LLESTERESTER S. RS. ROSENOSEN

AATTORNEYTTORNEY ATAT LLAWAW ANDAND CEOCEOEEMPLOYMENTMPLOYMENT SSCREENINGCREENING RRESOURCESESOURCES

WWWWWW.ESR.ESRCHECKCHECK..COMCOM

SSAFEAFE HHIRINGIRING DDREAMREAM TTEAMEAM PPARTNERSARTNERS

Lester S. Rosen is an attorney at law and founder and CEO of Employment Screening Resources, (ESR) a national employment screening firm accredited by the NAPBS.

Mr. Rosen, a former prosecutor and defense attorney, has qualified and testified as an expert witness in court cases, and has testified before the California Legislature on laws relating to background checks.

He is the author of “The Safe Hiring Manual,” the first comprehensive book on background screening and hiring.

He is a frequent speaker nationwide on the topics of background screening and due diligence.

He was the chair of the steering committee that founded the National Association of Professional Background Screeners (www.napbs.com), and served as the first co-chair.

AABOUTBOUT THETHE SSPEAKERPEAKER

Newton Software and Employment Screening Resources (ESR), have joined forces to provide a seamlessly integrated background screening solution.Completely paperless and seamlessly integrated into the Newton GUI.Orders are placed from the Newton system with one-click convenience.Real-time Statuses and linking to the final report are online at Newton.No Paper/No Delays – when you click “Background Check,” your applicant receives an email taking them to a secured site, where ESR collects confidential data (DOB and SSN), provides all required notices and obtains consent from the applicant via electronic “mouse” signature.

Industry Leading Industry Leading Integrated Integrated –– Totally PaperlessTotally Paperless

Background Screening SolutionsBackground Screening Solutions

The ESR AdvantageThe ESR Advantage

Accredited by the National Association of Professional Background Screeners –applies to less than 2% of all screening firms.All work performed in the USA – while some CRA’s process work in India and the Philippines putting personally identifiable information at risk with no recourse.Exclusive use of up to date primary sources of information, no aggregated 3rd party databases or sources that are not courthouse equivalent.State of the art software and security – PCI Security Council Compliant.ESR keeps clients informed on changes in law and legal requirements through its daily blog and regular newsletters.Legal compliance unequalled in the industry – ESR Assured Compliance system provides automated real-time Federal and State law compliance functionality.Initial and ongoing customized training and consultation provided without charge.

ESR is an Accredited Background Screening ESR is an Accredited Background Screening Agency Agency and Safe Hiring Authorityand Safe Hiring Authority

ESR is an Accredited Background Screening ESR is an Accredited Background Screening Agency Agency and Safe Hiring Authorityand Safe Hiring Authority

Consumer ProtectionLegal ComplianceClient EducationProduct StandardsService StandardsGeneral Business Practices

ESR has successfully passed a rigorous onsite audit, conducted by an independent auditing firm and has earned accreditation issued by the NAPBS Background Screening Credentialing Council (BSCC). ESR has demonstrated competency and compliance related to policies and procedures in the following areas.

*Less than 2% of screening firms have earned this certification.

ESR literarily wrote the book on background screening – considered by many professionals as the definitive text on the subject.

Employment Screening Resources Paperless Applicant Generated Report (AGR) System

Eliminates time consuming and error prone data entry by staff or the inconvenience of creating cover pages and faxing orders to your screening background screening provider

No need to chase down and manage multiple paper consent forms

Eliminates concerns about collecting dates of birth or social security numbers pre-hire

Applicant receives an e-mail with instructions to go online and initiate the screening process

Applicant electronically signs (E-signs) consent and authorization for background screening

Applicant supplies sensitive data directly to ESR – Employer does not see it pre-hire

Applicant provides all the information necessary for the selected level of screening

Access status and reports 24/7 from the ESR Enterprise system

State of the art security, data protection and redundancy

ESR Applicant Generated Reports (AGR)

ESR Applicant Generated Reports (AGR)

ESR Assured ComplianceESR Assured Compliance

With ESR Assured ComplianceSM you will never have to worry whether forms being used in the disclosure and consent process are current and up to date. All required changes happen automatically.

