Effective July 21, 2011, a Dodd-Frank amendment to the Fair Credit Reporting Act will affect employers who use a consumer report that includes a credit score. 

 Under the amendment, if an employer uses a consumer report that includes a credit score in order to determine employment eligibility, the employer will be required to disclose that a credit score was used.  The employer must also disclose the credit score itself, up to four key adverse factors in the score, and the name of the agency that provided the score.  This information allows the individual to contact the agency to correct any error that may be in the consumer report. 

DOL Issues Final Rule Amending Fair Labor Standards Act

 

On April 5, 2011, the Department of Labor issued a final rule that amends Fair Labor Standards Act (FLSA) regulations while leaving other FLSA provisions unchanged.

For private employers, the following provisions are relevant:

1. Employers may pay an hourly “youth opportunity” wage of $4.25 per hour to employees younger than 20 years old in the first 90 calendar days of employment.  However, employers cannot displace employees to hire workers at the youth opportunity wage.

Article Highlights

• Most small businesses must comply with the Red Flag Rules
• Identity theft prevention procedures must be implemented
• Boards of Directors must be involved in policy making

March HR Training: 6th Article in a Series of 8

Most small businesses are defined as entities that hold a “transaction account” belonging to a consumer and therefore must comply with Red Flag Rules of the Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”).

If you haven’t already started thinking about how your institution will comply with the newly established Red Flag Rules, you have until November 1, 2009 to put a plan into action. The rule is a result of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which directed financial regulatory agencies to propagate rules requiring creditors and financial institutions to formally address the risks of identity theft and develop a mitigation plan. As a direct result, Federal Trade Commission requires the development and implementation of a written identity theft prevention program – the crux of which is meant to prevent, detect and mitigate identity theft. understand why your organization must comply with the red flag rules: If you extend, renew, or continue credit for goods or services (examples include auto dealers, mortgage brokers, finance companies).If you collect information from customers to open an account or any other type of accounts where there is a foreseeable risk of identity theft in collecting or sharing information (examples include credit card accounts, margin accounts, cell phone accounts, utility accounts, checking accounts, and savings accounts). Identify someone in your organization that will take ownership of the plan and will be responsible for following up on claims of identity theft, communicating with customers and other subsequent creditors, and ensuring that the Red Flags policy is reviewed no less than annually to ensure it’s continued relevance to the workplace. Take a good look at your business and identify where the potential for identity theft exists. What types of covered accounts do you have? What data do you collect upon opening an account? How do you validate the identity of a person opening an account?Once you’ve completed your assessment, identify the situations that would be a red flag for your accounts and utilize these specific markers in your Red Flag Rules policy. Once you determine that identity theft has potentially occurred, you must act appropriately and consistently to mitigate the potential risks for the victim of identity theft. Your reaction to suspected ID theft should be multi-faceted and include actions such as: 
• reporting suspicious activity to the authorities
• monitoring an account
• changing password and/or security access
• contacting the consumer Compliance requires that your observance of the Red Flag Rules be in writing in the form of a working document that permeates your business practices. The policy should have input from the Board of Directors or governing body. Everyone in the office should be trained and trained again when it comes to identity theft and utilizing the Red Flag Rules policy. The world changes at warp speed, and so do the tactics of identity thieves. Your pre-identified ‘go-to’ person should remain current on new risks or trends that arise and must incorporate such risks into the policy as needed, but no less than annually.