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STATE UPDATES

North Carolina

North Carolina Administrative Office of the Courts Proceeds with Proposed Data Changes
The North Carolina Administrative Office of the Courts (AOC) has proceeded with their plans announced last December to change the manner in which data is returned to third-party providers such as GIS. This change reduces instant results to basic elements (name, DOB, case number, etc) without an indication of the charges or disposition. While a court case is pending to return the results to their previous standard, an injunction has been denied, allowing North Carolina to provide the significantly limited data pending the lawsuit’s final judgment. However, as GIS’ standard is to validate instant results for FCRA compliance, we expect limited impact to time service.

FEDERAL UPDATES

HIPAA Final Rules Deadline Announced
The deadline for the final rule on modifications to HIPAA privacy, security, and enforcement rules is March, The Department of Health and Human Services (HHS) writes in its semi-annual regulatory update—published last month in the Federal Register.

This is the most specific timeline federal officials have given regarding HIPAA and HITECH rules in limbo. In December, a senior official with the Office for Civil Rights (OCR) said the HIPAA privacy and security rule enforcer plans to release final rules regarding HITECH and HIPAA "in 2011."

Adam H. Greene, senior health information technology and privacy specialist at OCR, told an audience at the "2010 ONC Update" that he did not know a specific time of 2011 the rules would be released but added they would be published "contemporaneously." OCR's intention is to avoid staggering compliance dates.

Greene also said a proposed rule on accounting of disclosures of EHRs will be released in 2011. HITECH calls for OCR to expand the HIPAA accounting disclosures provision to add treatment, payment, and healthcare operations disclosures when they're through an EHR. HITECH calls on the HHS secretary to balance the interest of individuals who want to learn the information versus the burden on covered entities.

Federal Reserve Board Issues New Report Studying the Disparate Impact of Credit Histories
The Federal Reserve Board has issued a new report entitled “Does Credit Scoring Produce a Disparate Impact?”

The use of credit reports in employment decisions has recently become a controversial issue. It has been put up for debate whether or not making hiring decisions based on credit history could have a disparate impact on racial and ethnic minorities with the end result of hiring fewer minority applicants. A recent report from the Federal Reserve Board calls into question the generally held belief that hiring decisions based in part on credit histories have a disparate impact on racial and ethnic minorities. Rather than analyzing the potential disparate impact in hiring decisions, the October 12, 2010 report analyzed a parallel question: whether the use of credit scores in lending would have a disparate impact on applicants for loans. An important distinction between these two questions is that employment-purpose credit reports do not show a credit score; but they do show the types of information that credit bureaus use in their calculations of credit scores.

The report found no evidence that credit scores create a disparate impact based on race or gender. Since credit scores generally add information not available on the face of an employment-purposes report, a reasonable inference is that credit history does not create a disparate impact either.
The report did find limited evidence that credit scores create a disparate impact based on age. Usefully, it identified the variable that caused the credit scores to create a disparate impact. That variable was the average age of the person’s credit accounts on file. Inclusion of this variable lowered credit scores with age, causing younger people, foreign nationals, and recent immigrants to have lower credit scores and older people and native-born citizens to have higher scores. This means that the average age of credit account is potentially misleading and might cause a disparate impact if used in employment decisions. For users of employment-purpose credit reports, a reasonable precaution would be to avoid placing any weight on any available information about the age of accounts. (The age of the oldest account appears on sample reports we reviewed; average age did not.)

We strongly urge that our clients have their equal employment opportunity lawyers review this paper (available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1726601) and the criteria they use for making decisions based on credit history.

E-Verify May Shut Down April 8th
The Department of Homeland Security has advised that E-Verify will be affected and not operate in the event of a federal government shutdown. The current federal budget is in effect until April 8, 2011, however if a budget agreement is not reached by then, E-Verify will shut down until funding is restored. GIS’s Employment Eligibility Verification (EEV) service will continue to function and hold all EEVs in a queue and submit them when E-Verify service is restored.

E-Verify Anti-Fraud Enhancements Announced
The DHS and USCIS have announced the expansion of E-Verify program's capabilities to include U.S. passport photo matching-further enhancing the integrity of the program by enabling E-Verify to automatically check the validity and authenticity of all U.S. passports and passport cards presented for employment verification checks.

