Put your hands up people. This is a stick up.

We’ve all seen this movie, right? The bank robbers enter the bank, take whatever they can and then flee the scene before the cops get there.

Well, in an ironic twist, we’ve got a real-life stick up situation in the state of New York. Only the robbers are the state legislatures who just passed a bill (that will be signed into law by Governor Cuomo on Friday), that will increase an already outrageous Office of Court Access (OCA) fee from $65 per search, per name to a downright ludicrous $95. Hang on. I’ll let that sink in for a second.

And unfortunately, in this case, no one will be pursuing the robbers absconding with the money.

All kidding aside, employers who conduct employment background checks in the state of New York already groan when they have no choice but to use the OCA and bear a court fee that dwarfs any others assessed in the United States. Most courts across the country don’t charge a fee to access their records. Those that do average anywhere from $1 to $10.

At least their overt explanation for the increase is admirable. They intend to take the increased fees to support an indigent defense fund. One wonders (okay, I wonder) if the underlying motive is to discourage employers from conducting criminal background checks on rank and file employees.

New York employers will be hit hardest, but even those that aren’t located in the state but hire people that either live there or have lived there in the past, will be affected. The existing fee already blows the budget and makes employers question whether it’s worth it to conduct background checks there in the first place. Thankfully, most have continued to do so. However, raising this fee by $30 might have those on the fence reconsidering.

Those in regulated industries have no choice. They are obligated to conduct these checks. Will these costs curb their hiring plans, or cause them to recruit candidates outside of New York? Will non-regulated employers forego or limit who they screen as a condition of employment? And if so, who wins? Employers conduct these checks to protect themselves, their employees and customers.

CRA’s face additional impact beyond that sticker shock they will be blamed for when their customers get their invoices. In most cases, background screeners simply pass through court access fees with little to no mark up. This increased fee has the potential to create significant cash flow problems. Let’s say you conduct 1000 searches in the state of New York every month. Those access fees are due on demand, so you are floating $95,000 of cash (for which there is no return on this “investment”) throughout the month. You then bill your client at the end of the month and extend Net 30 terms. If you’re lucky, your clients pay within those 30 days. In the meantime, you’ve had nearly $100k sitting out there for an extended period of time.  

I think there are two avenues that are worth pursuing here.

  1. Ratchet Up Lobbying Efforts- Groups such as NAPBS were aware of this bill and did everything they could to advocate against this effort. Now that the bill is a reality, this would be a great time to build a large coalition of employers and the associations that represent their interests and impress upon the state’s legislators the real impact they face. Of course, this isn’t going to happen overnight, but there’s always the chance they could reconsider when they see ill-effects.
  2. Invest in Data- Clearly, we’re reaching a tipping point in New York and it’s time to figure out if there are enough criminal and, or incarceration record data sources that would allow us to bypass the OCA altogether or at least limit it to confirming the possible records that are found in that database. Employers and CRA’s alike have already been salivating at this possibility and that was before this $30 increase.

What Can CRA’s Do?

  • Communicate Now– It is time to talk openly with your affected clients about this new development. At a minimum, you should email your clients immediately and notify them of the fee increase. I would also call affected clients and let them know what to expect. Make sure to include the fact that your company has nothing to do with the increase and that all CRA’s will be affected.
  • Invoice Notifications- Include a brief note about the increased fee in your next invoice to affected clients.
  • Join the Lobby– If you haven’t gotten involved, reach out to NAPBS and find out how you can help support their efforts to advocate for the repeal of this fee. Perhaps you can encourage your affected clients to get involved as well.
  • Modify Your Platform– If you publish the court access fees a client will incur at the time of order placement, make sure your platform is up to date.