fees are, and if they add any ‘mark-up’ to processing fees, so that you are not surprised by the total cost of your background screen.

Hopefully this information will make it easier for you to request the criminal reports you need to make informed hiring decisions for your organization.

This information is not intended to constitute legal advice and should not be relied upon in lieu of consultation with your organization’s appropriate legal advisors.

Carl Shusterman, Managing Partner, Law Offices of Carl Shusterman

Recruiters can gain great credit for finding and securing top international talent – and rightly so.   The whole world is a talent pool today, and the best people may be located down the street or on the other side of the world.

Once recruited, paperwork must be completed for each and every hire and this includes the I-9 form. The I-9 verifies the identity and the employment authorization of each employee and is part of the federal immigration regulatory process.

Recruiters can assist their organizations, and enhance their value, by knowing something about the I-9 process – in particular, how to survive an I-9 audit. An I-9 audit takes place when Immigration and Customs Enforcement (ICE) serves a Notice of Inspection on an employer, compelling them to surrender their I-9 forms to the government.  So far this year, ICE has levied over $3 million in fines on employers for I-9 violations – a new record.

Recruiters who wish to keep their organizations out of unwanted trouble may wish to share the following tips on how to survive an I-9 audit with their human resource departments: 

1. Make sure that each new hire completes Section 1 of the I-9 form the first day of employment.  This is the section where the employee indicates his or her status – U.S. citizen, green card holder, or holder of some form of work authorization. Some employers allow employees to defer completion of this section. However, if the employee’s information is incomplete, it is the employer who pays the fine. If the employee has temporary work authorization, it is particularly important he or she indicate when the temporary authorization expires.
2. Complete Section 2 of the form by the employee’s third day of employment, as required by law. Show the employee the list of documents included on the I-9 form the federal government accepts to verify employment authorization. Have the employee show either one List A document (ID and Employment Authorization) or one List B document (ID) and one list C document (Employment Authorization). Do not request specific documents or additional documents.
3. Keep your I-9 forms separate from employee personnel files. Otherwise, employers will have a lot of sorting to do if they receive a Notice of Inspection. The forms must be retained for three years after the employee is hired or one year after his or her employment ceases, whichever is later. Keep the forms of active employees separate from those of former employees. Purge the latter on a regular basis.
4. Create a tickler system for employees who check the box in Section 1 which indicates they possess only temporary employment authorization. Send them notices well in advance of the termination of their work permits advising them of the need to update their I-9 forms.  Remember that certain types of work status are extended simply by submitting an application for an extension to the U.S. Center for Immigration Services (USCIS).  Never update the forms of U.S. citizens or permanent residents, even though “green cards” all have expiration dates, as the federal government will not allow such updates.
5. Protect yourself from violating the antidiscrimination provisions of the law by treating employees who may look or sound “foreign” to you the same as employees who are U.S. citizens. Do not ask “Jose Sanchez” for more of different documents than you ask from “Joe Smith.”
6. Business owners and/or human resource personnel should carefully read USCIS’ “Handbook for Employers” outlining the various rules and regulations pertaining to compliance with employment related immigration law. You can review to the handbook from my web site at http://shusterman.com/immigrationguide.html#9. My web site (www.shusterman.com) also features a free video entitled “How to Survive an I-9 Audit” that offers further advice.
7. Have an attorney who has experience in I-9 laws and procedures review all of your I-9 forms periodically. In most cases, employers are receiving fines not for knowingly hiring illegal aliens but for improperly completed paperwork, errors an attorney should be able to detect.

The recruiting process does not end when a new hire signs a contract – it extends through the retention phase. Properly completed I-9 forms are part of an overall retention strategy and recruiters can help ensure this part of the process is handled efficiently.

**

Carl Shusterman served as a trial attorney with the U.S. Immigration and Naturalization Service (1976-82) and is principal of The Law Offices of Carl Shusterman, Los Angeles. He can be reached at carl@shusterman.com.

Why Every Placement You Make Has the Potential of Putting You Out Of Business

Lester Rosen, Attorney at Law & President, Employment Screening Resources

It’s a sobering thought, but every time a recruiting professional makes a placement, there is the possibility that new hire can put them out of business.

Why? Because if a dangerous, unqualified, unfit, or dishonest candidate is placed in a job – and harm occurs, the hiring firm risks a lawsuit for negligent hiring. Perhaps just as importantly, a bad placement can result in loss of business and damage to a professional reputation that may have been years in the making.

The root of the problem, of course, is that some candidates lie on their resumes and applications. Industry statistics suggest that up to 10% of applicants can have criminal records. Fraudulent misrepresentations as to education and employment occur in as much as 40% of the time, according to some studies.

Individual recruiters can, in fact, be sued for negligence if harm occurs, and if she or he knew or should have reasonably foreseen that a bad placement could cause a problem. At that point, the heart of the staffing professional may sink when those dreaded words echo across the courtroom: “Ladies and Gentleman of the Jury.”

