Know Before You Hire: Employment-Screening Trends in 2022

Roy Maurer By Roy Maurer February 23, 2022
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​The COVID-19 pandemic and the roiling labor market resulting from it are still putting pressure on employment screening, even in the third year of the health crisis. More job hoppers and a hypercompetitive talent market are pushing for pre-employment background checks to be done faster—or delayed and even dropped from the hiring process altogether. Meanwhile, bottlenecks in the operational aspects of screening and drug testing—court access, collection site availability and staffing shortages—are still being felt, albeit sporadically.  

Another trend employers will see this year is the choice to eliminate marijuana from pre-employment screening, due to expanding marijuana legalization and enduring labor shortages. But the year's biggest challenge to the background-check process could be the redaction of identifying information provided by courts in two states—and the possibility of more jurisdictions doing the same.

[SHRM resource hub page: Background Checks]

Background Screening Strains Under Pandemic Pressure

As millions of workers have quit their jobs during the Great Resignation and employers compete to fill open positions, the subsequent surge in hiring has led to a boom in employment background checks.

"The end of 2021 and the beginning of 2022 have been strong for demand," said Tim Dowd, CEO of Accurate Background, a screening firm in Irvine, Calif. "There's usually a slowdown in hiring around the holidays, but because there has been an ongoing struggle to fill positions, companies have kept their foot on the gas."

"We are definitely busy," said Christine Cunneen, CEO of Providence, R.I.-based background-check company Hire Image. "And with such a competitive hiring market, we know that employers want their results faster."

Les Rosen, an attorney in the San Francisco area and founder of Employment Screening Resources, a background-screening firm recently acquired by ClearStar, said employers need to re-examine their hiring processes to make sure that the best talent is hired as quickly and easily as possible. "That means an increased focus on the applicant experience, including screening, to make sure that the process is friendly, intuitive and easy," he noted.

Many employers in 2021 told SHRM Online that because of the competition for talent, they would scale back and even forgo some aspects of their hiring process, including background checks. Some companies said they would eliminate them altogether, while others said they would delay them until after the new hire had begun working.

"Some employers may lessen the criteria they use in order to get reports back quicker," Cunneen said. "They may want to reconsider searching for high school transcripts for front-line workers, for example, or how far back they go in employment history. But I would recommend against reducing criminal searches."

Rosen said some employers are practicing "instant hiring," where front-line workers are essentially hired on the spot at recruitment fairs. "This practice may continue in a tight labor market before it normalizes," he said. "But I don't see this as a long-term practice. I don't think employers see it as ideal. These are jobs where employers are not investing a lot of time in training. And for positions with more responsibility, or more potential of risk or harm to the company, it's a different story."

Dowd said he has not seen employers dropping screening requirements. But there have been some lingering restrictions and staffing issues due to the pandemic. "Where there is still manual data collection at some of the courts, you do run into issues that affect availability or access to records," he said. "We're also seeing it at the clinic level in reference to drug testing."

Melissa Sorenson, executive director of the Professional Background Screening Association, said the background-screening industry continues to see occasional setbacks due to periodic local COVID-19 outbreaks that may temporarily close a court or jurisdiction.

The organization has been working with courts throughout the pandemic to identify ways to maintain access, and some courts have upgraded remote access capabilities to limit delays due to closures, she said.

Staffing shortages among screening firms can also impede hiring. "It's still challenging when people call in sick, but the situation is resolving," Rosen said. "One fundamental shift among screeners is the widespread acceptance of remote work. Before the pandemic, most screening companies were reluctant to offer remote work because of access to sensitive PII [personal identifiable information] and questions about productivity. That's changed."

Drug-Screening Dilemma

As more states and localities legalize and decriminalize marijuana, employers are faced with the question of whether or not to test for the substance.

"In 2021, we saw Philadelphia join New York City and Nevada with the implementation of a ban on pre-employment testing for marijuana," said Laura Goble, director of compliance at Hire Image. She advised employers to work with their screening providers to remove marijuana from their drug-testing panels in those areas. All three laws do have exemptions for safety-sensitive positions.

