Use of available background information in your Club’s hiring and employment decisions is critical to its success. However and very importantly, there is an ever-evolving minefield of legal risk associated with the use of background information when qualifying a candidate. During this hiring season, it is a good time to examine your current processes and be aware of what you can and cannot do with respect to background checks and information.
The practice of securing background reporting information is compliant with the Fair Credit Reporting Act (FCRA) as long as the employer discloses to the applicant, in writing, that the report may be obtained for employment-related purposes. The FCRA requires not only notice to and consent from applicants/employees before doing a background check, but also requires notice to the applicant who is rejected based on the results of such a check, both before and immediately after the rejection decision is made. The employer is required to follow an “adverse action procedure,” which includes sending the candidate a pre-adverse action notice, a copy of the consumer report, a final adverse action notice and a summary of rights under the FCRA.
When do Background Checks Cross the Line?
The EEOC requires that all background checks be “job-related” and “consistent with business necessity.” For example, it is reasonable for a financial sector employer to conduct a credit history check on a job candidate. Also, the EEOC has established guidance for employers with respect to the use of criminal history information; the guidance differentiates between arrests and criminal convictions. The guidance disallows employer from basking hiring decision on an applicant’s arrest record; the conviction record is the only criteria that may be considered. An employer can consider a criminal conviction in employment disqualification or termination decisions but it must show that the conviction is “job related and consistent with business necessity”.
When is a Criminal Conviction Disqualification “Job Related and Consistent with Business Necessity”?
EEOC Guidance Says There Are Two Ways For Employer to Establish:
(1) SCIENTIFIC/EXPERT VALIDATION--The employer validates the criminal conduct exclusion for the position in question in light of the Uniform Guidelines on Employee Selection Procedures (if there is data or analysis about criminal conduct as related to subsequent work performance or behaviors); or
(2) TARGETED SCREEN--The employer develops a targeted screen when considering disqualification/termination because of a criminal conviction, Employer must consider:
(1) Nature/Gravity of the Offense
(2) Time since conviction and/or completion of sentence; and
(3) Nature of the job sought or held
Extreme caution must use when basing an employment decision on an employee’s credit score or history too. While the federal law allows employers to use an applicant’s credit history in the employment application process as long as doing so is job-related and consistent with business necessity, this practice may not be compliant with your state law. Ten states currently have adapted limitations on the use of credit information for employment selection purposes. Also, Federal law does not prohibit employers from inquiring about criminal convictions on an employment application. However, ten states have passed legislation disallowing employers from asking about criminal convictions on job applications; also known as “ban the box”.
Ultimately, Club’s should assess the specific role for which it is hiring and the relevance of an individual’s criminal or credit history information in making its employment selections. This will aid in determining the necessity for conducting the background checks on specific roles engaged in working with the public or financials and provide an opportunity to ensure your Club’s employee handbook is consistent with federal and state regulatory employment laws.
Background Checks Best Practices
- Eliminate/Revise policies or practices that automatically exclude people from employment based on any criminal record.
- Review your handbook with a professional HR or Employment Law expert to ensure policies are compliant with Federal and State employment laws.
- Document and be consistent in handling criminal convictions.
- Train managers, hiring officials, and decision makers about the use of criminal background information and employment discrimination.
- Keep information about applicants’ and employees’ criminal records confidential. Only use it for the purpose for which it was intended.
Now more than ever, all employers who seek or use background information face an increasing number of potential claims, we’ve covered a couple of potential pitfalls in this article, however there is an ever-evolving minefield of legal risk associated with background information. To help navigate away from some of the most common legal pitfalls, download our complimentary white paper from ClubPay’s HR Education Seminar presented by HR and Legal experts to bring awareness of what a Club can and cannot do with respect to background information, and provide practical guidance for avoiding legal claims associated with background checks.
Complimentary White Paper: "Background Checks- What you must know to protect Employees, Members & Club Assets"
Need help with your Club’s employee handbook review? Contact Us to speak with a ClubPay HRO Specialist and learn how we can help reduce liability exposures for your Club.
“Background Checks-When do they Cross the Line” HR Advisor Newsletter, September 2014:
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We welcome your specific questions or inquiries posted below regarding Background Screening Compliance and will be happy to assist.