How a Hiring Technicality Can Land Companies in Court

A slew of lawsuits has been filed lately against companies accused of violating FCRA in their hiring processes. The most recent company to join that list is Starbucks Corp. for a violation in its adverse action process. A Colorado man named Jonathan Rosario filed a class action lawsuit against Starbucks after being denied a job based on an inaccurate background screening report. According to Rosario, the report contained felony and misdemeanor criminal records from Pennsylvania. Rosario, it turns out, has never even visited Pennsylvania.

As a background screening partner, we see not one but two problems with Starbucks’ background screening process. The first is, Starbucks was making a hiring decision based on records that weren’t accurate.  A good background screening provider verifies every record to make sure a criminal or disqualifying record isn’t a case of mistaken identity. Both the company and the client have a stake in making sure all background information is accurate.

The second problem is in the company’s Adverse Action process. Rosario received a letter stating that his background report had eliminated him from consideration, but he had already been disqualified from the employment process.

When Rosario used the Starbucks’ dispute system to provide a corrected report, the company refused to revisit the decision. FCRA is clear on this issue: A candidate must be given time to correct any inaccurate information before they are disqualified from a job. 

The Fair Credit Reporting Act (FCRA) was originally enacted in 1970 to protect the privacy of individuals’ personal information. Only recently have so many employers been hit with lawsuits for allegedly violating the act. It’s usually a hiring technicality, often in the background screen, that lands these big companies in court. Whole Foods, Dollar General, and Panera Bread have all been sued for violating FCRA.

Some things to remember about FCRA:

  • An employer must give notice that an applicant’s background will be investigated and ask for authorization in a way that’s “clear and conspicuous” so it stands out from the rest of a job application. In fact, an online application that is one document, without a separate notice and authorization, is illegal. The notice and authorization must stand out from the rest of the application.
  • An employer must notify a candidate if something in their background is considered “disqualifying” before actually disqualifying them. The applicant should be given time to fix any errors in their consumer report before they are officially disqualified.

Companies are Vulnerable and the Penalties Can be Steep

Though the FCRA guidelines are nothing new, there is a recent trend for lawsuits against companies for violating the guidelines. Here are ways for employers to mitigate the risks:

Hand-Vetted Records

This is important and should not be overlooked. Wolfe screeners verify every record to make sure it doesn’t belong to someone else with the same name, as was the case with Rosario. We can also take on all the adverse action paperwork to make sure every step of the background screening process is compliant with FCRA.

Wolfe’s Adverse Action Service for Peace of Mind

Many background screening clients hire us to handle their adverse action program too. It works like this: Once a client notifies us that there is disqualifying information in the background screening report, we verify that it does indeed belong to the applicant.  We then send an Adverse Action letter by email and snail mail, giving the applicant the legally recommended time to correct or dispute any errors. Clients are kept in the loop on any disputes that arise.

If you have questions about background screening or would like to add Adverse Action to your current service, give us a call at 800.230.2991 or fill out our contact form and we’ll get back to you. 


Is Drug Addiction and Abuse Effecting Your Bottom Line?

What are Illicit Drugs

It’s one of those “ticking time bombs.” If you have substance abusers in your employ, it truly is only a matter of time before you see the impact on your business. And it’s not as uncommon as you might think – 70% of illicit drug users are holding down a full-time job. Additionally, an even higher percentage of alcoholics and binge drinkers are on someone’s payroll. Substance abuse is not always easy to detect and, unfortunately, oftentimes when it is, the issue is ignored due to lack of expertise in how to deal with it.

The most commonly used illicit drugs by workers on the job are marijuana and cocaine. In recent years, the abuse of prescription drugs such as Xanax, Adderall, and Oxycodone is also on the rise (we’ll revisit this growing trend in a future post). Most people recognize that cocaine is highly addictive and dangerous in the workplace, but marijuana, often viewed as a “safe” drug, still presents significant liabilities for employers. Emergency room visits related to marijuana use increased 59% between 2006 and 2010 and are second only to cocaine among accidents involving individuals abusing illicit drugs. Truth is, there is no safe drug use in the workplace. Any substance that impairs judgment or alters perception increases risk of injury, decreased production and loss of revenue.

