July 26, 2017
Jessica Hofrichter is Senior Compliance Counsel at Ceridian.
Hiring is one of the most important things that HR Professionals do, and hiring mistakes can jeopardize company culture and even create liability. It’s no wonder that employers turn to background screening to find the right candidates and manage risk. At the same time, an increasing number U.S. applicants find themselves in the tough position of looking for a job with a criminal record.
Legislators, courts and activist groups are trying to find a balance in the tension between the employer’s need to screen applicants and making sure applicants get a fair shake in the hiring process. There has been an uptick in litigation against employers for violations of background check laws in recent years; and at the same time a movement by activists and state legislators to introduce bills that limit how, when, and for what reason employers can screen applicants.
While employers screen applicants for many different types of information, the most common types of information screened are criminal background and credit history. Restrictions on the collection of criminal and credit information exist at the federal, state and local level.
There are three main categories of restrictions employers should consider when screening criminal and credit history:
All of these laws work together to form a patchwork of statutes, ordinances, and guidance that can be a challenge to navigate.
A number of discrimination laws administered by the U.S. Equal Employment Opportunity Commission (EEOC) restrict employers from putting screening processes in place during the hiring process that have a discriminatory impact on protected groups. In 2012, the EEOC issued guidance that explains how employers can defend against claims of discrimination by showing that the screening policy is job related and is consistent with business needs:
States also have similar discrimination laws. In many cases, the state law requirements mirror the federal requirements.
If part of your screening process includes obtaining a consumer or investigative report on an applicant, the federal FCRA and state law equivalents will likely apply. Most background checks acquired from a third-party vendor to screen applicants during the hiring process will be consumer reports under the FCRA. Investigative reports involve a report based on personal interviews about the employee.
The FCRA lays out steps employers must take before obtaining a background check on applicants and employees:
States also have laws that provide for specific notice, consent and disclosure requirements like the FCRA. Some states, such as Illinois, Maryland, Nevada, and Oregon severely limit using credit history in the hiring process, unless an exception applies. In other states, such as California, Minnesota and Oklahoma, employers are required to provide an authorization form that contains a box the applicant can check to request a copy of the consumer report, and if checked, the applicant must receive a copy of the consumer report.
Ban-the-box legislation has been a trend for the past five years or so, and the movement came out of a campaign to provide workers with criminal histories access to jobs by removing conviction history questions on the job application. Several states, such as Connecticut, Hawaii, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island and Vermont have adopted some form of ban-the-box requirements. Several large cities, such as New York City, Philadelphia, San Francisco, and Seattle have followed suit. While the requirements across these jurisdictions are different, there are some common themes (even though not all of these themes typically appear in the same laws):
There are numbers of best practices that employers can use to help get organized when it comes to background screening:
Disclaimer: The information provided in this post is provided for informational purposes only and should not be relied upon or construed as legal advice and does not create an attorney-client relationship. You should review with your legal advisors how the laws identified in this post may apply to your specific situation.