August 11, 2015

There are three questions an employer should consider when formulating  background check procedures to ensure hiring and screening practices are appropriately tailored, based on sound reasoning, and able to survive claims of discrimination from the EEOC, individual litigants and potential class action claims.

They are as follows:

• Is all available information equally relevant in assessing a particular candidate?
• Do you have a reason to order background checks that is appropriate in light of new regulatory challenges?
• Are you making appropriately tailored assessments of unsuitability based on the background information received?

Once an employer knows the answer to these three questions, it is better equipped to make the best decisions for its business

What information is relevant for a particular candidate?

The scope of a background screen can be as narrow as reviewing driving history or as broad as reviewing all information contained in any public and educational record. In deciding what to check, it is important to remember the EEOC’s announced suspicions about over-emphasizing the value of criminal history information during hiring as well as consider any other information your company
may be using that regulators consider to be discriminatory and only marginally relevant to a particular hiring decision.

For each job description, employers should craft a memo that describes the relevance of, and need for, background information as being job-related to a particular job description. As an employer makes an assessment of positions for which screening should be pursued, they should consider whether or not the particular position being filled is one where: (1) the nature of duties; (2) the environment where the work is performed; or (3) the exposure to certain types of customers or clients, makes it important to know and be able to evaluate a
candidate’s criminal history or current financial position as part of the suitabilit assessment. One way to do this is to identify crimes, re-offense rates, or credit data that demonstrate a concern related to the above, and look to (and keep records of) outside research to see if your assessment can be confirmed. Remember, it is inconsistency in the selection of what type of background check each applicant gets that can often get employers sued for discrimination. Establishing a policy and  procedure to make sure each applicant for a job description gets the same background check and having a defensible job-related justification for the relevancy and need for the information for each job position is critical to defending against future discrimination claims. This should be the employer’s practice regardless of the type of background information the employer opts to use.

Types of Background Checks: Criminal History

Even where an employer complies with state law on criminal background checks, it still needs a comprehensive, consistent set of procedures regarding the use of criminal history to avoid claims of discrimination. The key to avoiding such claims is to (1) identify the kind of criminal background information (including how many years back) the company will look, and (2) ensure that the same level of
background check is done for every applicant for that position.

Types of Background Checks: Credit History

As with criminal background checks, concerns about the need for credit checks during the hiring process have also been raised by the EEOC in relation to the relevance of credit history information and its potential to inject an element of  discrimination into the process. While the EEOC has yet to publish comprehensive guidance on the use of credit checks, it has cautioned that an inquiry into an applicant’s credit tends to more adversely impact minorities and women.

Thankfully, the EEOC does recognize that credit history is properly considered where such information is essential to the particular job in question. For example, certain positions at financial institutions or positions that provide access to financial assets or confidential information are jobs for which a credit check may be supported by business necessity. But, the EEOC sets the bar high for employers who
wish to consider credit history during the hiring process. If an employer decides to begin or continue using credit history information during hiring, it should adhere to the following recommendations:

1. Be consistent by setting up the specific kind of financialbackground check that will be used on a job-description-by-jobdescription
basis, and ensure that the background check is consistently used for each applicant for the position;

2. Create memos for each job description that identify the kind of  background check used and the why the company needs a
particular kind of credit;

3. Offer applicants the chance to explain the negative information, consider granting waivers based on the information provided; and

4. Add language to the company’s Fair Credit Reporting Act notice that informs applicants that they should contact the company if circumstances exist that may explain any negative information contained in the credit report. These steps will reduce the risk of a challenge and go a long way to ensure that an employer uses credit history information only where necessary.

Types of Background Checks: Arrest History
Both state and federal regulators have warned employers to either ignore this information altogether or to use it merely as a basis to ask an applicant for more detail about the events surrounding the arrest, because the fact that an arrest occurred is not necessarily evidence of criminal conduct. Employers should carefully consider the value of arrest records as part of the hiring assessment and weigh the use of such information against the risk of misuse of this information. Generally, it is recommended to avoid a background check of this type.