Why Do Individuals use Illicit Drugs

The appeal of illicit drug use is for the physical and emotional reactions they deliver to the user. Feelings of happiness, mild hallucinations, euphoria, self-confidence and sociability are all effects chased by casual and frequent users of these drugs. At other times, drug abusers are trying to mask a deeper emotional void such as a feeling of emptiness or loneliness or to self-medicate as an escape from stress or anxiety. An individual’s reasons for using and abusing illicit drugs are their own. When done during work hours, however, those reasons become your concern.

Impact of Illicit Drug Abuse on the Workplace

Each year drug abuse and addiction cost American companies $81 billion. On average, substance abusers cost employers $13,000 a year. They are 3 times more likely to have an accident while at work and 5 times more likely to file a workers’ compensation claim. A national study on alcohol-related occupational injuries reported that about 16% of emergency room patients injured at work have alcohol in their system. The costs of having illicit drug users on your payroll are spread across the organization. Their related problem areas include:

* Chronic Absenteeism

* Loss of Production and Efficiency

* Poor Decision Making

* Impaired Judgement

* Theft

* Decreased Morale Among Co-Workers

* Higher Turnover / Cost of Replacement

* Conflict with Co-Workers and Supervisors

* Sale of Illegal Drugs to Other Employees

Industries with Highest Illicit Drug Use

With an estimated 14.8 million drug abusers (more than 10% of the US workforce) having full-time jobs, chances are high that someone in your organization has a drug problem. Substance abuse has no demographic boundaries and can affect individuals from the executive suite to the mailroom. The industries most commonly affected are listed in the table below:
Industry Current Illicit Drug Use % Current Heavy Alcohol Use %

Construction 11.6 16.5

Mining 5.0 17.5

Hospitality &

Food Service 19.1 11.8

Retail 10.3 9.0

Manufacturing 7.4 9.7

Utilities 6.1 10.3

Arts &

Entertainment 13.7 11.5

Real Estate 10.9 8.5

Industry Current Illicit Drug Use % Current Heavy Alcohol Use %
Construction 11.6 16.5
Mining 5.0 17.5
Hospitality & Food Service 19.1 11.8
Retail 10.3 9.0
Manufacturing 7.4 9.7
Utilities 6.1 10.3
Arts & Entertainment 13.7 11.5
Real Estate 10.9 8.5

Minimizing Your Risk

To protect your employees, your clients and your business, it is imperative to have a drug-free workplace policy and program in place. Such initiatives have proven to increase morale, reduce workplace accidents, injuries, and fatalities, lower employee theft rates, increase productivity and lower employee turnover. When designing and implementing a program for your business consider including these elements:

* A Drug-Free Workplace Policy: A written document distributed to all employees that sets the expectations and tone for your organization’s drug-free program.

* Employee Training: A recurring training program for both employees and supervisors to provide both knowledge and awareness of the risks, warning signs and company’s policies regarding substance abuse in the workplace.

* An Employee Assistance Program (EAP): An external resource made available for employees who test positively for drugs, ask for assistance or are referred by their manager for a possible problem with drugs or alcohol.

* Drug Testing: To identify drug users and deter “would-be” drug users among employees in the workplace.

Let us know how we can assist you with the development and implementation of your Drug-Free Workplace Program. From drug testing solutions to online training courses and build awareness, our resources can assist in minimizing your risk while taking a weight off your shoulders.

Course Links:

DOT Reasonable Suspicion Training

Drug-Free Workplace Employee Training

Substance Abuse in the Workplace: What Supervisors Need to Know

A New Study Suggests There is a Simple Answer to the Current Talent Shortage

A new Manpower study suggests the current labor pool often lacks the skills employers are seeking. Out of 42,000 employers that Manpower surveyed, 40 percent say they’ve struggled to fill roles.  Many complain that the world is changing so fast it’s hard for the labor pool to keep up.

What are these elusive skills, you ask? After a lack of applicants, employers listed a lack of both technical competencies and soft skills.

Luckily, companies have found a simple solution to this problem: training. It’s often more economical to train existing employees and it demonstrates your willingness to invest in the employees you already have.  Here at Wolfe, we practice what we preach. Many of our employees have been here over ten years and have been promoted several times.

