PDQ Legal

Arizona Medical Marijuana Act

In November, Arizona voters passed Proposition 203, the Arizona Medical Marijuana Act, which will allow qualifying patients with certain debilitating medical conditions, including but not limited to, cancer, glaucoma, HIV/AIDS, hepatitis C, ALS, Crohn’s, Alzheimer’s, and severe and chronic pain, to receive up to 2.5 ounces of marijuana every two weeks from dispensaries or cultivate up to 12 marijuana plants if they live 25 miles or farther from a dispensary.

Additionally, the law provides that employers cannot discriminate against patients, and a positive test for marijuana metabolites is not cause for disciplining or terminating a patient.

Social Security Number Randomization

Effective on or about June 25, 2011, all Social Security Numbers will be assigned on a random basis.

The following information was obtained from [http://www.ssa.gov/employer/randomization.html]

The Social Security Administration (SSA) is changing the way Social Security Numbers (SSNs) are issued. This change is referred to as “randomization.” The SSA is developing this new method to help protect the integrity of the SSN. SSN Randomization will also extend the longevity of the nine-digit SSN nationwide.

The SSA began assigning the nine-digit SSN in 1936 for the purpose of tracking workers’ earnings over the course of their lifetimes to pay benefits. Since its inception, the SSN has always been comprised of the three-digit area number, followed by the two-digit group number, and ending with the four-digit serial number. Since 1972, the SSA has issued Social Security cards centrally and the area number reflects the state, as determined by the ZIP code in the mailing address of the application.

There are currently 435 million numbers available for assignment. However, the current SSN assignment process limits the number of SSNs that are available for issuance to individuals by each state. Changing the assignment methodology will extend the longevity of the nine digit SSN in all states. On July 3, 2007, the SSA published its intent to randomize the nine-digit SSN in the Federal Register Notice, Protecting the Integrity of Social Security Numbers [Docket No. SSA 2007-0046].

SSN randomization will affect the SSN assignment process in the following ways:

It will eliminate the geographical significance of the first three digits of the SSN, currently referred to as the area number, by no longer allocating the area numbers for assignment to individuals in specific states. It will eliminate the significance of the highest group number and, as a result, the High Group List will be frozen in time and can be used for validation of SSNs issued prior to the randomization implementation date. Previously unassigned area numbers will be introduced for assignment excluding area numbers 000, 666 and 900-999. These changes to the SSN may require systems and/or business process updates to accommodate SSN randomization.

Credit Reports and Background Screening Considered by the EEOC and Congress

According to an October 18, 2010 Press Release by the U.S. Equal Employment Opportunity Commission (EEOC), in order to gather information on the practice of using credit histories as employment screening devices, the EEOC held a public meeting to explore the extent of this practice, its efficacy, and its potential impact on different populations on October 20, 2010. The EEOC will hold additional hearings on this issue prior to taking any action.

Congress is also investigating this issue. Before adjourning this month, lawmakers considered legislation (HR 3149) by Representative Steve Cohen of Tennessee that would prohibit private employers from requesting background checks, which include credit reports, to all but certain positions at financial institutions (i.e., banks, savings and loans, credit unions). Though hearings were held on the issue, the measure failed to progress out of committee.

Consumer Financial Protection Act

In a recent Federal Register announcement, Treasury Secretary Geithner announced that pursuant to the Consumer Financial Protection Act of 2010 (“CFP Act”), the Secretary of the Treasury designates July 21, 2011, as the date for the transfer of functions to the Bureau of Consumer Financial Protection (“CFPB”). On this date, “consumer financial protection functions” currently carried out by the Federal banking agencies, as well as certain authorities currently carried out by Federal Trade Commission and the Department of Housing and Urban Development, will be transferred to the CFPB. Specifically, as of the transfer date, the CFPB will assume responsibility for consumer compliance supervision of very large depository institutions and their affiliates and promulgating regulations under various Federal consumer financial laws. New authorities of the CFPB under subtitle C of the Act, as well as other consumer protection provisions, will become effective on the transfer date as well.

Prior to the transfer date, the CFPB will begin to conduct research relating to consumer financial products and services, develop its nationwide consumer complaint response center, plan and take steps to implement the risk-based supervision of nondepository covered persons, and prepare for the opening of outreach offices. Development of the supervision program for certain nondepository covered persons is significant because no Federal agency previously has had the responsibility of supervising these entities, such as payday lenders, mortgage companies, debt collectors, and consumer reporting agencies.

Governor Signs CORI Reform Prohibiting Massachusetts’ Employers from Inquiring About Criminal Convictions on “Initial” Applications.

