Federal labor law compliance: GINA and FCRA requirements

Compliance and the HR Functions

Reviewing the laws and Identification of two HRM compliance issues

Organizations as few as 14 employees are required to comply with at least 15 federal labor laws as well as some local and state laws. However, organizations that have at least 50 employees can be subject to 20 federal labor laws. Management of some small employees may believe that labor laws only pertain to large organizations, however, all small, medium and large organizations are required to comply with federal labor laws that affect them. Compliance of labor laws is very critical for effective human resources management (HRM). HRM compliance is the process where organizations are required to respect the federal labor laws during recruiting, selection, promotion and compensation of employee. (KPMG, 2013).

GINA (Genetic Information Non-discrimination Act) is one of the labor laws that organizations are required to comply to protect employees from genetic discrimination of employment and health insurance. (National Library of Medicine, 2014).Typically, employers are required to comply with the GINA Act to abide to the federal labor law. Under the labor law, genetic discrimination occurs when an employer treats employees or applicants differently based on their genetic change that can increase risks of an inherited disorder. In the United States, GINA Act is a federal labor law designed to protect employees and applicants from all form of genetic discriminations. Essentially, employers are required to comply with GINA Act to avoid the risks of prosecution. The law comes into effect on May 21, 2009, and the Title II under the GINA Act prohibits employers to implement genetic discrimination within an employment environment. Moreover, it is illegal for employers to use genetic information of an employee when making decision regarding promotion, hiring and other employment terms.

Consumer report is another issue that focuses on HRM compliance. Employers can use consumer report to make an employment decision, however, when employer decides to use a consumer report to make a decision regarding hiring, promotion, reassignment and retention, an employer must comply with the FCRA (Fair Credit Reporting Act). The FCRA states that employers should inform an applicant or employee that they could use a consumer report to make an employment decision. The notice should be in writing and stand-alone format. Additionally, employers must get a written permission from an applicant or employee before carrying out a consumer report on an applicant or employee. Failure of employers to inform employee is non-compliance with FCRA regulation. Part of FCRA regulation is that employers should not discriminate against an employee or applicant based on the information collected. Moreover, employers should refrain from misusing the information collected. (Bureau of Consumer Protection, 2014). Typically, employers are required to comply with the regulations discussed above to carry out effective HRM compliance.

Drawing Personal Experience or Research on the HRM Compliance issues

In the contemporary business environment, organizations are increasingly using different techniques to hire best talents to enhance organizational performances. Apart from conducting series of tests and interviews, employers can use consumer report to collect information on employee in order to make a decision on selection and recruitment. Some years ago, when I finished my university education, I sent job applications to several organizations, and some companies accepted my applications and schedule job interviews. One of the companies scheduled the interview online, and I was asked to answer series of interview questions to determine my competence for the job. After the interview, I received a reply that I performed excellently from the interview process and the next step is to submit my SSN (Social Security Number) to run a background check on me before considering me for the position. The company got to a length explaining the reason for collecting my SSN, and part of the reasons was to collect my credit report because the job required me to manage some products that worth several millions of dollars. After several contemplations, I refused to submit my SSN, and the employer dropped me from the job position despite the comment that I performed excellently in the job interview. My conclusion was that the employer was intending to use the consumer report information to make an employment decision. Thus, it can be very difficult for some employers not basing their decision on the information collected for selection and recruitment process because of the sensitivities of some job positions.

Essentially, employers are increasingly using information collected from consumer report to make a recruitment decision. Doyle, (2014) argues that organizations are increasingly using different tools to find a best candidate. For example, Bank of America normally does a background check on an applicant using a consumer report. The company can use consumer report to collect information on applicant, which include credit history, education, and criminal records. Moreover, it is also part of the policy of Bank of America to collect additional compliance checks if an applicant is to be hired for a certain line of business. Reflection of an applicant who has been successfully employed by Bank of America shows that Bank of America will not hire an applicant having a bad credit history. The argument is that an applicant who is unable to manage his or her own account will not be capable to manage another person's account. Although, the Bank of American will inform an applicant before carrying out the consumer report on an applicant in order to comply with FCRA regulation, however, the company still use the information collected from consumer report to make a decision on the selection and recruitment process.

Reference

Bureau of Consumer Protection (2014). Using Consumer Reports: What Employers Need to Know. Federal Trade Commission. USA.

KPMG (2013). Human Resources Regulatory Compliance. KPMG Report.

National Library of Medicine (2014).The Genetic Information Nondiscrimination Act (GINA). Lister Hill National Center for Biomedical Communications.

Robbins, S. & Judge, T. (2009). Organizational Behavior (13th edition). New York, Prentice Hall.