An Update on Background Checks
Background checks are routinely used to help companies in their hiring decisions. Staffing companies, recruiters, and placement companies are especially likely to use checks before recommending candidates. A comprehensive background check can include credit history reports, drug testing, driving record, and criminal history reports. However, the general concept of checking into a person’s personal history as part of a routine hiring process has come under increased scrutiny with governments now legislating when checks may be run and how they may be used.
Federal regulations have long prohibited the use of background check or making an employment decision based on an applicant’s race, national origin, color, sex, religion, disability, or age. For example, if HR is only looking at the credit history of individuals of certain races, then your hiring process may be considered to be discriminatory.
The Fair Credit Reporting Act (FCRA) requires an employer to provide every applicant with written notice of the background check and to get permission in writing before running the background check. Then, if the company takes an adverse action (i.e. not hiring an applicant) based on that background information, they must notify the applicant that the decision was based on the background check and provide a copy of the report used.
State and Local Regulations: New Laws
Many states and local municipalities have passed employee protections known as “Ban-the-Box” laws and regulations. These restrictions prohibit employers from asking job applicants certain questions related to criminal history or convictions. The practice has become widespread with more and more cities joining the trend. In the state of New York, it is generally illegal to discriminate against an applicant who has been convicted of one or more crimes. In California, employers cannot obtain criminal history information until after a conditional job offer has been made.
There is also a movement across the country towards limiting the use of an applicant’s credit history information in making hiring decisions. The city of New York prohibits an employer from making inquiry into an applicant’s credit history unless certain exceptions apply. In California, using credit history reports is restricted to certain professions.
As a way to promote gender pay equality, jurisdictions around the country have enacted regulations on an employer’s ability to ask about an applicant’s previous salary. For example, the states of California and New York both prohibit inquiring about a potential employee’s previous salary. Also, New York requires employers to provide applicants with a salary range if asked.
Genetic history testing has become more accurate and widespread in the past few years. As a result, states are passing laws protecting genetic history information from being used in making employment decisions. Illinois has passed a law that prevents an employer from discriminating against applicants who refuse to provide genetic history information.
A very recent trend is to regulate employer’s screening of an applicant’s or employee’s online activity. Vermont is leading in regulating a prospective employer’s use of social media in making hiring decisions. Employers in Vermont may neither ask an applicant or employee to provide information about their social media accounts nor direct an employee to take any actions regarding their personal social media accounts.
As more information on individuals becomes readily available, federal and state governments are recognizing the need to limit the use of that information especially with respect to employment. Companies and their HR Departments need to stay abreast of changes as these laws evolve and are instituted. For a full survey of current regulations, check out the resources available at the Society for Human Resource Management at https://www.shrm.org.
Business Insights is hosted by the Law Firm of KPPB LAW (www.kppblaw.com).
Sonjui L. Kumar is a founding partner of KPPB LAW, practicing in the area of corporate law and governance.
Disclaimer: This article is for general information purposes only, and does not constitute legal, tax, or other professional advice.
Enjoyed reading Khabar magazine? Subscribe to Khabar and get a full digital copy of this Indian-American community magazine.
blog comments powered by Disqus