Data Facts Background Screening Blog

Changes in Legislation that Affects Background Screening

by Susan McCullah

Aug 28, 2019 1:30:00 PM

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gavel with keyboardMost of today’s companies utilize some sort of background screening process before making a hiring decision. Criminal searches, driving record searches, reference checks, employment and education verifications, assessment testing, credit checks, and drug screening all fall under the “background screening” umbrella.

Screening an applicant’s background provides an employer several benefits. It offers a more complete picture of the candidate, verifies the validity of what they may have claimed in their resume and the interview, and identifies problem attitudes and behaviors that could be harmful to a workplace.

While background screening definitely has an important place in the hiring process, the process needs to be handled in a fair and compliant manner. In recent years, there have been a couple of regulation trends geared toward making certain employers aren’t using them in a discriminatory manner.

The first one is…

Ban the Box Laws

The “ban the box” movement began to give those with criminal histories a fair chance to be viewed by their education and experience, rather than being passed over because they were a convicted felon.

The argument behind this trend is that when convicted criminals cannot find jobs they are more likely to re-offend. According to a recent article by Phillip Rondeau:

"Every year, 650,000 people in the United States leave prison to re-enter society, and they often find themselves shut out of opportunities to make an honest living. They have difficulty reintegrating into their communities and many end up back behind bars. This cycle leaves families and communities damaged and imposes substantial costs on taxpayers. Reliable employment is one of the most important factors for successful re-entry, yet is more difficult for having a criminal record. People with a record have consistently lower earning potential and higher unemployment rates than others, and this contributes to recidivism."

Ban the box laws were passed to address this issue.

States and Cities with Ban the Box laws

Today, 33 states, the District of Columbia, and 150 cities and counties have passed a version of ban the box laws.

How does Ban the Box legislation affect your background screening process?

First off, employers don’t need to avoid criminal record searches all together. It’s just time to be more careful.

  • Do away with “blanket” policies. Companies must step away from “we don’t hire anyone with a criminal record” stances. This standpoint can be viewed as discriminatory and get you sued.
  • Consider the job before screening. It’s relevant to know if someone applying for a cashier job has an embezzling conviction however, such a charge doesn’t need to influence someone looking to land a janitor position.
  • Move your screening to later in the process. Instead of requiring it on the application at the beginning of the process, this gives you a chance to view the person’s qualifications and fit before you know of a criminal history.

The second legislation trend that is affecting background screening is…

Limiting the Use of Credit Checks in Background Screening

Today, over a dozen states and cities have banned or restricted using a candidate’s credit history to determine whether to extend a job offer.

Since the last recession, using credit history in background screening has been scrutinized closely. Yes, there are certain jobs that require a strong credit check, but those are a small percentage of positions. Using an applicant’s credit history in the background screening process can be seen as discriminatory and irrelevant and pose an obstacle that prevents them from securing a job.

Limiting the use of a person’s credit history as part of their background check helps those with past credit problems, or those where their credit has nothing to do with the job they are seeking, to become employed.

How does Credit Check legislation affect your background screening process?

As with the Ban the Box laws, HR doesn’t need to scratch using credit checks on job candidates for everyone. They just need to approach it thoughtfully.

  • Only use a person’s credit history as part of their background check if it’s relevant to the position. For example, if the employee will be handling large sums of money, have access to sensitive consumer information, trade secrets, or have the authority to sign transactions on behalf of the company.
  • Create a written plan. If your organization will use credit checks for employment decisions in any capacity, write out the procedure. What type of positions will you consider credit history? When will you use it in the process? What issues stemming from a person’s credit report show will sway you to not hire them? Laying this all out in advance helps protect you from a discriminatory lawsuit down the road.

Important note! Always stay abreast of the current and upcoming laws governing both Ban the Box and limiting credit history use in employment decisions. Edit your background screening policies accordingly.

HR is tasked with hiring the people who will perform that best and be a good fit within the company’s culture. It’s a big job! Background screening is a key element in making certain new employees are qualified for the position and are a safe addition to the workplace.

The recent trends of limiting certain ways to screen job applicants should not deter HR from using background screening. Now is the time to review your current screening process to ensure it’s used in a relevant and fair manner, and it complies with your state’s laws. Doing this will maximize the effectiveness of your process and minimize the chances of making a bad hire.

This article is not intended as legal advice, only as a general guide. If you have questions regarding the applicability of these laws in the state(s) where your company does business, you should contact your state department of labor.

Topics: Litigation avoidance, background screening practices, Ban the Box, Employer use of criminal records

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~~Susan McCullah is the Marketing Project Manager/ Background Screening Division for Data Facts, Inc, a 25 year old Memphis based company. Data Facts Inc -an NAPBS accredited company- is a leading provider of employment screening solutions. Check out our website for a complete explanation of our services.