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How to Conduct Compliant Criminal Background Investigations

A man working on a computer in an office.

Recent changes to criminal background check laws at the federal and state level have created compliance challenges for HR professionals, but there are benefits to conducting criminal screens during the hiring process.

"Why do we do background checks?" James Reidy, an attorney with Sheehan Phinney in Manchester, N.H., asked the Society for Human Resource Management Employment Law & Legislative Conference.

Sometimes employers, such as federal or state contractors, are required to conduct criminal screens and sometimes they are required to obtain a security clearance, he said.

The nature of the job—such as child care or health care positions—may call for background screening, and employers may also conduct screenings to avoid negligent hiring claims.

What records should employers consider in these screens? Although arrest records can generally be evaluated under federal law, employers should largely focus on convictions, Reidy said. They should also consider any state or local laws that place more restrictions on employers than federal law.

EEOC Guidance

The Equal Employment Opportunity Commission (EEOC) issued guidance in April 2012 that was basically a rehash of guidance that came out in the 1970s, Reidy said. According to the guidance, employers should look at how long ago any criminal incident occurred and how related it is to the job.

The agency discourages employers from considering arrest records, since racial and ethnic minorities are often treated differently at the arrest level.

Furthermore, Reidy said, arrests don't establish that criminal conduct has occurred.

[SHRM members-only toolkit: Conducting Background Investigations and Reference Checks]

Criminal convictions have more due process, but they are not free from bias, he added. Racial or other biases may result in prejudiced witness statements, stereotyped thinking and inconsistencies in the process.

FCRA Rules

The federal Fair Credit Reporting Act (FCRA) regulates employment screening and outlines consent, disclosure and notice requirements for employers that use a third-party credit reporting agency (CRA) to conduct background checks on job applicants and employees.

"If you use a third party to conduct background checks, be very careful because you could be held liable for its mistakes," Reidy said.

He suggested that employers look at the CRA's rating with customers and the Better Business Bureau. You want to make sure you are dealing with a reputable company, he said.

Although the FCRA likely doesn't apply to employers who conduct the investigation on their own, the safest practice is to follow FCRA guidance anyway, Reidy added.

"If an employer uses Google to conduct a background search, does that make Google a third-party CRA?" he asked. The answer isn't clear.

Social Media

Employers may use Facebook and other social media to screen candidates, but they shouldn't be using this as the basis for a criminal background check, Reidy said.

There are a number of reasons employers shouldn't look at applicants' and employees' social media at all. Employers could uncover protected information about a potential hire's age, disability or other protected status.

"For younger people, the things they did in college may show up later," he added.

Reidy noted that some states have laws that prohibit employers from requesting applicants' and employees' social media usernames and passwords and from asking them to lower privacy settings or to "like" the company's page.

Ban the Box

A number of states, counties and municipalities also have some form of ban-the-box law that prohibits employers from asking about criminal history on the job application. Employers in these jurisdictions must wait until a later point in the hiring process to ask.

Many of those laws apply only to public employers, but more states and cities are passing laws that apply to private employers, too.

These laws may say that employers have to wait until after the initial interview to ask about criminal history or after a conditional offer of employment is made.

Many states are also considering limiting the use of juvenile records, certain misdemeanor offenses and other information in hiring decisions.

Reidy noted that expunged records generally don't have to be disclosed to employers (although there are some exceptions). "If the court system has said 'we no longer think this is an issue that still needs to be on the record,' generally you shouldn't consider that information."

Tips for Employers

Why would employers want to give a second chance to a worker with a criminal history? Reidy mentioned the following reasons:

  • Because 65 million working-age Americans have some kind of criminal record.
  • To address labor shortages due to an aging population and unavailability of skilled workers.
  • To avoid discrimination claims.
  • To reinforce fairness in culture.
  • To reduce the social costs of recidivism.

He said employers should consider taking the following steps:

  • Ensure your search process is fair and proper.
  • Be aware of and comply with applicable federal and state laws.
  • Know your company's policies.
  • Train interviewers on what not to ask or say.
  • Make common sense hiring decisions.


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