Those are words you never want to hear, and a situation in which you never want to be. Your protection and your best defense is to exercise “due diligence,” which means to verify the representations and qualifications of the candidate.

The allegation in a “Negligent Hiring” lawsuit (or “Bad Hire” lawsuit) would be that the staffing professional placed someone that they either knew or, in the exercise of reasonable care, should have known was unfit or dangerous. Of course, since a staffing professional would not intentionally place someone who was dangerous or unfit, the question before the judge or jury is whether the staffing professional reasonably should have known that the placement was bad if they had only exercised a greater degree of care in screening the applicant.

In such a lawsuit, a staffing professional would need to show, for example, whether credentials and education were verified, whether past employment was checked, and whether a criminal background check was done.

Lawsuits occur usually in cases where there is some sort of serious harm either to a business, such as embezzlement, or theft, or to an individual, such as assault, rape, child molestation, identity theft, or even homicide.

A staffing professional who is responsible for a bad placement can be sued by a number of parties, including the business entity that relied upon the professional judgment of the recruiter or staffing firm. Certainly, a co-worker or member of the public who was injured by the bad hire can sue for damages.

The worst case scenario would be that the bad hire resulted in the death of a fellow worker, and the victim’s family is suing for wrongful death. This is just what happened in a highly publicized case in California. A 28-year-old female winery worker was stabbed to death by a co-worker who was a convicted murderer and had been placed at the winery by a temp agency. The agency did NOT conduct a background check. The jury awarded the family $5.5 million.

If a recruiter is sued, it may well be an uphill battle to win in court. The jury will hear evidence that the recruiter recruited, recommended, or placed the offender. In most cases, the staffing professional probably makes representations about the quality of their services. The staffing professional’s website and sales literature may suggest that they provide only the best candidates who are “carefully screened.” However, in the world of recruiting, “screening” really only means that resumes have been reviewed to determine “a good fit” as opposed to “background screening” for criminal records and verification of facts represented on the resume.

The employer, hoping to lay the blame onto someone else, will of course claim that they relied upon the professional abilities of the staffing professional to send them qualified and safe candidates. There would likely be evidence that the recruiting or staffing firm made a fee on the placement. In the end, the attorney for the injured or deceased employee would ask jury members, “Didn’t the staffing professional have not only the resources and opportunity, but also the duty to conduct employee screening on the potential employee before approving their introduction into the workplace?”

In this scenario, it is not likely that the jury members will have much sympathy for the hiring firm or staffing professional.

Some recruiting professionals have resisted the idea of background checks because they feel that with their years of experience, they are good judges of people. That is no longer a defensible position, nor is it even accurate. A growing body of scientific evidence suggests that even the most experienced recruiters cannot eliminate potential bad hires by detecting lies and evasions at the interview. Studies show that even though people believe they can detect liars, most people have only a 50-50 chance at best of detecting a liar. According to one recent study, even trained law enforcement officers are only right a little over half the time. The traditional means of reading body language, for instance, to screen out liars are useless against an accomplished con artist who can tell stories very convincingly.

Some recruiters may be concerned that background checks add to the cost of their services or hinder placement with unneeded delays while screening results are obtained. However, in today’s litigious world, recruiters and staffing professionals need to make a risk-management assessment: Is saving a few dollars and a little time worth playing Russian Roulette with each candidate you send out? Which one of these candidates will land you in court, or on the front page of the newspaper?

Will your professional reputation be tarnished forever – perhaps beyond repair?

The bottom line is that due diligence and background checks go to the very integrity of the “product” being sold by recruiting and staffing professionals – workers who are qualified and fit for the job. Selling staffing services without knowing who you are sending to a client’s business would be like selling medicine with no idea of what is in the bottle.

Staffing and Search professionals have traditionally focused on Sourcing and Sales. It is worth noting that at some recruiting conferences, there are a large number of sessions devoted to making money through finding candidates and selling services. However, there are few sessions, if any, on the subject of how to ensure the integrity of the very product being sold. Recruiting and staffing professionals can protect their own business, their clients, and the public by shifting their focus from just Sourcing and Sales to “SVS” – Sourcing, Verifying and Sales.

Jill Gengler, Vice President of Business Development, AccuSearch, Inc.

All successful enterprises understand the importance of maintaining sound working relationships with their vendors and service providers.  But when it comes to the company that handles your background screening, there are legal and regulatory factors that must also be understood and taken into consideration.  Consumer reports, such as those that provide informational data during the pre-screening process, fall under the Federal Credit Reporting Act; in order for your organization to protect itself and ensure that you and your vendor are in compliance with the Act’s rules and regulations, it is wise to consider the following points: 

• Completion of a job application form does not automatically give an employer a background screening authorization.