ICE to Continue to Focus on Prosecuting Employers that Violate Immigration Law
ICE is focused on investigating and prosecuting employers who exploit or abuse their employees and have a history of knowingly and repeatedly hiring illegal workers. In FY 2010, ICE initiated a record 2,746 worksite enforcement investigations, criminally arrested 196 employers for worksite-related violations, and issued a record 2,196 notices of inspection to employers. In addition, worksite investigations resulted in nearly $37 million in judicial fines, forfeitures, and restitutions. ICE also debarred 97 business and 49 individuals from doing business with the government, thereby bringing a new level of integrity to the contracting process, according to an ICE representative.

To add to this, 1,000 more employers recently received Notices of Intent from ICE, marking the start of an I-9 audit.

Recent Report finds significant improvements to the E-Verify Program
A recent report about E-Verify issued by the Government Accountability Office (GAO) cites improvements in the reduction of mismatch rates, ensuring employer compliance, and establishing better safeguards for employees’ personal information. GAO reviewed USCIS’s E-Verify program by analyzing E-Verify query data from 2009 to 2010. GAO reported a significant reduction in the number of Tentative Non-Confirmations (TNCs), citing a 5.4 percent decrease in TNCs since FY2007. In addition, the report noted how E-Verify has added safeguards to minimize and secure the handling of new employees’ personal information by creating a privacy branch; safeguards that limit both the data collected for E-Verify and the people who can access the data. To read GAO’s report, as well as USCIS’s response to the GAO report, please visit http://www.gao.gov/new.items/d11146.pdf.

USCIS Updates I-9 Handbook
The USCIS has released an updated version of its I-9 handbook which clarifies and reinforces many critical points including when an I-9 can be started, how long an employer has before the I-9 must be completed, how long to keep the I-9, and more. Please seehttp://www.uscis.gov/files/form/m-274.pdf for the updated handbook.

Florida Legislation Pending to Bar Illegal Immigrant Employment
The proposed bill would require Florida employers to use the federal E-Verify employee screening system. The measure contains a safe-harbor provision that provides a rebuttable presumption that employers using E-Verify did not knowingly employ an unauthorized alien.

Certain Floridian State Agencies Must Use E-Verify
Governor Rick Scott has signed an Executive Order, effective immediately, directing all state agencies under the direction of the Governor to verify the employment eligibility of all current and prospective agency employees through the United States Department of Homeland Security’s E-Verify System. These agencies are to include, as a condition of all state contracts, an express requirement that contractors utilize the E-Verify system to confirm the employment eligibility of: (a) all persons employed during the contract and (b) all persons, including subcontractors, assigned to the contractor to perform work under the contract with the state agency. Also, agencies not under the direction of the Governor are encouraged to verify the employment eligibility of their current and prospective employees utilizing the E-Verify system.

Certain Indiana State Agencies Must Use E-Verify
Indiana has passed SB 590 requiring state agencies, political subdivisions, contractors with public contracts for services with a state or political subdivision, and certain business entities to use E-Verify. The bill also includes Arizona-like immigration including requiring law enforcement officers to verify the citizenship or immigration status of individuals in certain situations. The bill goes into effect on July 1, 2011.

Mississippi Legislation Pending to Stop Illegal Immigrant Employment
Mississippi has passed Senate Bill 2179 which would amend E-verify requirements to require employers to keep a record of the verification for the duration of the employee’s employment or at least three years, whichever is longer. The measure would also extend the authority to impose sanctions or seek penalties authorized under the law to the Department of Revenue, Board of Public Contractors, and any other state agency, department or government entity, in addition to the Department of Employment Security, Secretary of State, Department of Human Services, and the Attorney General.

The bill would also make it a misdemeanor for a person who is unlawfully present in the United States and who is an unauthorized alien to knowingly apply for work or solicit work in a public place in the state. The bill now goes before the House, which failed to pass similar immigration measures last year.

Certain Rhode Island State Agencies No Longer Required to Use E-Verify
Governor Chafee has signed an Executive Order, effective immediately, that rescinds the Illegal Immigration Control Order that required certain state agencies and vendors to use E-Verify.