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Legislative Updates September 2018

Sep 05 2018 | In: Posted on Categories Legislative Updates
Senate Bill 2155 Requires New Notice to Consumers
Notable provisions contained in the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) go into effect September 21st.

S.2155 amends the FCRA to allow consumers to request a security freeze, from of charge, from the nationwide credit reporting agencies (Equifax, Trans Union, Experian) and also extends the length of time for initial fraud alerts from 90 days to 1 year. A consumer may request an initial fraud alert when they believe that they have been or about to become a victim of fraud or identity theft.

S.2155 also includes a new notice that must be provided to consumers “at any time a consumer is required to receive a summary of rights required under section 609”. Thus CRAs must provide this new consumer notice whenever the consumer is required to receive the summary of rights under section 609 of the FCRA (either the federal Summary of Rights notice or the “Remedying the Effects of Identity Theft” notice).

The notice required by the new provision under Section 609 is as follows:

Consumers have the right to obtain a security freeze 

You have a right to place a ”security freeze” on your credit report, which will prohibit a consumer reporting agency from releasing information in your credit report without your express authorization. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, or any other account involving the extension of credit. As an alternative to a security freeze, you have the right to place an initial or extended fraud alert on your credit file at no cost. An initial fraud alert is a 1-year alert that is placed on a consumer’s credit file. Upon seeing a fraud alert display on a consumer’s credit file, a business is required to take steps to verify the consumer’s identity before extending new credit. If you are a victim of identity theft, you are entitled to an extended fraud alert, which is a fraud alert lasting 7 years. A security freeze does not apply to a person or entity, or its affiliates, or collection agencies acting on behalf of the person or entity, with which you have an existing account that requests information in your credit report for the purposes of reviewing or collecting the account. Reviewing the account includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements. 


California Attempts to Clarify Salary History Ban Legislation
California Governor Brown signed into law Assembly Bill No. 2282 to clarify previously passed legislation (AB 168) that prohibits inquiries into an applicant’s salary history. Under AB 168, California employers must provide “applicants” with the “pay scale” for a position upon “reasonable request”.

The newly passed AB 2282 clarified these three terms. “Applicant” is an individual who seeks employment with the employer, not a current employee. “Pay Scale” as defined by the bill is a salary or hourly wage range and clarifies that “pay scale” does not include bonuses or equity ranges. Lastly, “reasonable request” for pay scale information is defined as a request made after the applicant has completed the initial interview.

AB 2282 also clarifies that, although employers cannot ask about salary history, they may ask applicants about salary expectations for the position.

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Lawsuit Claims Arkansas Court Clerk Keeps Documents from Screeners
The National Association of Professional Background Screeners filed a lawsuit against Jennifer Jones, clerk of Bentonville’s (AK) district court. The lawsuit claims that Jones refuses to provide background screen companies access to records from her court.

According to the complaint, Jones requires any person seeking individual court records to pay $5,000, complete a compiled records license agreement and obtain a compiled records license from the Arkansas Administrative Office of the Court.

The complaint states that the Arkansas Supreme Court order and compiled records license are to be used for bulk electronic data extracts for a large number of individuals, so it’s not possible for background screening companies attempting to obtain individual case records to comply with the requirements of obtaining a license.

The lawsuit seeks a preliminary and permanent injunction and wants the court to declare that NAPBS members have a right to the records.

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Puerto Rico Governor Signs Executive Order Increasing Minimum Wage for Construction Workers
Effective July 30, 2018, Executive Order No. 2018-033 increased the minimum wage for construction workers, enforced laws requiring use of locally produced concrete, and required the use of project labor agreements in government-funded construction projects. The order requires that any construction project financed in whole or in part with funds from the Puerto Rican government or public corporations, the contractor or subcontractor must pay workers hired to work on the project at least $15.00 per hour.

The bill also requires a project labor agreement covering all contractors and subcontractors be included in the proposal and bid for government-funded construction projects exceeding $2 million.

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Wage Watch: Minimum Wage & Overtime Developments
Despite being the slow season for these types of matters, there were quite a few developments around the country regarding minimum wage, overtime and tips.

Notable developments occurred at the Federal level and in Delaware, California, Pennsylvania, Arkansas, D.C., Michigan, Alabama and Illinois. Details can be found by visiting the link below.

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Missouri – Salary History to be Removed from Applications for City Jobs
Having previously removed criminal history off of job applications for Kansas City employers, the city has decided to take salary history off applications for city jobs. The city council will also ask companies with contracts with the city to do the same.

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North Dakota – New Regulation on Daycare Workers Background Checks
A new federal regulation requiring employers to have background checks completed before an employee is allowed to work with kids goes into effect later this year. While it is a federal rule, it will be up to states and counties to enforce it.

Although daycare centers do not have a problem with background checks, it’s the new regulations and waiting periods for background checks and fingerprint processing that concern them. These centers often need staff on short notice, but the new regulation will require longer onboarding times for employers.

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UK Adopts New Trade Secret Regulations
The Government of the United Kingdom recently added a new layer of protection by enacting the Trade Secrets Regulations 2018. The new regulations set out the remedies available when trade secrets have been unlawfully used or disclosed and provide measures that courts can use to keep trade secrets confidential while remedies are sought.

