Background-Screening Rules Keep Employers on Their Toes

Allen Smith, J.D. By Allen Smith, J.D. September 11, 2021
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Background-Screening Rules Keep Employers on Their Toes

​LAS VEGAS — Background screening is more challenging than ever for employers. Consider just the following: the risk of negligent hiring, inadequate practices by background-screening firms, application authorization forms, the Equal Employment Opportunity Commission's (EEOC's) guidance on hiring individuals with criminal backgrounds, "ban-the-box" laws, and adverse action letters.

The EEOC guidance is now being enforced in earnest, said Debra Keller, president and chief compliance officer with Total Insight Screening in Evansville, Ind., who spoke Sept. 11 at the SHRM Annual Conference & Expo 2021. She analyzed these compliance and background-screening challenges in a concurrent session, "Background Screening and Why You're at Risk: More Challenges with 'Ban the Box' and FCRA [Fair Credit Reporting Act] Violations."

Negligent Hiring

Negligent hiring claims remain a liability risk for employers. These claims basically mean an employer is responsible to exercise due diligence that someone they hired doesn't pose a risk to team members or the public, Keller said. The standard is what the employer should have known, not what the employer knew, about the person hired, she cautioned.

Keller said that in one recent case, a young man was shot in the back by a co-worker after a dispute about who could use a forklift onsite. The victim died. The court found the man who shot him was on bail when hired, had pulled a gun on someone at a store and pulled a weapon while in his prior job.

The court concluded that the employer hadn't conducted an adequate background check and awarded $1.2 million to the victim's wife. Someone's life could have been saved if there had been a thorough background check, Keller said.

She said a comprehensive background check will include:

  • A national criminal background check.
  • A Social Security trace.
  • A background check of counties where the individual has lived for the last seven years.

"That's your base line," she said. "It could vary by state."

Inadequate Practices by Background-Screening Firm

Quality assurance is a problem in the background-screening industry, Keller noted.

One screening firm decided it would protect itself from liability by looking only for criminal records with exact full dates of birth. This meant many records were overlooked, she said.

She pointed out additional background-screening firm red flags, including:

  • Claims that sex offender searches are run separately. These are included in national criminal background checks.
  • Claims that 90 percent of background screens are done in an hour. "What are they doing? Yelling out the window?" Keller asked, saying it is impossible to do background screening so quickly. Two to four days is a reasonable amount of time, but it can take longer, she said.
  • If the firm offers a pass/fail system. Get "must pass background check" out of policies and advertisements, Keller said, noting that the EEOC views this language critically.

Applicant Authorization Forms

Applicant authorization forms have completely changed recently, Keller said. Many people mistakenly think disclosure and consent forms are the same, she cautioned.

A slew of forms are needed now, including:

  • A disclosure to run the background check form.
  • A form noting that a background-screening firm will be used, if that's the case.
  • Applicant authorization and acknowledgment, which grants the employer permission to run the background check.
  • Other state and local law notices.

Make sure the forms are separate and not in the job application, she said. If completed online, the forms should open in separate windows, not one long scroll, she cautioned.

EEOC Guidance

The EEOC's 2012 guidance on criminal background checks discourages blanket exclusions of individuals convicted of criminal offenses.

Evaluate so-called green factors to determine whether someone is a viable candidate. These factors include:

  • The nature and gravity of the offense.
  • The time passed since the offense.
  • The nature of the job sought.

Ban-the-Box Laws

Ban-the-box laws are an effort to stop the cycle of poverty to prison and vice versa.

The old practice of job applications having a check box for someone to indicate if they were convicted of a crime or a felony isn't permissible where these laws are in place. Instead, employers in these jurisdictions must look at each candidates as an individual and determine if the person might be a good fit.

Approximately 35 states have ban-the-box laws that apply to public employers, while 13 states have ban-the-box laws applying to private employers. Cities often have ban-the-box ordinances as well.

"Don't run a background check until you've made a conditional offer," Keller said.

Adverse Action Letters Changed

Finally, Keller cautioned that so-called adverse action letters have changed within the last year. In some jurisdictions, employers must list the convictions that affected their decision in turning down a candidate after a background check, she said.

"Law firms are out to find your disgruntled applicants," Keller noted, saying that violations are "easy money" for them. Even if nothing was done wrong, employers can wind up paying thousands to settle, she said.

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