Articles Posted in Background Checks

Criminal histories and credit scores will soon be an off-limit topic for job applications in Delaware’s public sector.  HB 167 passed the Delaware Senate on May 1, 2014, and is expected to be signed into law by Gov. Markell soon.  Criminal Background Checks

As we previously reported, the bill would prohibit public employers and contractors with State agencies from:

inquiring into or considering the criminal record, criminal history, or credit history or score of an applicant before it makes a conditional offer to the applicant.

Once a conditional offer of employment has been made, the employer may perform a background check but, even then, 

may only consider felonies for 10 years from the completion of the sentence, and misdemeanors for 5 years from the completion of the sentence.

The bill would also require employers to “several enumerated factors” (i.e., the EEOC’s factors) when deciding whether to revoke a conditional offer based on the results of a background check.

The scope of the bill is broader than you may suspect.  It would apply not only to public employers (i.e., State government), but also to “contractors with State agencies.”  It does, however, provide for an exception for contractors who are subject to conflicting State or federal laws.  For example, a child-care facility that contracts with the State would not be subject to the new law because it is obligated by other State laws to comply with certain background-screening requirements. 

The trend towards prohibiting employers from inquiring into an applicant’s criminal history or credit score does not appear to be going away any time soon.  Although, for now, only public employers in Delaware will be subject to this ban-the-box law, it may be just a matter of time before the scope is expanded to include private-sector employers, as well. 

See also

Bill Would Limit Use of Criminal Histories for Delaware Employers

Wilmington Joins the Ban-the-Box Bandwagon

Other posts on criminal-history checks for potential employees

So-called “ban-the-box” initiatives, which limit employers’ inquiries into an applicant’s criminal history, have been adopted by several cities and municipalities.  Philadelphia adopted such a law in the Spring of 2011.  The City of Wilmington joined the ban-the-box bandwagon in Fall 2012, when then-Mayor Baker signed an executive order that removed a question about criminal convictions from job applications.  But that executive order applied only to applicants seeking work with the City of Wilmington.  Other Delaware employers have not been subject to these restrictions.

A bill is pending in the Delaware legislature, though, would change that and more if passed.

H.B. 167 proposes to limit when public employers and government contractors may inquire about or consider the criminal background or credit history.   The employer would not be permitted to ask about this information until “after it has determined that the applicant is otherwise qualified and has conditionally offered the applicant the position.”  Thus, a covered employer would be prohibited from asking about criminal or credit history until at least the first interview-no more checkboxes on job application.

The bill also proposes to limit the specific types of information that can be requested. Covered employers would be permitted to ask only about: (a) felony convictions in the past 10 years; and (b) misdemeanor convictions in the past 5 years.

This means that questions about arrests would be totally off limits-both on applications and in in-person interviews.

Finally, the bill proposes to limit how the information that the employer obtains will impact the hiring decision.  The bill basically adopts a scaled-down version of the EEOC’s multi-factor analysis whereby employers would be required to consider the nature of the crime and its relationship to the position sought, how much time has passed, etc. 

Oddly, the bill offers no specific limits on the use of credit history information other than timing.  In other words, the bill prohibits covered employers from obtaining a credit report for the candidate until a conditional offer has been made.

Even for private-sector employers who do no business with the State or any State agency, the use of background checks as part of the screening process continues to warrant consideration.  Particularly since the laws around the country are still developing, employers should weigh the benefits of this checks against the risks.  (See 5 Reasons Why Criminal Background Checks Are a Perfect Storm for a Lawsuit).  And, if nothing else, employers should evaluate the process and policies in place for conducting such checks.

“Give Me Some Credit!” Maybe that’s how the EEOC feels these days, after its high-profile suit against Kaplan Higher Education Corp. was dismissed on January 28, 2013. As readers may remember, the EEOC sued Kaplan in 2010, alleging that its pre-employment credit check policies had a disparate impact upon Black job applicants.

