Background checks are a valuable tool for businesses, but it’s important to understand the difference between what a background check provider can report and what an employer can legally use when making employment decisions.
What background check service providers can report
Background check providers can report most types of adverse information, including arrest records, dating back seven years under the Fair Credit Reporting Act (FCRA). However, there are no time restrictions under the FCRA for background check providers to report convictions.
Some states limit what information background check providers can report. For example, in California, background check providers cannot report crimes committed more than seven years unless there are certain exceptions.
What information employers can use
Employers are subject to a variety of state and local laws that prohibit using criminal history information in employment decisions. For example, many states prohibit employers from using an applicant’s arrest record in making an employment decision.
Some states also restrict the use of conviction records, such as felonies older than seven years and misdemeanors older than five years. Additionally, most states restrict an employer’s use of sealed, annulled, expunged, and/or pardoned criminal records, as well as juvenile records.
Many states, counties, and cities also have laws that regulate when an employer can inquire about an applicant’s criminal history or order a criminal history background check. This is known as “Ban the Box” legislation.
The EEOC’s guidance on the use of arrest and criminal records in the hiring process
The federal Equal Employment Opportunity Commission (EEOC) has also issued guidance on the use of arrest and criminal records in the hiring process. The EEOC’s guidance states that bright-line policies relating to the use of criminal history information are unlawful. Criminal history information should only be used for employment decisions if it is “job-related and consistent with business necessity.”
Both state and local governments also have their own laws concerning “job relatedness” requirements for an employer’s use of criminal history information.
What employers should do
Employers should carefully review all the restrictions on the use of criminal history information before using it in employment decisions. Here are a few tips:
- Check your state and local laws to understand the restrictions on the use of criminal history information.
- Create a criminal history screening policy that follows the law.
- Only use criminal history information for employment decisions if it’s related to the job and necessary for business reasons.
- Be prepared to explain how your criminal history screening policy is related to the job and necessary for business reasons.
Ban the Box
Ban the Box is a movement to prohibit employers from asking about a job applicant’s criminal history on the initial job application. The goal of Ban the Box is to give people with criminal records a fair chance of getting a job.
As of 2023, 37 states and over 200 cities have enacted Ban the Box laws. Under these laws, employers cannot ask about an applicant’s criminal history on the initial job application. Employers can only ask about an applicant’s criminal history after they have made a conditional offer of employment.
Ban the Box laws have been shown to be effective in increasing employment opportunities for people with criminal records. A study by the National Employment Law Project found that Ban the Box laws increased the employment rate of people with criminal records by 25%.
Employers should carefully consider all the restrictions on the use of criminal history information before using it in employment decisions. Here are a few tips:
- Check your state and local laws to understand the restrictions on the use of criminal history information.
- Create a criminal history screening policy that follows the law.
- Only use criminal history information for employment decisions if it’s related to the job and necessary for business reasons.
- Be prepared to explain how your criminal history screening policy is related to the job and necessary for business reasons.
The EEOC’s Guidance on the Use of Criminal History Information in Employment Decisions (the “Guidance”) provides employers with guidance on how to use criminal history information in employment decisions in a way that complies with Title VII of the Civil Rights Act of 1964.
The Guidance states that employers should only use criminal history information in employment decisions if it is “job-related and consistent with business necessity.” This means that the employer must be able to show that the criminal history information is relevant to the job and that the employer has a legitimate business reason for using it.
The Guidance also states that employers should conduct an individualized assessment of each applicant’s criminal history before making an employment decision. This individualized assessment should consider the following factors:
- The nature and gravity of the offense
- The time that has passed since the conviction
- The nature of the job held or sought
The Guidance makes it clear that employers should not use arrest records in employment decisions. Arrest records are not a reliable indicator of guilt, and their use can have a discriminatory impact on individuals of color.
In addition to the EEOC’s Guidance, many states and localities have their own laws that regulate how employers can use criminal history information in employment decisions. These laws often have additional requirements that employers must follow, such as requirements to conduct individualized assessments and to only use criminal history information that is job-related and consistent with business necessity.
Employers should carefully review the EEOC’s Guidance and the laws in the states and localities where they operate to ensure that they are complying with all applicable requirements when using criminal history information in employment decisions.
Here are some additional tips for employers:
- Be transparent about your criminal history screening policy. Let applicants know what information you will collect and how you will use it.
- Give applicants an opportunity to explain any negative information in their criminal history.
- Consider using a fair chance hiring process, which is a process that focuses on an applicant’s qualifications and potential, rather than their criminal history.
By following these tips, employers can minimize the risks associated with using criminal history information in employment decisions and help to create a more equitable and inclusive workplace.
Beyond Banning the ‘Box’
These laws are designed to give people with criminal records a fair chance of getting a job. They also help to reduce discrimination against people with criminal records.
In addition to banning employers from asking about criminal history on the initial job application, many ban-the-box laws also prohibit employers from ordering a criminal history background check or doing an internet or other public records search for criminal history until a later point in the pre-hire process, such as after an interview or a conditional offer of employment.
Employers should carefully review the ban-the-box laws in the states and localities where they operate to ensure that they are complying with all applicable requirements.
Job Solicitations and Advertisements
Some cities regulate the language that employers can and cannot use in job solicitations and advertisements about their consideration of criminal records or background checks. In both San Francisco and Los Angeles, employers must affirmatively state in solicitations and advertisements that they will consider qualified applicants with criminal histories in a manner consistent with applicable law. Employers in New York City should not make any mention of background checks in any job solicitations and advertisements.
Workplace Postings
Three cities require that employers post a city-provided notice about the ban-the-box law in the workplace. Los Angeles, Philadelphia, and San Francisco have prepared city-specific notices that should be posted at each workplace in the applicable city. In Los Angeles, the employer also must provide a copy of the city notice to any labor organization that represents employees working in that city.
Notice Requirements
The Fair Credit Reporting Act (FCRA) requires employers to follow certain requirements if they intend to take “adverse action” against an applicant based on the contents of a third-party background report (consumer report). This requirement affords the applicant an opportunity to discuss the report with the employer before adverse action is taken. Once the employer decides to take adverse action, the employer must then provide an “adverse action” notice to the applicant.
Several ban-the-box laws go beyond the FCRA’s requirements by mandating:
- A pre-adverse and/or adverse action notice even if the criminal information is not derived from a third-party background report (e.g., through an applicant’s self-disclosure or internet or public court records search).
- Identification of the potentially disqualifying criminal record in the notice.
Some ban-the-box laws also require employers to wait a specific period before taking adverse action against an applicant. For example, in California, the employer must give the applicant at least five business days to consider the information in the report and the letter. If the applicant advises the employer within that five-day period that the information is incorrect and that they are obtaining information to support their claim of inaccuracy, the employer must give the applicant five additional business days (for a total of 10 business days). Many other states/local jurisdictions have additional notices as well (e.g., Philadelphia, NYC).
Individualized Assessment
Employers in Los Angeles and New York City must document their individualized assessment on a specific form before acting against an applicant because of their criminal history. In those cities, the employer must provide the applicant with a copy of the completed individualized assessment and a copy of any other record the employer considered in its assessment.
If a LA employer does a reassessment of the criminal record because of new information provided by the candidate, the employer must include the reassessment in their final adverse action notice. For all California applicants, the employer must advise the applicant in the adverse action notice of their right to file a complaint with the Department of Fair Employment and Housing.
Conclusion
Employers should be well informed about the difference in the information that background screening firms can legally report and the information that the employer can legally use. Fully understanding this, an employer should proceed cautiously in how they use and obtain past criminal records in making employment decisions.
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