"Additionally, while marijuana remains a Schedule I substance under the Controlled Substances Act, making it illegal for any reason under federal law, to date there are nearly 40 states that have legalized marijuana for medical purposes and nearly 20 for recreational purposes," she said. "And of course, each of these laws also have their own nuances."

When it comes to marijuana use and testing, employers are clearly between the proverbial "rock and a hard place," Rosen said. "On one hand, the pendulum has swung rather clearly in the direction of legalization. On the other hand, these laws do not mean a worker has a right to be under the influence in the workplace."

In the wake of these laws, many employers are considering removing marijuana from their pre-employment drug-testing panels.

"With global talent shortages reaching a 15-year high, many employers in the United States and around the world believe that something must change—and for several companies, that means eliminating marijuana drug tests," said Shirley Akrasih, an attorney in the Atlanta office of Troutman Pepper. "Employers are taking a hard look at barriers to the recruitment process, and they are loath to reject an applicant because of a positive marijuana drug test. Naturally, not all employers are willing to make such a change and have valid concerns related to job performance, potential impairment, safety and liability."

Rosen said that ultimately, employers need to rethink blanket testing policies. "If an employer feels marijuana testing is relevant to a particular job, especially if it is a safety-sensitive position, then HR will need to very carefully craft a narrow and specific policy that is both legal in the local jurisdiction and has a clear and demonstrable nexus to the risks involved in a particular job."

Goble said that with an increase in remote workers and the ambiguity surrounding what is legal and where, uncertainty regarding marijuana will continue. "Issues such as accommodating marijuana use, drug-free workplaces and the possibility of being sued for terminating an employee for a drug test that is positive for marijuana will plague employers in 2022," she said.

But not testing for marijuana is opening the organization up to negligent hiring and retention claims if something bad happens related to that decision, said Angela Preston, senior vice president and counsel, corporate ethics and compliance at Sterling, a screening firm based in New York City.

The Patchwork of State and Local Laws Grows

Numerous cities, counties and states continue to pass laws limiting the information that can be obtained by employers during the pre-employment screening process.

"We have seen a variety of fair-chance laws emerge," said Chris Christian, director of compliance at Sterling. Also known as "ban-the-box" laws, these mandates are designed to give people with criminal records a better chance at getting a job.

"State and local jurisdictions are coming up with their own unique requirements, and we also see jurisdictions expanding on existing ban-the-box laws, imposing more stringent requirements," Christian said.

About 37 states and 150 localities have adopted fair-chance and ban-the-box laws. The only federal fair-chance hiring law—which applies to federal workers and contractors—went into effect in January. Over 20 states and multiple localities have passed statutes that prohibit asking applicants about previous salary.

"Multiple jurisdictional employers need to consider whether to have multiple policies or a universal policy based on the most-strict laws," Preston said. "Even if you don't have a physical location in one of these jurisdictions, you still need to consider whether or not the person you're hiring lives in one of these jurisdictions, because often the law applies to the person, who may be working remotely."

While employers have mostly gotten used to ban-the-box restrictions, a new threat to full and accurate employment screens has emerged—the practice of redacting identifying information.

"Limiting access to criminal records, or completely sealing them, is nothing new, and we are expecting it not only to continue in 2022, but to increase," Cunneen said. "But there has been a disturbing new trend limiting access to information typically used in preparing background-check reports. This isn't just about criminal convictions—in some instances, any personal identifying information is removed, making it difficult to determine if the record even belongs to the applicant."

Sorenson explained that in 2021, screening firms lost access to the full date of birth as an identifier in both California and Michigan. "We have employers asking for criminal records searches and if a potential hit is found in one of these states and the courts don't allow access to other identifiers—most importantly date of birth—background screeners are often left in an impossible situation," she said. "It's very hard to know if a record that has the same name as the applicant being screened in fact belongs to the applicant if you don't have any other identifying information to match on."

Cunneen said it is expected that similar laws will be enacted throughout the country in 2022. "And unfortunately, we will also likely continue to see the larger implications of making hiring decisions without having complete information about the individual."

Dowd said the patchwork of laws regulating employment screening makes it challenging for employers to keep up with compliance. "And the data redaction laws, while well-intentioned, create more problems than they solve," he said. "They make it harder to ensure accuracy in the search, add delays to the hiring process and create more disputes in the process."

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