There is no action required on your part in the compliance process other than simply associating a state specific permitted purpose when a credit report is associated with the “AGR Alert”. If you don’t order credit reports, you have nothing to do.

ESR Assured Compliancesm is continuously updated to support all notices and acknowledgements required by federal and state laws.

All FCRA required elements must be conveyed to your applicant All FCRA required elements must be conveyed to your applicant The AGR System does this for you automatically with any changes The AGR System does this for you automatically with any changes

updated into the system as they occurupdated into the system as they occur

SSIMPLEIMPLE OORDERINGRDERING ANDAND RREPORTEPORT RRETRIEVALETRIEVAL

Applicant Supplies All Information and Signs Consent in AGR System

Initiate Order via Newton ATS System 1

Applicant Receives Email with Easy to Follow Instructions2

3

ESR Processes Background Check -- Newton ATS Shows Current Status4

Pick up Completed Report by Clicking on Secure Link from Newton ATS5

From the Newton ATS you “Request a Background Check”, choose the “Package Type” and Submit the Request. Your work if finished.

Initiate Order via Newton ATS System 1

After you initiate the background check through the Newton Software system, the applicantreceives an email with instructions on how to proceed and a URL to hireconfidence.netwebsite. The gateway to the AGR System.

Applicant Receives Email with Easy to Follow Instructions2

After the applicant clicks on the URL it takes them to hireconfidence.net website. Once they arrive the steps are intuitive and they are taken through the process one step at a time.

Applicant Supplies All Information and Signs Consent in AGR System3

On this screen our technology tests the users system and browser to assure it is up to date and will properly function with the AGR system. Additional instructions are also provided.

On the login screen the applicant enters the “one time use” credentials they received in the email invitation. The following slides looks at the process from start to finish.

State laws regarding credit reports are driven by two elements. The “alert” that you send to the applicant calling for a credit check and where the subject lives and will be working.

Based on the information about where the applicant lives and will be working,appropriate notices and acknowledgments are populated in the form. In the followingexample, the two California based requirements are included based on the subject’sselection of CA at the top of the form.

The various state and federal notices that must be supplied to the subject of the report are all populated in the AGR system allowing the subject to view and/or print a copy for his or her records.

Once a notice is selected for viewing, it displays in a new window that provides for scrolled viewing and archival printing.

The subject of the report electronically signs in a number of places. This procedure has not changed. Information referring to the E-sign process are for your reference and are not impacted by the new state based regulations discussed earlier in the presentation.

If the subject fails to make a required acknowledgement, the subject receives a specific reminder of what was omitted as displayed below.

In addition to the Electronic Signature, the subject also applies a physical signatureto the form by simply using a mouse. A physical signature is almost alwaysnecessary when a signed form is required by a prior employer, school or licensingagency. AGR makes this easy for everyone involved.

Once the applicant supplies the required information and e-Signs the consent, youcan follow the background checks progress from with Newton ATS.

ESR Processes Background Check -- Newton ATS Shows Current Status4

Once the background check is complete you will be provided a secure link in theNewton ATS allowing you to retrieve, save and print the report.

