Running Criminal Background Checks

Learn how to avoid legal risks if you check criminal records in hiring.

Does your company run criminal background checks on job applicants? Many do: A 2012 survey conducted by the Society for Human Resource Management (SHRM) revealed that more than two-thirds of responding employers conducted criminal records checks on all job candidates, and an additional 18% said that they conducted criminal records checks on applicants for some positions.

Criminal background checks have become a very hot legal topic lately. The Equal Employment Opportunity Commission has issued guidelines – and filed lawsuits – stating that a blanket refusal to hire any applicant with a criminal record could lead to race discrimination. Some states have been busy legislating in this area, passing “ban the box” laws that forbid employers from asking about criminal arrests and convictions on their job applications.

Perhaps in response to all of this legislating, the SHRM survey also showed that more than half of the responding employers didn’t simply reject any applicant with a criminal record, but instead allowed applicants to explain before making a final hiring decision.

If your company runs criminal background checks on applicants, here’s what you need to know.

Why Run Criminal Background Checks?

Checking criminal records and excluding applicants with certain types of convictions can help keep your workplace safe, protect company property, and protect vulnerable customers or clients from abuse and predatory behavior. It can also help your company avoid liability if a violent employee injures a customer or client. For example, some states allow employers to be sued for negligent hiring or negligent retention if they hire employees they should have known would engage in violent or dangerous behavior that injures others. (For more information on these types of lawsuits, see Employer Liability for an Employee’s Bad Acts.)

In your company does business in a highly regulated industry, state or federal law may require you to reject applicants with criminal records or with certain types of convictions. If, for example, your company contracts with the state or federal government to provide prison guards or security screeners, you might be obligated to disqualify applicants with certain types of convictions.

However, that doesn’t mean it makes sense to disqualify anyone who has ever had a brush with the criminal justice system. An arrest may have been erroneous, discriminatory, or worse. A decades-old conviction for drug possession, disturbing the peace, or resisting arrest may indicate no more than youthful indiscretions or strongly held political views (and may say nothing at all about the applicant’s ability to work for your company today).

Criminal Background Checks: Practical Problems

Here’s a sobering fact for employers that run criminal background checks: A lot of the information in them is just plain wrong. According to a survey conducted by the National Consumer Law Center, advocates see plenty of mistakes come up in criminal records, from records that are completely wrong – because they provide information about a different person, for example, or misclassify the offense – to records that are incomplete or misleading. And, some provide information on expunged or sealed records, which employers are not allowed to consider in making employment decisions.

Even if criminal records are accurate, however, they may be problematical because of the racial history of our criminal justice system. Arrest and conviction rates vary by race. Data cited by the Equal Employment Opportunity Commission (EEOC) show that arrest rates for African Americans and Latinos are two to three times higher than their percentage of the population. African American men and Latino men are also much more likely to be incarcerated: While one in 17 White men is expected to serve some prison time during his life, the figures narrow to one in six Latino men and one in three African American men. These numbers show that an employer policy of excluding anyone with an arrest or other criminal record could lead companies to screen out significant numbers of African American and Latino candidates.

Conducting a Legal Criminal Background Check

If you are hiring for a position that calls for a criminal background check, there are two federal laws you need to know about. (Many states have also legislated in this area. To find out your state’s rules, select it from the list at State Laws on Use of Arrests and Convictions in Employment.)

The Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) imposes procedural requirements on companies that run background checks and employers that use them. The law doesn’t prohibit employers from checking criminal records and making job decisions (including the decision not to hire an applicant) based on them.

Most employers outsource this task. If you are one of them, the agency or company that provides the report must follow certain guidelines. When it comes to criminal records, the agency may not include arrest records that are more than seven years old, unless the position pays more than $75,000 per year. There's no time limit for conviction records. In general, the agency must also take reasonable steps to make sure the information is accurate and includes updates, such as expungement of a criminal record. If the applicant disputes the accuracy of the record it provides, the agency must conduct a reasonable investigation.

Under the FCRA, an employer that hires an agency to conduct a criminal background check must first get the applicant’s written consent, must inform the applicant if it plans not to hire him or her based on the information in the report, and must give the applicant a copy of the report and information on how to dispute its contents.

Title VII of the Civil Rights Act

Title VII prohibits discrimination in employment, including screening and hiring practices. In 2012, the Equal Employment Opportunity Commission (EEOC), which enforces Title VII, issued enforcement guidance on employer use of criminal records in hiring. The EEOC has long warned that an employer’s general policy of refusing to hire anyone with a criminal record could be discriminatory, given the much higher arrest rates of African Americans and Latinos.

The EEOC’s guidance states that disqualifying applicants based on criminal records could lead to two types of discrimination claims:

  • If the employer treats applicants of different races or nationalities differently in the hiring process, that could lead to a “disparate treatment” claim. For example, an employer that runs criminal background checks only on non-White applicants, excuses minor offenses by White applicants while excluding Latino applicants for the same types of records, or assumes that an African American with a youthful drug offense poses a safety risk while a White applicant with a similar offense did not, that employer is treating applicants differently based on their race or national origin.
  • If the employer applies a uniform policy that has a disproportionately negative effect on applicants of certain races, that could lead to a “disparate impact” claim.

However, the EEOC also recognizes that employers have perfectly good reasons for wanting to screen applicants and exclude those who have committed certain offenses. The guidance provides three factors employers should consider when deciding whether a particular applicant’s criminal record warrants rejection:

  • the nature and gravity of the criminal offense or conduct
  • how much time has passed since the offense or sentence, and
  • the nature of the job (including where it is performed, how much supervision and interaction with others the employee will have, and so on).

Even if these factors show that the applicant may pose a risk, the employer should provide an opportunity for the applicant to explain why he or she shouldn’t be excluded based on the offense. For example, the applicant might show that the criminal record is simply incorrect. Or, the applicant might provide facts about what really happened, previous work history, rehabilitation efforts, and so on, in an effort to demonstrate that the record shouldn’t disqualify the applicant from the position.

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