In a 23-page opinion, the U.S. District Court for the Northern District of Ohio dismissed the suit on Kaplan’s Motion for Summary Judgment. The Court first excluded the expert witness testimony offered by the EEOC, holding that it was scientifically unsound. Expert witness testimony is key in disparate impact cases, because they rise and fall on the percentage of job applicants from a given classification as compared to the percentage of hires in the same classification. Among the key problems for the EEOC was that Kaplan, like many employers, does not collect demographic information on the race of job applicants. As a result, EEOC struggled to identify the races of those applicants that were rejected due to credit problems. In an effort to remedy the problem, the EEOC subpoenaed records from state DMVs, and used a team of “race raters” to review the DMV photos and assign races to the job applicants. The Court, not surprisingly, rejected this approach and the resulting expert witness analysis.

Next the Court addressed Kaplan’s Motion for Summary Judgment. In the absence of any statistical evidence demonstrating an adverse impact caused by the use of credit checks, the Court held that the EEOC’s case had to be dismissed.

There are several interesting considerations arising out of this litigation. First, as the Court’s decision noted, the EEOC itself uses credit checks to vet job applicants! This should not come as a great surprise, as many employers use credit checks as one of a litany of tools at their disposal to identify the best-qualified candidates. Nonetheless, for an agency that has widely publicized the pitfalls of background checks in the hiring process, its adoption of the practice calls its hardline stance into question.

Second, the EEOC’s past enforcement practices gave rise to many of its difficulties in this case. Many employment law attorneys discourage their clients from collecting race, gender, and other protected-characteristic data during the application process. In the past, the EEOC has used such information to support disparate hiring claims. Kaplan, in complying with EEOC best practices, deprived the EEOC of information that it needed to prove its case, thereby leading to the rejected “race rater” approach.

Finally, many employment law experts and EEOC-watchers are wondering if the Court’s decision will put a damper on EEOC enforcement efforts directed at background checks. As readers of this blog know, background checks have been in the EEOC’s cross-hairs for quite some time, with new guidance issued on the use of criminal background checks in April 2012. In light of the hurdles faced in this case, many are speculating that the EEOC may back off of its efforts to litigate these issues, focusing instead on conciliation efforts.

Only time will tell. In the meantime, employers can rejoice in a victory for the reasoned and supportable use of pre-employment credit checks.

Employers’ Ban-the-Box initiatives are taking hold in many states and municipalities. The City of Wilmington has joined the ranks of employers no longer requiring information on an applicant’s criminal history at the time of job application. Mayor Baker signed an executive order on Monday that removes a question about criminal convictions from city job applications.

criminal background.jpg

According to Mayor Baker, the city will now conduct criminal background checks only on applicants who have received a conditional job offer. Public safety jobs in the police and fire departments are the only positions excluded from the order.

Mayor Baker’s initiative is a good idea for many reasons. According to the article, nearly one in four job applicants has some kind of criminal past. That is a significant portion of the population who could be automatically denied employment, and deprived of the opportunity to be a productive member of society, by employers taking an inflexible position on criminal background. Moreover, the practice of not hiring applicants with a criminal record disproportionately affects certain segments of the population: predominantly Hispanics and blacks. Because of this adverse impact, the EEOC has taken a particular interest in this practice.

In order to exclude applicants based on a criminal record and successfully defend an EEOC inquiry, the employer must prove that the exclusion was “job-related and consistent with business necessity.” In other words, the employer should be able to articulate its logic if it denies employment to an applicant based on criminal history. For example an employer hiring a cashier position who learns that an applicant embezzled from a prior employer five years ago passes the smell test for exclusion. On the other hand, it is much harder to justify excluding an applicant who is going to load pallets in the warehouse, because he wrote a bad check once. The severity of the crime, its relationship to the job, how long ago it was committed, are all factors that should be considered with each decision.

In April of last year, the EEOC issued an Enforcement Guidance on the Consideration of Arrest and Conviction Records. The Guidance laid out the statistical case for a heightened scrutiny of criminal background checks. While it does not outright ban asking about criminal history on a job application, it does strongly discourage the practice, and recommends that the employer wait as late as in the hiring process as possible to request this information. By waiting until an employee has been extended a conditional offer of employment, the City of Wilmington has done just what the EEOC advises.

Previous posts on criminal-history checks for potential employees.

Delaware employers in the long-term- and community-care industries are subject to new background-check requirements.  The Delaware Code as amended by S.B. 216 to establish an electronic web-based “background check center” for employment in long-term care or community settings.  S.B. 216 was signed by Gov. Markell on July 5, 2012. 

