Employee background checks: criminal history off limits

A wave of legislation preventing employers from considering the criminal history of potential candidates, specifically information relating to arrest and conviction records, is the latest burden placed on employers looking to recruit new talent. The so-called ‘ban the box’ movement prevents employers from asking about or obtaining information on the criminal history of prospective employees at the application and preliminary interview stages of the recruitment process to avoid discrimination against former offenders entering the workforce.

The movement has achieved significant momentum in the United States, where one in four adults has a conviction history of some description. Over 12 states and 60 cities and counties have now enacted some form of law or policy banning employers from obtaining the criminal history of candidates, and several large companies, including Target and Walmart, have removed the question relating to criminal history from their application forms.

Support for the movement is also increasing in Europe and across the rest of the globe.

What employers need to be aware of

While ban-the-box laws vary in their makeup, in general they prevent employers from conducting background checks on, or considering, the criminal history of applicants until after the job application and preliminary interview stages of the recruitment process. The laws may apply to either public or private employers and can include temporary, contract and part-time roles as well as full-time permanent roles. Some versions of the law (for example in Baltimore) impose harsh penalties of criminal charges and fines on employers who breach ban-the-box obligations.

Other versions of the law (for example San Francisco’s Fair Chance Ordinance) prevent employers from enquiring about or considering:

  • arrests not leading to conviction
  • participation in a diversion programme
  • convictions that have been dismissed, expunged or rendered inoperative
  • juvenile offences or determinations in the juvenile justice system
  • convictions that are more than seven years old (from the date of sentencing)
  • information relating to an offence other than a felony or misdemeanour (e.g. an infraction).

The United States Equal Employment Opportunity Commission (EEOC) issued a 2012 guidance recommending that employers follow ban-the-box laws. Part of the drive by the EEOC for ban-the-box laws was a growing concern over the inaccuracy of the criminal records in commercial databases. The prevalence of freely-available, and often inaccurate, information on criminal history, together with the explosion of companies offering background-check services, is concerning for employers as it increases the likelihood of obtaining misreported information and falsely identifying criminal backgrounds of potential employees.

It is estimated that between 10,000 and 12,000 names are added to the United States Federal Bureau of Investigation’s criminal database each day for arrests. This arrest information does not typically describe what happens next in the process, or remove people whose charges have been dropped or who are arrested but not convicted. In addition, it is estimated that only half of the records contain fully up-to-date information.

These statistics, together with the increasing number of companies offering to provide background checks, present a difficult landscape for employers to negotiate when conducting due diligence on new hires. Employers face a challenge to ensure that their background-check providers comply with best-practice standards of ethics and integrity, obtain accurate information, and comply with the varying versions of ban-the-box laws from location to location.

What employers need to do

To mitigate the risk of potential liability, employers should make sure that careful records are kept of the recruitment process, including documentation on the reasons for hiring or not hiring candidates. Employers should also review recruitment policies and application materials (including online applications) to comply with ban-the-box legislation in each of their locations.

Employers in some industries, such as the financial industry, are required by law to consider the criminal history of applicants and many ban-the-box laws carve out exceptions in this regard. Employers will need to consider the laws specific to their industry and location in order to ensure best-practice compliance.

Compliance ramifications

Ban-the-box laws increase the risk of exposure to litigation for employers. Employers are faced with conflicting risks: not conducting thorough background checks of criminal history of applicants and potential negligent hiring lawsuits, or conducting thorough background checks and facing possible ban-the-box discrimination lawsuits if individuals with a criminal history are not hired.

Employers relying on third-party vendors to manage this process on their behalf and conduct background checks on potential candidates should carefully consider their options. Ban-the-box laws extend to third party background checks, and automatic gathering of prohibited criminal-history information by third party background-check providers should be avoided to protect employers from exposure.

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