Pick up Completed Report by Clicking on Secure Link from Newton ATS5

SSUMMARYUMMARY

Applicant Supplies All Information and Signs Consent in AGR System

Initiate Order via Newton ATS System 1

Applicant Receives Email with Easy to Follow Instructions2

3

ESR Processes Background Check -- Newton ATS Shows Current Status4

Pick up Completed Report by Clicking on Secure Link from Newton ATS5

Employees are typically a firm’s greatest investment and largest costEach hire also represents a large potential riskEvery employer has the obligation to exercise “Due Diligence” in HiringAn employer that hires someone it either knew or should have known was dangerous, unfit or unqualified for the work can be sued for negligent hiring

Why Why Proper “Due Diligence” Proper “Due Diligence” is is

Mission CriticalMission Critical

Statistical certainty that a firm that does not do screening will hire someone with unsuitable criminal record or false credentialWorkplace violenceTime wasted in recruiting, hiring and trainingTermination ExposureFraudulent credentials: Up to 40% of resumes contain material lies or omissions about education, past jobs or qualificationsTurnover costs – 2 to 3 times their salaryBrand destruction – “just one bad apple”Lost customers and workplace disruption

The Parade of HorriblesThe Parade of Horribles

Per California survey, employers lose 60 percent of negligent hiring cases with verdicts averaging about $3 millionAverage settlement is $500,000 plus attorney feesCases will normally have some sort of serious harm (death, assault, rape, sodomy, child molestation, theft, embezzlement, identity theft)Employers have the ability, duty and resources to prevent harm through due diligenceJurors are often employees themselvesUnless employer has a compelling reason why injury not its fault, employers often lose

Negligent Hiring Lawsuits Negligent Hiring Lawsuits Are on Are on the Risethe Rise

What is the one question everyone will ask you if there is a bad hire?

How much time do you have in addition to everything else you are doing to be involved in litigation?

Certain industries have legal requirements.

Strong evidence to suggest that if a person lied their way into a job, they will be dishonest on the job.

Other Reasons for Safe HiringOther Reasons for Safe Hiring

SS – Sources of information are public and private records

CC – Consent in writing under Fair Credit Reporting Act and state laws

RR – Rationale (discourages applicants with something to hide, encourages honesty, demonstrates due diligence, and helps to hire based upon facts and not just instinct)

EE – Even-handed (similarly situated people treated similarly)

EE – Effectiveness – No single tool can be relied upon but need series of overlapping tools

NN – Not an FBI check or Big Brother watching but a valuable due diligence employment tool

Basics of ScreeningBasics of Screening

Beware – cheap databases are no substitute for due diligenceContrary to popular belief, there is no national database available to private employers to check criminal records or false credentialsFingerprint checks from FBI are only available when mandated by law are far from perfectPrivate databases are NOT official government databases but large private “data dumps”Beware of “false positives” and “false negatives”Primary method for obtaining criminal records is to physically look at each relevant courthouse!

No National Criminal or Credentials Databases

No National Criminal or Credentials Databases

Questions You Should AskQuestions You Should AskQuestions You Should AskQuestions You Should Ask

Choose your screening provider with the same level of care that you use in selecting anyprofessional service — knowing up front that all screening companies are not the same. Evaluateand choose the most qualified provider just as you do with your CPA firm and attorneys.

ESR suggests you ask three important questions of your current or prospective provider.

1. Are they accredited, and if not, why not. A seemingly inexpensive background check improperly performed may turn into an expensive lawsuit down the road.

2. Do they exclusively rely upon “primary source” or “primary source equivalent” information versus searches made against sketchy third party databases or incomplete online sources.

3. Do they send any domestic work offshore or use at home operators putting sensitive personally identifiable information of your background check subjects at needless risk.

1. ESR is accredited. 2. ESR uses only primary source or equivalent information. 3. ESR does not offshore any domestic work nor does it use home operators.

32

Thank you for taking your valuable time to attend todays webinar. We hope that you found it informative.

For more information about the ESR / Newton Software Seamless – Totally Paperless Integration, click on the ESR link on the Newton Software Partners Page, or contact an ESR Solution Specialist toll-free at 888.999.4474

Employment Screening Resources (ESR) is The Firm That Wrote the Book on Background Screening: The Safe Hiring Manual - The Complete Guide to Keeping Criminals, Terrorist and Impostors Out of Your Workplace

THANKTHANK YOUYOU!!