On August 6, 2010, Governor Patrick signed into law legislation overhauling the Commonwealth’s Criminal Offender Record Information law (CORI). The new law contains several provisions that will affect employers’ use of the criminal histories of prospective and current employees.

Employers Should No Longer Ask About Convictions On “Initial” Job Applications.

The new law prohibits employers from asking questions on an “initial written application form” about an applicant’s “criminal offender record information,” which includes information about criminal charges, arrests, and incarceration.

E-Verify Three Day Rule

Since the Immigration Reform and Control Act became law in 1986, employers have understood that the I-9 needed to be completed within three days of hire. Background screening companies that became designated agents for E-Verify have also been aware that three days was the rule.

E-Verify was recently redesigned and during the training sessions, USCIS mentioned that employers “have three days after the employee’s date of hire” to open the case in E-Verify. Because this differs from the general understanding held by employers, USCIS was encouraged to clear up the confusion. On June 30, 2010, USCIS issued the following statement: “If the employee starts work for pay on Monday, the third business day after the employee started work for pay is Thursday (assuming all days were business days for the employer). The first day the employee starts work for pay is not included in the three business day calculation.”

Oregon Law Barring Credit Checks For Employment Purposes Effective July 1, 2010

On July 1, 2010, the Oregon Bureau of Labor and Industries will implement legislation (S.B. 1045a) which will prohibit the use of credit history for employment purposes including hiring, discharge, promotion and compensation.

The bill, which was passed by the legislature earlier this year, provides exceptions for financial institutions, public safety offices and other employers if credit history is “substantially job-related”. The Bureau of Labor and Industries has adopted final rules implementing the law, including the definition of “substantially job-related.” According to the final rules, an employee’s credit history is substantially job-related if an essential function of the job “requires access to financial information not customarily provided in a retail transaction”, or if the credit history is necessary in order for the employer to obtain insurance or bonding. Many employers believe that the language in the rules provides enough leeway for most employers to continue the practice of using credit histories for positions with access to sensitive financial information, according to a statement issued on June 9, 2010 from the Association of Oregon Industries, a major employer group.

Red Flag Rules Postponed Again to December 31, 2010

The FTC has once again postponed enforcement of the Red Flag Rules—this time to December 31, 2010. This may be due to pending litigation by the AMA as well as the ABA. Please follow the link to read further:

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Reg Flag Rule—New Enforcement Date of June 1, 2010

The FTC has passed regulations requiring certain “Creditors” and “Financial Institutions,” to create Identity Theft Prevention Programs if they have certain covered accounts. These regulations require that such entities must have these programs in place by June 1, 2010. The regulations, known as “Red Flag” rules, are designed to help uncover, prevent, or mitigate identity theft in different types of financial transactions.

Arizona Immigration Law Contested in Lawsuits

The “Support Our Law Enforcement and Safe Neighborhoods Act” (or Senate Bill 1070) was signed into law by Governor Jan Brewer on April 23rd. The most controversial feature of SB 1070 authorizes and compels law enforcement officers to verify the legal status of persons resonably believed to be illegally present in the country. The bill is scheduled to take effect on July 28, 2010.

Pursuant to SB 1070, employers must retain E-Verify verification records for the duration of a worker’s employment or three years (whichever is longer). E-Verify participation is required of Arizona employers under the Legal Arizona Workers Act. The new record retention requirement would presumably be satisfied by printing an E-Verify screenshot which shows the case verification. Alternatively, employers may annotate the Form I-9 with the case verification number or use electronic I-9 software which retains an electronic “paper trail” showing E-Verify completion. SB 1070 also provides employers with the affirmative defense to a state law charge of intentionally or knowingly employing an unauthorized worker if the employer can prove it was entrapped by law enforcement officials. In addition, SB 1070 makes stopping a motor vehicle to pick up and hire individuals for work a misdemeanor if the motor vehicle blocks or impedes traffic.

An amendment to SB 1070 designed to reduce the likelihood of racial profiling was passed on April 30th. House Bill 2162 limited the circumstances under which law enforcement officials should confirm an individual’s lawful immigration status. However, there were no significant changes to the employment-related provisions noted above.

The courts are already entertaining objections to SB 1070. Several lawsuits have been filed contesting the validity of SB 1070. Two lawsuits were filed on April 29th and another was filed by a group of interested organizations and persons including the ACLU on May 17th.

While awaiting the outcome of this litigation, Arizona employers are encouraged to keep the required E-Verify records (if not already doing so) by no later than the July 28th effective date.