Creation of a Background Check Center

The biggest change is the creation of a new “Background Check Center.”  The stated purpose of the Center is to “consolidate various data streams” from inside and outside the State of Delaware, as necessary to conduct a proper background search. 

In short, it requires covered employers to use the Center to perform mandatory criminal background checks for new employees.  Nursing or similar facilities, hospice, home-health, and home-care agencies are subject to the law. 

There will be a fee for the background check, which is subject to change each year based on the Center’s operating costs. The statute specifically provides that applicants will be provided with “due process protections of notice and opportunity to be heard,” as well as the right to appeal.

Criminal-History Checks

S.B. 216 also amended the law relating to criminal-history checks performed by employers operating long-term-care facilities.  For example, these employers are now required to use the Background Check Centers, as described above.  Some other key changes for employers include:

  • An applicant may be “conditionally hired” for 60 days but only if the employer has first received verification that the applicant has been fingerprinted by the State Bureau of Identification
  • Criminal histories are to be treated as “strictly confidential” and must be stored in manner that maintains such confidentiality.

Employers aren’t the only ones with new obligations, though.  Employees who were grandfathered in under the original version of the statute have 120 days from the date the Background Check Center is implemented to submit to fingerprinting and a criminal background check. 

Applicants have some new obligations, too.  They are required to execute a release that allows the employer to obtain a criminal history before the time of hire and post-hire for the purpose of updating the history during employment. 

Failure to comply will be costly.  Employers and applicants who fail to comply will be subject to a civil penalty of between $1,000 and $5,000 for each violation.

Key Take-Aways for Delaware Employers

The changes to the law is significant-but only for employers and potential employees in the long-term-care industry.  Employers in other industries are not affected and should be aware of the national trend away from the use of criminal histories as part of the hiring process.  However, for covered employers, the changes are many take effect immediately following the creation of the State’s Background Check Center, so be sure to consult with your employment law counsel about the steps you should be taking to prepare.

See also:

EEOC Publishes Guidance on Consideration of Arrest and Conviction Records

5 Reasons Why Criminal Background Checks Are a Perfect Storm for a Lawsuit

New Philly Law Limits Use of Criminal-Background Checks

Employers’ use of social media as part of the hiring process continues to make the news. Although much has been made of the nuances of the idea, cyber-screening can be performed lawfully and with positive results–when it’s done properly. When it’s not, though, there can be lots of significant consequences.

To avoid the risks associated with cyber-screening (or to combat a fear of the unknown, perhaps), some employers have turned the task to outside vendors. Instead of performing a Google search on a candidate as part of the in-house screening process, some employers are paying a third party to conduct the search as part of the background check.

I recognize that many companies feel that this reduces the risk that they’ll be sued for failure to hire. But the idea of outsourcing this process seems to significantly reduce the benefits. Employers like cyber-screening, in part, anyway, because it’s free and gives immediate results. Outsourced screenings cost money and take time.

And there’s another downside to using a vendor for this process. Once you involve a third party in the background-check process, you are obligated to comply with the very specific requirements of the Fair Credit Reporting Act (FCRA). If you use a vendor to perform background checks of any kind, you’re already familiar with these requirements. You also already know how important it is that you use a reputable vendor who will meet all of its obligations under the FCRA.

So maybe that’s why the Federal Trade Commission (FTC) is so ticked off at Spokeo, one of the handful of new businesses that market themselves as a social-media-search provider. The FTC’s complaint alleged that the company failed to follow the FCRA’s requirements when conducting its social-media searches on behalf of employers. The complaint also alleged that Spokeo’s managers encouraged employees to post online reviews of the company in violation of the FTC’s endorsement guidelines, reports Information Week.

Spokeo has agreed to settle the lawsuit but it’s going to cost ’em. The consent order that will resolve the suit, if approved, would require Spokeo to pay an $800,000 civil penalty and remain under Court supervision for 20 years.

This is quite a jump from the FTC’s recent approval of a different social-media screening company. So which is it–can employers outsource these searches safely . . . or not? What’s the lesson here for employers? Simply put–seek qualified legal counsel to help you ensure that your hiring practices comply with the law. Hiring is a critical component of the employment process and it is a worthwhile investment to get it right the first time around.

