The Growth in Compliance Concerns

By Michael Klazema on 5/28/2019
The world of background checks compliance is always changing. On the one hand, most employers feel obligated to vet their new hires to avoid negligent hiring lawsuits and similar concerns. On the other hand, the number of laws and local ordinances that regulate, stipulate, or limit the use of background checks is growing, giving employers new challenges as they form background check policies that are both compliant and comprehensive.

Employers need to tread carefully to make sure that they are not overstepping any of the boundaries of background checks compliance. Here are several of the regulatory concerns that currently affect employer background checks.

Ban the Box

Perhaps the biggest regulatory trend in background checks is the rise of ban the box legislation. The ban the box movement is pushing for questions about criminal history to be removed from job applications. The idea is that someone with a criminal record should have the chance to prove his or her fitness for a job without criminal history being a factor. Employers still have a right to conduct background checks, but many ban the box laws delay those checks until after the first interview—or even after the employer makes a job offer.

Currently, 35 states and more than 150 cities and counties have passed ban the box laws. All these laws are slightly different, with some applying only to public employers (government departments or offices) and others applying to private companies as well. Elected officials are constantly introducing ban the box legislation, which means that your area could have a ban the box law in place by next year even if it doesn’t right now.

Consult the National Employment Law Project to determine if ban the box compliance is required in your state, county, or city.

The Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) dictates how employers must go about using background checks for employment decisions. You must notify a candidate (and get his or her written consent) if you plan to vet that person with a background check.

If the findings of a background check lead you to disqualify someone from job consideration, the FCRA lays down the steps that you must follow next. Click here to learn more about FCRA compliance.

The Equal Employment Opportunity Commission

The Equal Employment Opportunity Commission (EEOC) regularly issues guidance for how employers can use background checks in a job setting without inadvertently discriminating against minority groups. Specifically, the EEOC holds that a company’s hiring policies should not have a “disparate impact” on minorities.

One commonly-cited piece of EEOC guidance is that employers should consider every criminal record on a case-by-case basis, judging a candidate not just in light of his or her criminal history but on the crime, the relevance of that conviction to the job at hand, the amount of time that has elapsed since the conviction, and similar considerations.

Other Regulations

There are other factors regarding background checks compliance that employers must consider. For instance, specific industries often have their own requirements for background checks or hiring standards. The Federal Motor Carrier Safety Administration, for example, requires trucking companies and other companies that employ commercial drivers to conduct thorough pre-employment drug tests. Being familiar with the compliance factors in your industry is a must.

Other regulations are driven by geography. There are laws in different parts of the country regarding how arrest records can be used in hiring decisions. Read our white paper about background checks and arrest records to learn more. Some states—such as California, Illinois, and Washington—have banned the use of credit history checks for employment situations.

It can be challenging to balance due diligence with background checks compliance. Researching the background check laws in your city or state will help you get there.

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