EEOC continues focus on background checks with new guidance

This article is written by Katie Loehrke, human resources subject matter expert and editor with J. J. Keller & Associates, Inc., a nationally recognized compliance resource firm. She is the editor of J. J. Keller’s Employment Law Today and SUPER adVISOR newsletters. For more information, visit www.jjkeller.com/hr and www.prospera.com.

The Equal Employment Opportunity Commission (EEOC) has made background checks a hot topic as of late, and from the looks of things, the Commission’s focus in this area isn’t letting up.

In April 2012, the EEOC released guidance reinforcing the EEOC’s position that the use of arrest and conviction records to make employment decisions can violate Title VII of the Civil Rights Act. With that guidance, the Commission reminded employers that applicants’ conviction records should only be considered if they are job related and consistent with business necessity.

In 2013, the EEOC announced that one of its top priorities was to eliminate barriers to hiring. To enable that, it would actively review employers’ hiring policies to make sure they did not have an adverse impact on protected groups.

This year, the agency continued that focus by issuing a robust guidance document outlining what employers should be thinking about before, during, and after a background check. Since the EEOC published this guidance with the help of the Federal Trade Commission (FTC), implications under the Fair Credit Reporting Act (FCRA) are also addressed.

The document again reinforces the importance of making sure factors that might have a disparate impact are only considered when they are job related and consistent with business necessity. The other salient points of this guidance for employers are summarized as follows:

  • Employers must treat everyone equally. The decision on whether or not to conduct a background check should not be based on an individual’s race, national origin, color, sex, religion, disability, genetic information, or age. Likewise, once a background check is conducted, the same standards should be applied to everyone. For example, if a certain criminal record doesn’t disqualify an applicant of one ethnicity, the employer shouldn’t disqualify applicants of other ethnicities, either.
  • When obtaining background information from a background checking company, the employer should: Give the subject of the background check written notice (not as part of the employment application) that it might use the information to decide about his or her employment; and get the individual’s written permission to do the background check. If the authorization is meant to allow for background checks on the individual in the future, it should specify this.
  • Before taking adverse employment action based on background information obtained from a background-checking company, the employer must provide the applicant or employee with: A notice that includes a copy of the consumer report used to make the decision; and a copy of the form “A Summary of Your Rights Under the Fair Credit Reporting Act.”
  • After taking adverse employment action based on background information obtained from a background checking company, the employer should inform the applicant or employee that he or she was rejected because of that information, and provide the applicant or employee with information about the background checking company, including its name, address, and phone number. The applicant should also be informed that the background checking company didn’t make the employment decision and that the applicant or employee may dispute the accuracy or completeness of the report.
  • Employers must keep background check information for one year after the records were made or after personnel action was taken, whichever comes later. This requirement is extended to two years for educational institutions, state and local governments, and federal contractors with at least 150 employees and contracts of $150,000 or more). FCRA requires that all background reports (and information gathered from them) be disposed of securely. This can include burning, pulverizing, or shredding paper documents, and disposing of electronic information so that it can’t be read or reconstructed.

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