HR Management & Compliance

Legal Restrictions on Employee Background Checks

Employee background checks are used by an estimated 92 percent of organizations in one form or another before hiring someone. They can be quite useful, but employers should be careful because the EEOC has been cracking down on illegal use of background information. Are you aware of what you should and shouldn’t be doing with employee background checks?

Background checks that single out criminal convictions can be problematic if used wrong. This is because, statistically, there are more minorities who have been convicted of criminal offenses than non-minorities. As such, this can lead to discrimination against minority groups when employers have blanket policies that don’t allow the hire of those with prior criminal convictions without exception.

There are two types of Title VII claims that the criminal conviction issue touches upon for minorities: disparate treatment and disparate impact.

  • Disparate treatment is when the employer treats having a criminal history differently for different applicants or employees based on their race or national origin.
  • Disparate impact is when the employer’s neutral background check policy disproportionately impacts protected individuals.

The second of these is seen often and is a problem with blanket policies that wipe out an entire class of employees. There can also be a problem if you’re asking everyone whether they’ve had a felony conviction without a caveat that says it won’t automatically cause an exclusion.

“Under Title VII, the key there is that an employer can’t have these background policies unless the policy is job-related and consistent with business necessity – that’s the Title VII standard.” Sara Hutchins Jodka explained in a recent BLR webinar.

How Can An Employer Defend Against Disparate Impact or Discrimination Claims?

How can an employer still perform background checks without fearing a claim of disparate impact? The first thing the employer needs to confirm is whether or not disparate impact exists.

“An employer can present local or regional data as well as its own applicant data to demonstrate that its policy or practice did not cause a disparate impact.” Jodka told us. However, “just saying that your statistics are good . . . is not going to be enough to say your policy is not, in application, creating a disparate impact.”

On the other hand, if the issue in question is an exclusion of an applicant with a criminal conviction, there are two defenses:

  • An employer can defend criminal record exclusion by demonstrating that it is job-related to the position and consistent with business necessity. (These are the Title VII required factors.) The best way to prove this is to look at the EEOC guidance: “Uniform Guidelines on Employee Selection Guidelines” and see if your screening policy can be validated as compliant under this document.
  • Another option is to prove that you utilize a targeted screening process.

A targeted screening process takes into account following factors:

  • The nature and gravity of the offense or conduct.
  • The amount of time that has passed.
  • The nature of job sought or held.
  • An individualized assessment. An individualized assessment is for individuals “screened out” by this targeting screening process; the employer’s policy should then provide “an opportunity for an individualized assessment” so that their specific circumstances can be reviewed.

EEOC Guidance repeatedly stresses that an employee background check process that does not include individualized assessments is more likely to violate Title VII. To conduct an individualized assessment, first give notice to the individual that he/she has been screened out because of a criminal conviction. Give them the opportunity to demonstrate that the exclusion should not be applied. Then take the information they provide into consideration. This consideration by the employer as to whether additional information provided warrants an exception to exclusion will constitute an individualized assessment.

For more information on legally conducting employee background checks, order the webinar recording of “Conducting Legally Sound Background Checks: New FCRA Requirements and EEOC Guidance Explained.” To register for a future webinar, visit http://store.blr.com/events/webinars.

Attorney Sara Hutchins Jodka of Porter Wright has significant experience representing employers in all facets of employment-related litigation. Ms. Jodka has drafted company handbooks, workplace policies, and more.

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