When an employer uses an applicant’s background information to make informed employment decisions, they must do so in compliance with a number of federal and regulatory laws in place to protect applicants from any type of discrimination. The “End User” legal responsibilities include:

1. Establishing Permissible Purpose
2. Disclosure and Authorization
3. Evaluation; and
4. Adverse Action Notification

Let’s take a deeper look at End User responsibilities based on Equal Employment Opportunity Commission (EEOC) and Fair Credit Reporting Act (FCRA) guidelines.

Permissible Purpose

According to the FCRA, the End User must have a legal permissible purpose for requesting a background screen report. End Users requesting background checks from A-Check Global do so under the legal permissible purpose of employment. The permissible purpose of employment maintains slightly different rules from other consumer report permissible purposes. Of these rules, the End User’s responsibility of Disclosure and Authorization is one of the most crucial requiring compliance.

Disclosure and Authorization

The End User must properly disclose that they will conduct a background screen—and subsequently will receive a background information report—in a document consisting solely of the Disclosure. Following this disclosure, the next required step is to obtain authorization from the applicant prior to processing their background screen. It is the End User’s responsibility to manage the forms they provide to applicants. These forms are often referred to as Disclosure and/or Authorization forms and provide the applicant with details pertaining to permissible purpose for conducting the background investigation, and their rights throughout the process. Disclosure and Authorization forms can typically be signed physically or electronically. However, your company or organization should always consult with your legal team to confirm you are utilizing the appropriate forms, and, if you are utilizing an electronic signature option, to ensure your system complies with the E-SIGN Act of 1999 and UETA requirements. For additional information about this responsibility, you may contact A-Check Global and we will provide information on utilizing A-Check Global’s pre-prepared forms. After disclosure and authorization, End Users must focus on evaluation.

Evaluation

Evaluating background screening results is the responsibility of each hiring company or organization. Your background screening agency is legally unable to evaluate the background screen and make hiring decisions. While agencies may adjudicate reports based on a pre-defined matrix supplied by the End User, the End User must review and evaluate each report, prior to making a hiring decision, in order to maintain compliance.

The EEOC states that End Users perform the following steps when utilizing background information in making a hiring decision:

• Apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age.
• Take special care when basing employment decisions on background problems that may be more common among people of a protected class.
• Be prepared to make exceptions for problems revealed during a background check that were caused by a disability.

In the event that an evaluation yields a negative result, employers must participate in the adverse action process.

Adverse Action

Whenever Adverse Action is taken based on background screening results, the End User must notify the candidate. For instance, if you do not hire an individual based on criminal records located during the background screening process, you must supply the candidate with a pre-adverse notification followed by a final adverse notification.

The pre-adverse notification will afford the candidate the opportunity to dispute the findings on their report. It should provide details about the agency that completed the report, including the contact information to be used should the candidate wish to file a dispute. The Final Adverse Notification should be sent within a reasonable timeframe after the pre-adverse notification. While there is no time frame specified by the FCRA, A-Check Global best practices suggest waiting at least five days before sending the final notification and continuing to hold the job open in any case where the applicant files a dispute.

Regulatory compliance plays a major role in the background screening process. There are many potential risks and liabilities associated with utilizing reports, and it is in your company or organization’s best interest to follow best practices, guidelines and regulations outlined by the FCRA and EEOC. As the End User of a consumer or investigative background screen report, you have a number of responsibilities and should remain proactive in maintaining an understanding of these responsibilities, at all times. And as always, if you have any questions you may contact us at 877-345-2021 or clientsupport@acheckglobal.com.

Welcome to the third blog in our CRAsh Course on consumer reporting. In this article, we continue to focus on changes implemented since the Great Recession by looking deeper into Ban the Box laws—fair hiring practices that put a candidate’s qualifications first by removing questions about criminal history.

A Fair Chance for Applicants – the Rise of Ban the Box Legislation

In our last article  we discussed how the Great Recession drove lawmakers to place limits on the use of credit reports in consumer reporting. This time, we look into Ban the Box laws which also gained popularity toward the end of the economic crisis.

Prior to the Great Recession, Hawaii was the only state with Ban the Box legislation in place. Since 2009, twenty-eight additional states have enacted some form of statewide Ban the Box policy. In states without Ban the Box laws, cities and counties have enacted their own regulations.

During the crisis, high rates of unemployment led to increased competition between applicants. As a result, many people admitting to a criminal record on their application were immediately disregarded without any consideration for previous work history, or received no thoughtful analysis of how their criminal record affected their ability to perform job duties.

To combat this, Ban the Box regulations were designed to give people with a criminal record a better chance at gaining employment. By forcing employers to wait until an interview has taken place, or until a job offer has been made, proponents of these laws believe people with convictions have a better shot at getting a job.

Recently, the effectiveness of these laws has come into question; however, states continue to enact legislation banning employers from asking for conviction history during the application process. In 2017 alone, Indiana, Kentucky, Nevada, Pennsylvania and Utah had laws “banning the box” go into effect.

Employee rights organizations, like the National Employment Law Project (NELP), also feature Ban the Box laws prominently in their platforms. Support for the laws appears alongside topics covered extensively by the media, such as the $15 minimum wage movement, and furthering rights for “gig” workers like Uber drivers.

Remaining Compliant and Best Practices

The patchwork rollout of Ban the Box regulations can make compliance with these laws daunting. 29 states and 150 municipalities have enacted Ban the Box regulations for at least some employees. Nine states have Ban the Box laws in place for all employees. There is currently no federal law affecting private companies. This makes creating nationwide best practices difficult.

It is important for employers to know the laws of their jurisdiction, or the jurisdictions where they have hiring locations. This list, completed by the Society for Human Resource Management (SHRM), has information on all states and municipalities with Ban the Box laws in effect. It can help you determine if your company is in a jurisdiction with a Ban the Box law.

As the laws vary, often times even from city to city, even smaller businesses with only a few offices could have different requirements from one location to the next. To simplify their processes, many companies like Walmart, Target and Home Depot, have enacted companywide Ban the Box policies. You may wish to go this route as well.

Estimates show that nearly two-thirds of employees live in an area with a Ban the Box policy in place, so it’s likely you’re already working in a jurisdiction with Ban the Box legislation. To ensure compliance, your application and hiring processes should be reviewed by a legal or HR professional. It’s also a good idea to periodically review your policies against current law and make updates when needed.

If you are not in a jurisdiction with Ban the Box laws in place, best practice is to remain updated on potential regulations that could go into effect. Subscribing to Human Resource oriented blogs and Google Alerts related to Ban the Box can be a simple, inexpensive way to stay informed.

Contracting with a background screening company committed to compliance—like A-Check Global—can also help you remain compliant with these laws. As many background screening companies host the application or applicant consent process for their clients, they are also often responsible for complying with Ban the Box.

For more information about this topic, or to discuss information on consumer reporting, feel free to contact us at connect@acheckglobal.com.