The Most Important Skill: Learnability

According to Manpower, the number of employers training and developing existing employees to fill open positions has doubled from 1 in 5 to over half.  Now 53 percent offer training and development to existing staff. This makes the most important skill an employee can have, the ability to learn.

We have some great courses–to sharpen both technical and soft skills–on our eLearning platform. These are some of our favorites:

Business Writing for Supervisors and Managers

Conducting Effective Performace Appraisals
Managing the Impact of Social Media in the Workplace

Excel 2016: Complete Training
Google Apps
Project 2016

If you have questions about any of the courses or want to know how to manage eLearning for your employees, give Melissa a call at 828.771.3113.


Health Reimbursement Arrangements (HRAs) Are Back!

Last week the 21st Century Cures Act was signed into law and effective January 1, 2017. Among many things from a moonshot cure for cancer to funding for substance abuse, the Act allows small employers of less than 50 employees, and who do not offer a group heath care plan, to once again offer Health Reimbursement Arrangements (HRAs) to their employees.

The 21st Century Cures Act once again makes HRAs permissible for small employers, with some changes. These Q&A should help you decide:

Q. Who is a qualifying small employer?
An employer that has fewer than 50 full-time equivalent employees and does not offer a group health plan.

Q. Must all employees be eligible for the HRA?
No. However, only certain employees may be excluded. For example, the company can exclude employees who have been employed for less than 90 days, are under 25 years old, are part-time or seasonal, are covered by a collective bargaining agreement, or are resident aliens without U.S. source income.

Q. May the employee contribute to the HRA?
No. Salary reduction contributions are not permitted. The HRA must be funded only by the company.

Q. What expenses can be reimbursed by the HRA?
Expenses that constitute “medical care,” including health insurance premiums, incurred by the employee or one of the employee’s family members.

Q. Is there a maximum benefit?
Yes. The HRA may reimburse up to $4,950 per year for an employee with employee-only coverage, and up to $10,000 per year for an employee with coverage for the employee and at least one dependent. These amounts are pro-rated if the employee is not covered by the HRA for the entire year. (These amounts are indexed to inflation and will increase in future years.)

Q. Are the reimbursements taxable income to the employee?
No, provided that the employee is enrolled in minimum essential coverage. Reminder: “Minimum essential coverage” includes most individual and group health insurance, but does not include dental-only coverage, vision-only coverage, or coverage for a specified disease or illness.

Q. Must employees lose their unspent HRA balances at the end of year?
No. A company may design the HRA so that the year-end balance carries over, or not.
Q Is a notice required? Yes. Employees eligible for the HRA on the first day of a given year must be given notice at least 90 days before the first day of the year. However, notice will also be considered timely if it is given within 90 days after the 21st Century Cures Act was adopted.

Common Sense Counsel: so if you are one of the hundreds of employers who gave up on offering group health insurance under ObamaCare, you now have a chance to help your employees with an HRA. Time is critical because you must provide employee notice within 90 days of January 1, 2107 to offer this benefit in 2017.

Tommy Eden provides counsel and expertise for Wolfe inc. He is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-246-2901. Blog at

How Many Long Term Users are Hooked on Opioids?

Opioid deaths have now surpassed those from cars and guns and now a new poll conducted by the Washington Post and the Kaiser Family Foundation reports that one-third of long-term opioid users say they are hooked on prescription medication. Here are some other takeaways from the survey:

  • Virtually all of the users surveyed said they were introduced to the substance by a doctor’s prescription.
  • More than 6 in 10 said doctors offered no advice on how of when to stop taking the drugs.
  • 1 in 5 said their doctor offered little to no information about the risks of taking the drug.

This survey suggests doctors should do more to advise patients about the risks and offer guidance on how to quit the drug. As we’ve written before on Wolfe Watch, insurance companies make matters more complicated for doctors by too readily covering the medication, preferring it to other forms of pain management. It’s much easier to get the insurance company to cover the medication that to cover treatment.

You can read the article here at the Washington Post. It’s part of a series on the forces that are driving higher death rates for whites in midlife.

Opioid addiction

What Happened to the New FLSA Overtime Rule?

