Managing Driver Risk through MVR Monitoring
By Sean Quillivan
In today’s difficult business environment, it’s critical for companies to make a firm commitment to risk management. One essential element of an overall risk management program is employee screening. By carefully screening prospective hires, companies can help ensure that they hire reliable, honest employees. Independently, companies should monitor existing staff members to reduce risk after the hiring process. Such screening can help prevent hiring mistakes, on-the-job accidents, and — potentially — the sometimes catastrophic costs of negligent hiring. With so many important benefits, employment screening provides an excellent return on investment.
Companies with employee drivers should take every reasonable step to make sure that those individuals are safe drivers to reduce risk and protect their businesses. Among those steps is the use of motor vehicle reports (MVRs) to check an applicant's driving history. This is standard practice for many employers striving to ensure safety within their company. In addition, companies regulated by the Department of Transportation (DOT) are required to request MVRs annually on their drivers.
The size of a company should not matter to an employer interested in safety and minimizing risk. All companies should use MVRs to help identify and monitor their employees’ driving habits. This is a matter of common sense. A less-than-favorable driving history can be an indicator of risky or careless behavior. In contrast, a clear driving record can indicate a safe driver, although experience and age should also be considered.
Deciding when and how to use MVR information does present a challenge, but it is one that can and should be overcome, particularly considering the benefits. For example, employers might not be sure how frequently they should order MVRs. Remember that MVRs represent a snapshot in time of a person’s driving history; they provide only the data available at the time the report was ordered. That’s why employers should check employees’ MVRs periodically.
Once-a-year screening might not be sufficient. For example, if an employee had driving violations on the annual MVR that put the employee in the category of “borderline,” waiting a full year to check again means the employer would not know in that year-long period if the employee had more violations or changes in license status. Ordering MVRs more frequently can help companies better determine when to remove someone from driving responsibilities.
Some states offer driver monitoring services that can tell employers monthly — or even weekly — if their drivers have new violations or changes in license status. A major Florida entertainment company uses a driver monitoring service to track their drivers continually. The company’s management receives monthly e-mails to let it know when any employee drivers have new activity on their MVRs. If there is activity, the service automatically generates the MVR and displays it online. The program also allows the company to revise its driver monitoring list to keep employee information current.
Of course, employers using MVRs must be mindful of the statutes and regulations that govern their use: the Fair Credit Reporting Act (FCRA), the Driver’s Privacy Protection Act (DPPA), and state statutes and regulations. The FCRA outlines the obligations of users of consumer reports such as MVRs. For example, employers are required to obtain written consent from prospective or current employees before ordering their MVRs.
Apart from privacy protections, interpreting MVR information can be difficult. Companies may struggle to develop guidelines for using the information. The decision to prohibit an employee from driving based at least partly on an MVR may depend on the business’s risk tolerance and preferences. Decision making could also be affected by outside sources, such as a company’s insurance provider, who can provide guidelines based on underwriting principles. Larger companies may have their own employment policies on driver risk factors and behavior.
It’s important for companies to maintain consistency and fairness when evaluating MVR information. Reviewing MVRs can be complicated and time-consuming because the information varies from jurisdiction to jurisdiction with thousands of violations recorded across state lines. Making sound decisions based on the information contained in MVRs can require extensive experience and research, especially when dealing with a multistate fleet.
Many companies choose to use tools to help them evaluate MVR data, such as services that provide standard violation codes. Using such a standardization tool helps to categorize and/or compare violations across jurisdictions and allows employers to review violations by applying a consistent standard.
Another tool that works in conjunction with standard violation codes is custom point assignment — or scoring. Here’s how it works: numeric values can be assigned to each driving violation. The points appear next to each violation on the MVR, and a point total is also listed. The points allow each driver to be scored based on acceptability guidelines and provide a convenient way to evaluate driving eligibility. For companies with large fleets, scores can be especially helpful as a snapshot of their drivers’ histories. After viewing the drivers’ scores, employers can review the full MVRs in detail before coming to a decision.
Federal and state statutes and regulations provide rules for employers who may decide to prohibit employees from driving, an act which is termed an “adverse action” under the FCRA. If a company decides to take an adverse action, such as not hiring someone or terminating an employee with an unfavorable driving history, there are steps to ensure compliance with federal regulations. For example, if use of an MVR results in such an action, the FCRA requires that the employer provide the person who did not get the job or was terminated with “A Summary of Your Rights under the Fair Credit Reporting Act.” To comply with the various rules, employers should review the FCRA and complementary state laws. In some instances, the MVR provider might be able to provide guidance.
The ongoing work of monitoring and assessing MVR activity can pose workflow challenges. Particularly now, many companies cannot afford to train staff members to be MVR experts, and this situation becomes even more complicated when staff is in different locations. However, technology can help address the problem.
Secure web-based solutions can deliver the right amount of information when and where the company needs it. As an example, a major pizza franchise company uses this type of service successfully in its operations. The company wants its stores to receive only the MVR custom point scores to determine driver eligibility. However, it also wants full MVRs, including violations, to be available at the home office. The stores enter data to receive the limited MVR for each driver, and the full MVR is sent automatically to the franchise office. Field personnel receive the “decision” reports, while the home office reviews the full MVR. The stores and home office can then discuss questionable drivers.
The bottom line is that a company should take every possible step to ensure it has safe and qualified drivers. Monitoring MVRs regularly can reduce the chance of an accident and enhance a company’s risk management profile. Employers that routinely screen candidates’ and current employees’ driving records are also proving their due diligence — which can be an important mitigating factor if litigation involving drivers occurs. Since many businesses rely on their commercial insurance provider for guidance on a risk management program, they can partner with their insurance professional to agree on guidelines and procedures. Along with its many other benefits, a thorough screening policy can help reduce liability and achieve lower insurance premiums.
Sean Quillivan is general manager of ISO’s iiX unit. iiX (www.iix.com) is a leading provider of risk assessment information to the insurance and employment markets.