Employment Background Checks: What You Need to Know (and Do)

Be Careful With Background Checks (Sands Anderson PC)

As employment lawyer Annemarie Cleary notes in the above video update, running certain background checks on job applicants can leave employers open to charges of discriminatory hiring practices.

From labor & employment lawyers on JD Supra, here are five recommendations for using criminal and credit background checks without exposing your company to unnecessary liability:

1.Obtain appropriate disclosures from candidates before you run a check…

“The [Fair Credit Reporting Act] provides for a specific disclosure process when any background check is used in the employment process… Despite that clear language, many employers provide disclosures along with other information, such as waivers. That practice exposes those employers to significant liability.” (The Domino’s Effect: How Following the Letter of the FCRA Could Save your Business from a Litigation Chain Reaction by Kilpatrick Townsend & Stockton LLP)

2.Don’t adopt blanket policies rejecting candidates with criminal convictions…

“The concern is that the use of criminal background checks could have a disproportionate impact on minorities and contribute to discrimination. Any employer’s blanket prohibition against hiring someone with a criminal conviction will bring extra scrutiny. Instead, employers should evaluate prospective employees on a case by case basis, weighing the nature and gravity of the criminal offense and the amount of time since the conviction against the job’s specific duties and responsibilities.” (Background Checks – Minefield For The Unwary by Sands Anderson PC)

3.Checking a candidate’s credit history may be illegal…

“In addition to criminal history, background checks that include a credit history review have also been deemed discriminatory – blacks, Hispanics and recent immigrants have, on average, lower credit scores than white, according to a Federal Reserve report. In part for that reason, many states prohibit employers from checking the financial and credit history of most potential hires. Credit checks when hiring a bank’s chief financial officer are likely OK, but not when hiring a teller.” (Pepsi Fined $3.13 Million for Criminal Background Checks by Lawyers.com)

4.Using mobile applications? The rules still apply…

“If you use a mobile application to conduct background checks on your current or potential employees, be aware that such a search will almost certainly be covered by the FCRA. Accordingly, you must receive proper authorization from employees or applicants when background checks are performed, and you must comply with the various other requirements of the FCRA.” (FTC Warns That Background Searches via Mobile App May Violate the Fair Credit Reporting Act by Epstein Becker & Green, P.C.)

5.The bottom line: the EEOC is aggressively seeking out discriminatory practices and policies…

“The EEOC has recently shown renewed interest in background-check policies… This is all part of the EEOC’s E-RACE (Eradicating Racism and Colorism from Employment) Initiative, a program dedicated to strengthening the ‘EEOC’s efforts to ensure workplaces are free of race and color discrimination.’ One of the EEOC’s specific goals for the E-RACE initiative is to develop strategies for addressing ‘21st Century manifestations of discrimination,’ which the EEOC identifies as including arrest and conviction records, as well as other pre-employment hiring practices.” (Can You Refuse To Hire A Felon? by Fisher & Phillips LLP)


Related Commentary:

Employee Expectations and Business Risks in Social Media (Armstrong Teasdale LLP)

Legislative and other Developments Affecting California Employers in 2012 (Greenberg Glusker Fields Claman & Machtinger LLP)

2012 Labor and Employment Horizon (K&L Gates LLP)

Background Checks: There’s An App For That (Fisher & Phillips LLP)

• Employment Background Checks: 5 Things You Can and Cannot Do

• Employment Background Checks: Legal Considerations

• Doc of the Day: When Are Background Checks Discriminatory?

• Employment Background Checks: Two HR Law Updates


Find additional Labor & Employment Law updates on JD Supra»