DC Velocity - December 2013

30 DC VELOCITY DECEMBER 2013 www.dcvelocity.com
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termination records. To date, we have almost 1. 5 million termination records in our database, which we call “PRE” or “Previous Records of Employment.” In addition, we supply all the records recruiting managers need to review before making a good hiring decision.

QPre-employment screening is a basic component of the hiring process. What has changed to make screening more difficult?

A Pre-employment screening has changed because the Federal Trade Commission (FTC), which regulates the Fair Credit Reporting Act, and the Equal Employment Opportunity Commission (EEOC) have stepped up their regulation of background screening companies and perceived discrimination against ex-felons. The FTC is more aggressively auditing background screening companies, like Driver iQ, to ensure that background screening reports, which are consumer reports, are timely and accurate, and follow laws protecting consumers’ rights in the way information is gathered and used. That means the driver applicant, who is the consumer in these instances, can object to a report even before a hiring decision has been made, as well as after.

The EEOC has stepped up efforts to eliminate what it calls “disparate impact” on minorities when employers refuse to hire convicted felons or individuals with an arrest record. In essence, employers can only deny employment to ex-felons if the crime has some relation to the job— think vehicular homicide and driving a truck—the crime was committed recently, and the individual has not demonstrated any rehabilitation efforts. The EEOC also frowns on denying employment based in whole or in part on arrest records. As a result, there is more paperwork, and carriers are exposed to higher enforcement fines and a higher degree of potential liability to class-action lawsuits.

QWhat are the red flags that companies should be aware of when screening an applicant? A Carriers make mistakes when they rush an applicant hrough the screening and hiring process. In the past, carriers may have relied solely on criminal record databases to determine if an applicant had a record. Such databases, by definition, contain stale information that does not meet the requirements of the Fair Credit Reporting Act.

Thus, it is unacceptable to the FTC. Background screening companies must re-verify that the applicant and the criminal record represent the same individual, and that nothing has happened since the conviction, such as the record’s being expunged.

Further, carriers can no longer have a blanket policy that
denies employment based solely on the presence of an
applicant’s criminal record; again, the crime must have
some nexus to the job the applicant is applying for. In addi-
tion, employers can no longer run criminal checks on a
select few without it appearing that they are using the back-
ground check to discriminate against a protected class.
Carriers must also be aware of local and state laws that
might preclude even asking about criminal convictions on
the application. For example, in Newark, N.J., employers
cannot ask about criminal convictions until after a condi-
tional offer of employment has been made.

QIt’s tough enough these days finding qualified drivers. Will more rigorous screening practices winnow out prospective applicants that in the past might have been hired?

A Ironically, both the FTC and the EEOC believe their actions will increase the labor pool because applicants won’t be denied employment based on faulty reports or age-old crimes. For carriers, however, it has complicated the process and has extended the time from when the application is made to when a carrier can put a driver in a truck.

QAn analyst recently said tongue-in- cheek that the “mother of all capacity shortages is still another year away.” We’ve been waiting for widespread shortages, yet all we’ve seen are short-lived shortages that are region-specific. Will we see any meaningful crunch in the next two to three years? Have shippers and 3PLs done an effective enough job of re-engineering their supply chains so that a crunch, if one comes, won’t matter?

A I, too, predicted significant capacity shortages after looking at the decline in equipment purchases during the recession, the changing demographics, and upcoming regulatory induced productivity losses. But what I, and others, didn’t predict was the sideways nature of the recovery. Everyone seems to be in a holding pattern waiting for something to happen. First, we were waiting for a decision on the debt ceiling. Then it was the election. Then it was ObamaCare. Until there is stability and certainty in the markets, no one is going to make any major, irreversible commitments requiring huge investments.

Regarding 3PLs, I don’t believe they have done an effective job to reduce the impact of the capacity crunch. No matter what they “re-engineer,” all their algorithms still depend on someone, somewhere, somehow owning a truck. At this point, there are simply not large enough returns to justify investing in iron. Most new equipment purchases are simply to replace old, inefficient equipment. No new significant capacity has been added since 2007. ;