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EEOC puts the hammer down on background checks

June 28, 2013

What would the Equal Employment Opportunity Commission (EEOC) say about your background screening process and polices? To get an idea, take a look at the agency’s recent cases against BMW and Dollar General.

These are the first major background-checking cases the EEOC has brought against employers since it issued a revised guidance on the subject in April of 2012. With these prosecutions, the agency is raising the stakes on background checking and sending a clear message to all employers that it is very serious about its guidelines and intends to enforce them.

The essence of the EEOC’s guidance is that employers cannot apply criminal and credit history checks across the board—i.e., to all jobs or to all jobs within a classification. Rather they must limit those checks only to jobs where the candidate’s criminal or credit history is clearly relevant to the job. They must also take into account the time elapsed since any relevant conviction(s) as well as the candidate’s history since that time.

For employers used to doing across-the-board background checking, this is a high bar to clear and the EEOC knows it. Under the new guidance, the legality of any background checking step the employer takes is “going to depend on what (it is) doing for you and what the nature of the conviction was . . . it’s a hard standard to meet and the EEOC means it to be,” former general counsel of the EEOC Ronald S. Cooper told The Wall Street Journal.

In the BMW and Dollar General cases, the EEOC’s complaint is that the employers applied the checks across the board, and the hiring results had a clearly disparate negative impact on black applicants.

Consider these numbers: In 2008, BMW background-checked 645 employees already working for BMW under contract to a contractor that was being replaced by another contractor. Of those checked, 88 employees were rejected. Eighty percent of those rejected were black applicants. In the Dollar General case, 344,300 prospects were background-checked over a three-year period and 26,700 were dismissed. Twenty-five percent of those background-checked were black, but 31% of those rejected were black.

Anti-discrimination advocates are applauding these and other related EEOC lawsuits (against Kaplan and Pepsi Cola), feeling they are important steps in the fight against racial discrimination. But for those managing their organizations’ hiring policies, it can get a bit confusing. How should employers approach the whole issue of background checking?

  1. First of all, do not stop doing background checks: Avoid negligent hiring by screening potential new hires and current employees who are in positions that require them.
  2. Carefully consider which checks you should do. Ask yourself if the job description requires it. For example, would you run a driving record check on someone who never will drive a company car or drive on company time?
  3. Be careful about pulling credit histories: Many states have put tight restrictions on when an employer can check credit. Michigan is not (yet) one of those states, but you should always let the most restrictive law out there determine your strategy.
  4. No blanket polices: Unless you fall under strict licensing guidelines, consider each background check “hit” you get for its relevance to the job.
  5. Individualize every assessment. Consider each applicant’s history as follows:
  • The facts or circumstances surrounding the offense or conduct
  • The number of offenses for which the individual was convicted
  • The applicant’s current level of maturity vs. likely level of maturity at the time of the crime
  • Evidence that the individual performed the same type of work post-conviction, with the same or a different employer, with no known incidents of criminal conduct
  • The length and consistency of employment history before and after the offense or conduct
  • Rehabilitation efforts since the conviction(s), e.g., education or training
  • Employment or character references and any other information regarding fitness for the particular position
  • Whether the individual is bonded under a federal, state, or local bonding program

The first step for employers is always to examine their current policies on the background screening of candidates for hire or promotion. Consult with HR leadership and the organization’s legal counsel, and revise the policy, if necessary, to comply with the EEOC’s guidelines.

Once the right policy is in place, educate the organization’s leadership and management, down to the supervisory level, on the dos and don’ts of background checking. Make sure they understand that compliance with the new guidance is not optional.

Article courtesy of SBAM Approved Partner ASE

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