For more about the FTC’s endorsement guidelines, a critical component of any social-media policy, see:
Another Reason Employers Need a Social-Media Policy: New FTC Regulations
Turns Out FTC Actually Expects You to Follow Its Rules
FTC Is Not Amused by Employees’ PDA for Their Employees

Employers who request an employee’s or job applicant’s Facebook password continue to face pushback in legislatures across the country. As I posted last week, several states have introduced bills that would prohibit this type of coerced Facebook access. These states are following Maryland’s example–Maryland was the first (and only, at the moment), to pass this type of law.

Two U.S. Senators were the first on the bandwagon, though, but their bill was unsuccessful. But a new version of the bill made its way back to the House of Representatives on Friday, courtesy of New York congressman Eliot Engel (D).

The bill, Social Networking Online Protection Act (SNOPA), which is cosponsored by Rep. Jan Schakowsky (D-IL), would restrict current or potential employers “from requiring a username, password or other access to online content,” reports ZDNet.com. Specifically, the bill would prevent employers from seeking access to social networking sites “to discipline, discriminate or deny employment to individuals, nor punish them for refusing to volunteer the information.”

SNOPA, like some of its state-law counterparts, would extend to colleges, universities and K-12 schools.

Stay tuned as this rapidly changing area of the law continues to develop.

See also:
Employers Who Demand Facebook Passwords from Employees. Oy Vey.
Maryland Law Makes It Unlawful to Request Facebook Passwords from Job Applicants
California Law Moves Closer to Prohibiting Employers From Requesting Facebook Passwords From Applicants
Should Cyberscreening by Employers Be Legislated?
Lawfulness of Employers’ Demands for Employees’ Facebook Passwords

The EEOC released Guidance on the Consideration of Arrest and Conviction Records Under Title VII of the Civil Rights Act of 1964 (PDF)
This guidance, issued on April 25, 2012has been much anticipated since the EEOC held a public hearing on this topic last summer. If you were not already aware of the issue, the crux is this: arrest and incarceration rates are significantly higher in certain ethnic groups than others. African Americans and Hispanics are arrested at a rate that is 2 to 3 times their proportion of the general population. Therefore, if an employer exclude individuals based solely on their criminal records, that decision is likely to disproportionately affect certain ethnic groups, thereby violating Title VII.

The Guidance discusses the difference between arrest and conviction records, and explains what factors must be considered in determining whether or not consideration of criminal history will be determined to be “job related and consistent with business necessity.”

The Guidance does not, however, address credit checks, which were also the topic of a public hearing by the EEOC. Some sources have indicated initial drafts of the guidance provided that there would almost never be a business necessity to use credit for employment–and stirred up quite a bit of controversy. For now, though, it remains to be seen what the final guidance on credit checks will say.

The release of the Guidance on criminal records was perfectly timed with YCST’s upcoming Annual Employment Law Seminar, on May 9, when Lauren Moak and I will discuss the topic of background checks in a dedicated session. For a complete analysis of this Guidance and what it means for employers, we will see you there!

Maryland was the first state to pass legislation prohibiting employers from requiring an employee or applicant to turn over his or her Facebook password or log-in information for other social-networking sites.

On April 19, 2012, a similar law moved forward in the California state legislature.

And there are others. Here’s a quick run-down of other states that are considering similar legislation:

See also:
Employers Who Demand Facebook Passwords From Employees. Oy Vey.
Should Cyber-Screening Be Legislated?
Lawfulness of Employers’ Demand for Employees’ Passwords

Maryland was the first state in the country to pass legislation that would prohibit employers from requesting or requiring an applicant or employee to turn over his or her password to a social-networking account, such as Facebook. As I mentioned in the end of my post about the Maryland bill, California and Illinois had similar pieces of legislation in the works.

Yesterday, California inched closer to become the second state to adopt this new type of privacy law, reports the Sacramento Bee.

Senate Bill 1349 bans employers and educational institutions from requiring or formally requesting in writing that prospective or current employees and students to hand over their user names and passwords or provide access to the account. The bill, introduced by Sen. Leland Yee (D), was approved by the Senate Education Committee 7-0 and now heads to the Senate Labor and Industrial Relations Committee for consideration.

See also
Employers Who Ask for Applicants’ Social-Media Passwords. Oy Vey.
Should Cyber-Screening Be Legislated?
Lawfulness of Employer’s Demand for Applicants’ Facebook Passwords

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