Days before the deadline, a federal judge put an injunction on the new FLSA rule that would have entitled 4 million workers to overtime pay.  U.S. District Judge Amos Mazzant III ruled that the new regulations ignored Congress’s intent by supplanting the duties test.

What Happens Now?
The Department of Justice can appeal the decision, which would take them through the 5th District Court.  President-elect Trump can tweak Obama’s rule as he too has shown concern for wages being too low. For now, the threshold for automatic eligibility for overtime pay remains at $24,000 per year. In other words, keep doing what you’re doing.

What Tuesday’s Election Means For Employers

It’s difficult to make predictions about what last week’s election means for businesses. There are so many so many variables to consider.  So, let’s look at what we do know.

Four States Legalized Recreational Marijuana

Maine, Massachusettes, Nevada, and California all legalized recreational marijuana. As we’ve said before, drug testing policy won’t change until federal law changes. Though momentum is going in the direction of legalization. Who knows when this trend will reach critical mass. For now, keep doing what you’re doing to foster a drug-free workplace.

Arizona’s measure failed.

Four States Legalized Medical Marijuana

Montana, North Dakota, Arkansas, and Florida all legalized medical marijuana.

Four States Raised the Minimum Wage

Washington, Arizona, Colorado and Maine voted to increase the minimum wage in their states. South Dakota’s measure to lower the minimum wage for minors failed. The jury is out on what this will mean for local businesses. Proponents say increasing wages will put more money into people’s pockets, stimulate demand, and grow the economy. Critics argue that increasing wages will force some businesses to cut hours or employees.

If you’re interested in what it meant for Seattle, here’s an article that looks at what happened after they implemented a minimum wage pay raise. According to a study by the University of Washington, employment went up and the economy is doing well. 

Tax on Tobacco Products

Breaking the trend of four states going for it, whatever it is, out of four state measures to increase taxes on tobacco, only California approved a tobacco-tax increase.

So California will see increased tax revenue from marijuana sales and tobacco sales. Maine has legalized marijuana and raised the minimum wage.

What is it with the number four?

As always, if you have any questions about your drug testing or background screening policies, give us a call at 800.230.2991.



Background Screening in the “Gig Economy”

By 2020 an estimated 40 percent of the workforce will fall into the category of freelance work according to a recent Intuit study. Some of this increase is attributed to traditional employers hiring more contractors, but also to new app-driven companies like Uber and Lyft that hire thousands of drivers every year. With so many non-traditional employees entering the workforce through non-traditional means, it begs the question: How will these new workers be vetted? Is a quick database search enough?

How Reliable Are State Databases?

Contrary to popular belief, there is no comprehensive and complete record of criminal history. Databases are a good start, but they are only as good as they information they contain. How often are they updated and how complete is the information? Consider these findings from a 2015 Government Accountability Office report:

  • 10 states reported their databases were 50 percent or less complete
  • 13 states were less than 75 percent complete
  • Only 20 percent of states reported their databases were 75 – 100 percent complete

Database Searches Aren’t Enough

Wolfe screeners start with a database search, but we don’t stop there. We send runners straight to the courts, to state and county courthouses to get final disposition records that are too often missing from state databases. And remember, FCRA requires that all hiring decisions be based on dispositions. We provide the most current, most complete information available to make employment decisions. Even better, we can provide a tailor-made screening report based on the needs of each client. To find out more, give us a call at 800.230.2991.

Five States Will Legalize Marijuana in November

On Nov 9th, voters will be deciding on more than just who will run our country for the next four years. Voters in five states will vote on measures to legalize and regulate marijuana use as well. Recent polls show a “yes” vote will win in all five states: California, Arizona, Massachusettes, Maine, and Nevada.

What does this mean for fostering a drug-free workplace? Until the federal law changes, there is no reason to question your drug testing policy. Marijuana may be legal in the state, but that doesn’t mean companies can’t test for its use. However, with more than 25 percent of Americans living in states where marijuana is legal, the passage of these measures will put pressure on congress and the DEA to reevaluate their classification of cannabis as a drug. Once that happens, we will need to revisit this issue. Stay tuned…

You can read more about these ballot measures in Marijuana’s Moment in The Atlantic.