Details can be found via the link below.

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New California Wildfires a Reminder of Employer Obligations
It’s been an unfortunate and historic year for wildfires throughout California. As these communities try to recover from the blazes, many businesses are left wondering how to proceed. The link below summarizes some of the key labor and employment issues that may arise in the near term for these businesses.

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Privacy Shield FAQs – Processing Guidance
The Privacy Shield Program has provided FAQs relevant to when personal data is transferred from the European Union to the Untied States for processing purposes only.

Click the link below to learn more.

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District Court Dismisses FCRA Disclosure Claim Against Casino
In Williams v. TLC Casino, the District Court for the District of Nevada found that a plaintiff cannot bring a “solely of the disclosure” claim in federal court when he or she has suffered not actual harm separate from the perceived failure to properly format the disclosure.

In this case, the plaintiff (Williams) alleged that TLC Casino Enterprises violated the FCRA by obtaining a consumer report on her without providing here with a “stand-alone document of a legal disclosure”. According to Williams, TLC only provided her a written conditional offer to hire that included a statement that continuation of the position and employment id dependent on passing any Background Check or Drug Screen that may be required for the position. This document, in William’s view, was not a disclosure that consisted “solely of the disclosure” that a consumer report may be obtained for employment purposes.

This decision follows the recent trend of courts increasingly dismissing disclosure claims when plaintiffs allege nothing more than the violation of a procedural requirement.

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California – State Workers Get Background Checks or New Jobs
The IRS rule requiring criminal background checks for public workers who can read taxpayer information is coming to California state government. Rather than laying off certain longtime employees, however, state officials and union leaders are working to find new jobs for public workers. So far, dozens of state employees have been reassigned rather than go through fingerprinting and formal background checks.

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Kentucky – State Law Requiring New Background Checks Causing Confusion Ahead of School Year
A new Kentucky law passed in 2017 requires new hires who fall in the categories of employees, student teachers, contractors and volunteers to turn in a letter from the Cabinet of Health and Family Services assuring that they are not on the list of substantiated reports of child abuse or neglect in addition to the current statute requiring a criminal background check.

As the school year begins, there is confusion surrounding who falls in the required categories, and there is currently a backlog of requests for the new form.

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Illinois Passes More Extensive Background Checks for Ridesharing Drivers
Effective immediately, ridesharing drivers in Illinois will be required to go through more thorough background checks. Before the rule was passed, Uber asked for names, driver’s license numbers, care registration and insurance information. Now, drivers will be required to provide their social security numbers and their full legal name.

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The Common App Will Stop Asking About Students’ Criminal Histories
The nonprofit organization behind the Common Application, a single form that students can fill out to apply to any college that uses it, announced that , starting next year, it will no longer ask student about their criminal history. More than 1 million prospective undergraduates every year apply to college using the Common App, which is used for admission decisions by more than 830 institutions worldwide.

The change may be the biggest help to low-income students of color, who are disproportionately likely to have been convicted of a crime. The new policy still gives colleges flexibility as schools can obtain information about criminal history through other means, such as specifically asking in their application supplements.

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Texas – San Antonio Joins Austin in Mandating Paid Sick and Safe Leave; Then Court Enjoins Austin Law from Taking Effect During Appeal
The San Antonio City Council adopted a paid sick and safe leave ordinance that is nearly identical to the ordinance passed earlier this year in Austin. The very next day, The Texas Court of Appeals issued an order that temporarily enjoins Austin’s ordinance from taking affect until the appeal is resolved.

The link below goes through the Austin appeal and the impact it could have, including on the San Antonio ordinance.

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Modifications to the Statement of Policy for Section 19 of the Federal Deposit Insurance Act
The FDIC issued modifications to its Statement of Policy (SOP) for Section 19 of the Federal Deposit Insurance Act.

The updated SOP can be found via the link below.

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California – Employers Must Get Permission Before Performing Background Checks
The California Supreme Court ruled that employers in the state must follow the stricter Investigative Consumer Reporting Agencies Act (ICRAA) when running certain background checks and obtain written permission from employees and applicants before doing so. The ruling affirmed a lower court ruling that said First Student failed to notify or obtain consent from 54,000 bus drivers before it ran background checks.

While First Student complied with the Consumer Credit Reporting Agencies Act (CCRAA), which does not require prior disclosure or consent, the court ruled that the overlap between ICRAA and CCRAA doesn’t not render ICRAA vague – and that does not exempt an employer from ICRAA background check requirements.

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California – Muni Officials to Step Up Background Checks on Contractors
San Francisco Municipal Transportation Agency said they will beef up background checks on potential contractors following revelations that a hired contractor had a history of safety violations. Until now, the application process counted on potential bidders to truthfully respond to a requalification questionnaire.

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Illinois – Chicago Reaches $10.4M Settlement with Ride-share Companies Over Background Checks
The city of Chicago reached a $10.4 million settlement with ride-share companies that didn’t perform background checks up to Chicago code, and has decided to spend the funds on a youth mentoring program.

Uber, Lyft and Via settled allegations, not filed in formal litigation, that the companies committed “process violations” with background checks “that were not consistent with Chicago’s standards as set by the City’s rideshare ordinance”.

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