Employee Screening Hear No Evil, See No Evil: Pay the Consequences

1. Employee ScreeningHear No Evil, See No Evil: Pay the Consequences Limiting liability while enhancing safety and productivity

2. Employee Screening Drug & Alcohol Testing & Background Checks

3. Drug & Alcohol Testing

4. Substance Abuse in the Workplace • Cost to business - $1 billion a year • 500 million workdays lost annually • 75% of adult illicit drug users & 80% of heavy or binge drinkers are employed • More than 60% of adults know people who have worked under influence of drugs or alcohol • 19 million people in US currently use illegal drugs.

5. Key Metrics Impacts ofEmployee Drug and Alcohol Use Turnover • substance abusers change jobs as often as 3 times per year Productivity • substance abusers are 33% less productive than peers • SHRM found organizations starting drug and alcohol testing see a 19% increase in productivity

6. Key Metrics Con’t Absenteeism • substance abusers are 2.5 times more likely to be absent for more than 8 days per year Workers Compensation Claims • substance abusers can double the cost of workers’ compensation costs for employers

7. Idaho is a Red state…and we’re not just talking politics! DEA and NFLIS 2006 Annual Report

8. Benefits of Drug & Alcohol Testing Increases • safety • bottom line • productivity • quality of work • retention • reputation • recruitment Decreases • recruitment costs • absenteeism • work related injuries • Workers’ Comp costs • workplace conflict • shrinkage • health care costs • negligent hiring claims

9. Negligent Hiring • Caused by superficial screening & sloppy hiring • Liability due to many types of behavior • violence • theft • harassment • fraud • Average settlement nearly 1 million • Employers have lost 79% of cases

10. Why Pre-Employment Testing is Not Enough The positive rate from random tests is 47% higher than the pre-employment testing positive rate in general industry, according to Quest Diagnostics.

11. Federal Regulations Specify • Who gets tested • What gets tested • Whenthey get tested • Where they get tested • Why they get tested • How they get tested

12. When It All Started • Reagan’s Executive Order 12564 (1986) • Mandated a Drug Free Federal Workforce • Each agency to establish program • Sec. Health & Human Services (HHS) • governs SAMHSA • establish scientific & technical test guidelines • specify drugs for testing

13. Department of Transportation (DOT)(49 CFR, Part 40) DOT mandate 5-panel urine lab test • Marijuana • Opiates (includes morphine, heroin) • Cocaine • Amphetamines/Methamphetamines • MDMA (Ecstasy) • Phencyclidine (PCP) NON-Mandated 5-panel test • no Ecstasy • urine, saliva or hair-instant or lab

14. Prescriptions Drugs • 2012 – more over doses from prescription drugs than illicit drugs • MRO asks for doctor and/or pharmacy information • Negative test if MRO verifies existence of medically necessary prescription and legal use of prescribed substance • Deadline will be given for information– maximum of five days

15. Idaho Employer Alcohol and Drug-Free Workplace Act (IC 72-1701 et seq)

16. Drug-Free Workplace Act • Governs private employers only* • Purpose – promote alcohol & drug free workplace • Tests can be condition of employment • Company bears costs • Confirmation test required • Unemployment denied if positive test • Presumption & limitation of damages

17. Drug Free Workplace Act Con’t Written policy required – must include • termination possible if fail test • list types of testing to be used • employee rights specified • to explain test result • request re-test at lab within 7 days • paid if re-test negative

18. What Constitutes a Positive Test • Substitution of specimen • Alteration of specimen • Attempt to alter or substitute • Failure to appear • Failure to remain at collection site • Failure to provide sample • Refusal to test • Refuse second test • Provide insufficient sample and refuse medical exam • Obstruction of testing process • Refuse direct observed test

19. Common Testing Methods • Urine - instant • Urine - lab based • Hair test • Saliva - lab or instant • Sweat test • Breath alcohol • breathalyzer • instant

20. Best Practice is a Robust Testing Program • Pre-employment • Baseline • Random • Reasonable suspicion • Post accident • Return to duty • Follow-up

21. Idaho Workers Compensation Premium Deduction With a full Drug Free Workplace Program, Idaho employers can receive up to 5% off of their annual Workers’ Compensation premium.