By law, an employer cannot conduct a background screen on a job applicant unless and until they have received a signed background screen authorization form from the applicant.  Your vendor should provide you with a template to use as your background screen authorization form that identifies them as the vendor, a FCRA Disclosure Notification, and instructions for the applicant should they want a copy of their background screen report or end up wanting to object to any of the report’s content. 

• If an applicant is rejected by your organization because of information in their background screen take advantage of your vendor’s Adverse Action notification service.
• The FCRA requires employers retain copies of signed authorization forms for no less than two (2) years. To assist customers, most vendors will provide you with a method of attaching signed authorization forms directly to the applicant’s profile within their online ordering and reporting system for storage and retrieval purposes.  If your vendor or your organization is audited by the Federal Trade Commission, they may ask for copies of applicant signed forms and there may be significant consequences for not having the forms on file.
• Once the screening is complete, it is not your responsibility to assist an applicant if they claim there are errors in their report.
• It is your responsibility to notify an applicant if your organization decides not to hire the applicant because of Adverse Information discovered within their background screen report.  A competent vendor will provide you with an Adverse Action Letter Template which you can print on your letterhead and provide to the applicant along with a copy of their background screen report.  Alternatively, many vendors will provide Adverse Action Letters and report mailing as a service on your behalf for a very small fee.

When Selecting A Vendor 

Your best insurance against adverse legal and regulatory issues is contracting with a reputable service provider who is current with, understands and complies with the Act. There are thousands of screening vendors across the country ranging from small to very large. Most are members of the National Association of Professional Background Screeners – ensure you select a member in good standing by checking their status on www.napbs.com.  Ensure your vendor is licensed and bonded and can respond satisfactorily to the following questions: 

1.   How do you ensure your company is compliant with individual state employment laws and adheres to Federal FCRA requirements?

A competent vendor should be able to demonstrate that they regularly monitor and proactively advise customers of changes to hiring laws; that their team members all have their FCRA certification; and be able to provide you with a detailed overview of their quality assurance procedures. 

2.   How do you protect my data?

Your vendor should provide you with technical and business process descriptions of the security protocols for the secure online system (https://) you will be using to order and review background reports and should have a policy in place that requires regularly scheduled password changes for Users. Your agreement with and training from your vendor should include specifications which cover Fair and Accurate Credit Transactions Act (FACTA) Disposal Rules in regard to your having appropriate measures in place to dispose of sensitive information derived from consumer reports. 

3.   Can you provide a service for any applicant who wants to obtain a copy of their complete background report and how will you respond if the applicant insists that the records are incorrect?

One in ten criminal background checks will generate a ‘hit’ and a reputable company will have an automated process in place to handle these outcomes, and can instruct applicants who wish to dispute their record. When this happens, the background screening company must react quickly and re-investigate to make sure that correct information has been reported.  The applicant has the right to work directly with the background screening company – not you – without cost to you or the applicant.    

Drug Testing Programs 

Although the federal 1988 Drug Free Workplace Act requires that those organizations that facilitate annual federal contracts in excess of $100,000 “make appropriate efforts to maintain a drug-free workplace,” this requirement does not make employee drug testing mandatory. And while any employer can implement a drug screening program which can include traditional urinalysis and or instant drug testing – it must be administered fairly, consistently and be in accordance with federal and your specific state laws.  Note that instant drug screening is not permissible in all states, and in those where it is permissible any positive result must be confirmed by a lab. In addition some states (among them, Iowa, Montana and Rhode Island) have restrictions on random drug testing.  Your vendor should be able to advise you on these where required. 

Should you decide to implement a drug screening program there are a couple of things to have on your checklist: 

1.   Draft and distribute an Employee Guide to all employees containing details of the company’s new drug screening program. Be sure that your drug screening program takes into consideration federal, state and local laws in regard to pre-employment, for-cause and/or on-going random drug testing. Have every employee sign an acknowledgement receipt of the new program information. HR should file the signed receipts or digitize and store the signed receipts for future reference if ever necessary. 

2.   Provide every employee (and include within the on-boarding process of new hires) an “evergreen” Drug Screen Request and Release Form which must be completed, signed and returned to HR. An evergreen Request and Release Form gives the company the right at any time to order a drug screen on an employee/new hire and also permits the company to re-run drug screens if an employee is being considered for a pay increase or new job role, without having to obtain a new Form each time a screen is to be conducted. Again, the program must be based upon your specific state laws. HR should file the signed R&R Forms or digitize and store the signed forms for future reference if ever necessary. 

3.   Ensure that HR conducts drug testing consistently across all job roles and employee levels to avoid any claims of unfair hiring or employment practices.  

Attention to the foregoing information and recommendations and their inclusion in the vendor selection process will go a long way to ensuring that your selected vendor will both provide satisfactory screening services, and work with you to remain fully in compliance with the services’ underlying rules and regulations. 

This information is not intended to constitute legal advice and should not be relied upon in lieu of consultation with your organization’s appropriate legal advisors.