MI & CA Redactions Update

What to expect from recent PII redaction in Michigan and California

You have probably already heard about recent legislation in California and Michigan that may cause serious changes to the way criminal records are reported for employment screening purposes. The new rules, both designed to combat possible identity theft, may make it nearly impossible to report accurate results from these two states. And at the very least, consumer reporting agencies need to brace for possible delays.

In 2019, Michigan announced a ruling that would redact date of birth (DOB) before records can be shown to the public, including employment screening firms doing “consent-based” screening. The redaction ruling was intended to guard against identity theft, and July 1 of this year was the go-live date. But lobbying efforts by organizations like the Professional Background Screeners Association (PBSA) have helped get that date moved to January 2022 … for now.

PBSA proposed two possible solutions for the Michigan rule that could allow the rule to do what it was intended to do, but also allow CRAs to do their jobs. The first solution focuses on the topic of consent. Could CRAs simply show they have consent? But the question around that is, does the consent have to be specific? The possible problem with this solution is that court clerks could be extremely overwhelmed by the number of consent documents. And some clerks could refuse altogether due to their lack of resources. Another question revolves around “blanket certification” by each researcher. Could that suffice? The industry believes the court may not be willing to allow that option.

A second solution would be for CRAs to use the Michigan State Police database. The problem is that it includes only fingerprinted individuals, could miss pending cases, excludes low-level offenses, and may be insufficient for regulated industries.

In Michigan, for now, PBSA was successful in moving the July date to the new date of Jan. 1, 2022. PBSA does have more time. The organization is currently working on a legislative strategy and possible litigation. But these options could take longer.

In California, companies that hire employees and retain contractors should brace for a significant slowdown in background checks that include criminal record searches in state courts.  This will result from the court of appeal’s opinion in All of Us or None v. Hamrick, which prohibited the Riverside Superior Court from allowing its electronic criminal case database to be searched using an person’s known DOB or driver’s license number. CRAs rely on searching such indexes for most criminal background checks in California state courts.  And, while the lawsuit was brought against only the Riverside Superior Court, the court of appeal’s ruling impacts most California state courts, because the court’s ruling was based on a statewide law.

Just like in Michigan, PBSA is working on alternative paths. The organization is trying to modify the rule via a legislative campaign. But for now, California will likely redact DOB and driver’s license numbers from online terminals. And Los Angeles County may stop verifying in person.

Why does all this matter?

The Fair Credit Reporting Act (FCRA) requires maximum possible accuracy – see section (1681e(b)). This includes matching records to the consumer, which include processes that are required for common names.

Common practice and PBSA accredited guidelines recommend the following to maintain accuracy:

• Two identifiers for uncommon names.
• Three identifiers for common names.

(The organization advises using census data to determine what constitutes a common name.)

Is this a continuing trend? PBSA is afraid the more liberal states are likely to follow suit. These states could trend toward adopting privacy laws (like in Europe). Employee-friendly states tend to be more liberal. And employer-friendly states tend to be more conservative. It is highly likely these two states could be the beginning of a trend in other states.

Advice to CRAs

Prepare for delays in California and Michigan. These delays are extremely possible. Background screening companies should notify their clients’ human resource departments and company leadership. Screening firms should also watch for rule-making instances in other jurisdictions. And for Michigan clients, screening companies should start uploading authorization forms now to get ready for that possible consent solution if it happens. And finally, for now, background screeners should consult legal counsel on how to handle name-match only records.

In addition, PBSA is actively seeking help from its members and their employer clients with these two state matters. Go to www.thePBSA.org to learn how you can help. Here you can also find up-to-the-minute updates on which counties in these two states have already started redacting personal identifying information (PII) from criminal records.