22. Supervisor Training Signs of Drug and Alcohol Use Best practice Managing Substance Abuse in the Workplace • Federal Law Requires Training required for reasonable suspicion testing

23. Supervisor Training Should Include • Company policy • Laws of jurisdiction/industry • How to recognize substance abuse • Indicators for reasonable suspicion • What to do about it • Steps to limit liability • Documentation and discipline options

24. Reasonable Suspicion • Violation of company policy • Question of employee sobriety • Indicators MUST be observed by supervisor • physical • behavioral • performance • drug paraphernalia • combination

25. Drug Paraphernalia

26. Background Checks

27. Background Checks are a good business decision • More than one in four adults are estimated to have a criminal record • 46% of employment, education, and/or credential reference checks show discrepancies between applicant and source reports • 11% of job applicants misrepresent why left prior employer

28. Most Common Background Checks • Social Security Number Validation • Social Security Search - Name & Address History • National Criminal Search • National Sex Offender Search • County or State Criminal Search • Motor Vehicle Record • Credit • Education verification

29. Fair Credit Reporting Act (FCRA) • Governs 3rd party consumer reports • Some key requirements • consumer reporting agency • disclosure & authorization • advance notice - adverse action • copy of rights under FCRA • opportunity to dispute record • handling & retention of information

30. Fair Credit Reporting Act (FCRA) Forms typically used in screening • Summary of Consumer Rights under FCRA • Notice to user of Consumer Reports of their Obligation under the FCRA • Notice to Furnishers of Information of their Obligation under the FCRA • All modified effective January 1, 2013

31. More State and Federal Restrictions • State, county, city laws/rules • 8 states bar/restrict use of credit checks • Ban the Box - 19 states Convictions older than 7 years barred • FCRA – mandatory • EEOC – advisory • Exceptions for other federal laws • Bank – no convictions past 10 years

32. Best Practices • No use of criminal histories as a per se bar to employment • Use EEOC’s guidelines in use of criminal history in hiring decisions • No questions of criminal convictions in applications • Only ask about criminal history when position where criminal history may be relevant • Limit questions to convictions with nexus to job duties

33. EEOC Position on Criminal Background Checks Use of conviction record may violate Title VII disparate treatment and disparate impact theories if employer intentionally and selectively enforce screening policy against protected class members

34. EEOC Position Con’t If policy has disparate impact, policy must be “job related and consistent with business necessity” Title VII pre-empts state law 3.13M conciliation agreement with PepsiCo – blacks excluded by criminal background check policy (2012)

35. EEOC Guidelines Re-embraced three factors when evaluating criminal history • nature & gravity of crime • time lapsed since conviction or completion of the sentence • nature of job sought or held Must use “individualized assessment” • Must give opportunity to give extenuating circumstances or error

36. EEOC Guidelines Con’t Arrest records • can not be sole reason to deny job • use only if not banned by state law • use conduct underlying record • must render person unfit for position • e.g. school bus driver arrested for DUI

37. Social Media Searches • Tread carefully • use of prohibited information may violate federal & state discrimination laws • age, religion, disability etc. • evidence in discrimination claim

38. NLRB – Social Media Under NLRB guidelines employees can discuss wages and work conditions without repercussions • Deemed concerted activity

39. Vendor Selection Testing & Background Checks • Single source • 24/7 availability if appropriate • Guidance and coaching available • Knowledgeable of federal & state laws • Supports clients’ compliance • Updates on laws and regulations • National services

40. Testing Vendor Criteria • Take responsibility off your plate • Manage drug/alcohol test program • Interface with employees • Provide MRO services • Cost effective • Handle lab, results, testing supplies • Manage random test program • Provide mobile & certified collectors

41. In-House Program Risk - Test • Increased liability, responsibility, time • Evaluate/select labs and MRO • Evaluate test devices/methods • Train/certify collectors • Calibrate equipment • Scientifically valid random program • Compliance with federal and state laws • Procedure for positive tests • Interface with employee • Potential claims of discrimination

42. Background Check Vendor • Licensed Consumer Reporting Agency • Large, accurate, updated data bases • Ability to search nationally • Working knowledge of FCRA • Required documents • Verifications • Knowledge of related laws • Turn-around time • Web-based • Confidentiality

43. In-House Program Risks - BGS • Increased liability, responsibility, time • Inaccurate data bases • No national data base • Procedure to research & correct records • Compliance with state and federal laws • Cost • Slower turn around time

44. Q & A

45. This presentation contains the opinions of the presenters and does not constitute legal advise.Kail Q, Seibert, JD Susannah Arnim, SPHRkqs@aheaofothekurve.comsarnim@aheadofthekurve.com (208) 331-5057 Aheadofthekurve.com solutions@aheadofthekurve.com