Tag Archives: Fair Credit Reporting Act

Job Posting and Ban the Box

Contributed by Mike Wong, February 18, 2019

job application on a laptop screen

Over 33 states and 150 cities, counties and municipalities have enacted Ban-the Box laws that prohibit employers from asking about an applicant’s criminal record or criminal history prior to the applicant being selected for an interview or, if there is no interview, prior to a conditional offer of employment.

But did you know that Ban-the-Box laws can also impact your job posting or advertisement?

Yes, these laws can, and much like the Fair Credit Reporting Act (FCRA) and Americans with Disabilities Act (ADA), Ban the Box laws are being used by “professional plaintiffs” to go after employers for technical violations.

For example, New Jersey, New York City, Washington and Wisconsin’s Ban the Box laws specifically prohibit employers from asking applicants about their criminal history before making a job offer – including in job postings.  In those jurisdictions, having job postings or advertisements that state: “background check is required,” “clean criminal history,” “no felons,” “no criminal background,” or any other language that expresses any limitation in the hiring of an individual, directly or indirectly, based on his or her arrest or criminal background violate the law.

While the majority of Ban the Box laws do not expressly include prohibitions of such language in job postings and advertisements, employers now have potential exposure if they decide to include language of that kind. For example, an applicant could argue that while a state or local law does not expressly prohibit using language regarding criminal history in a job positing or advertisement, by doing so the employer is, in essence, unlawfully seeking criminal history information from job candidates. Additionally, if the state or local law prohibits discrimination against individuals with arrest records, the same legal argument the EEOC uses for Title VII discrimination claims based on arrests or convictions could be used – i.e., that the use of arrest records has a disparate impact on individuals of certain protected classes by eliminating, for example, more African American or Hispanic applicants as compared to applicants outside those groups.

Thus, while Ban the Box seems pretty straightforward, it is important to understand the details of each state and local law that may apply to your business. Moreover, it is important to review you job postings, advertisements and recruiting materials to make sure that they are up to date and not creating potential liability for you.

Criminal Background Checks: What You Know Can Be Used Against You

Submitted by Caryl Lazzaro Flannery

Would you want to know if you were about to offer a job to a convicted felon? Most employers would say “of course,” but both seeking and acting on that information could land you in legal trouble.  Before obtaining criminal background information on all potential new hires, you should know that the U.S. Consumer Financial Protection Bureau, the EEOC, and your state government may have something to say about that practice.

As a general rule, it is legal to inquire into the criminal history of employees and potential employees; however, concerns about fraud and discrimination are bringing those inquiries under increased scrutiny.  An employer who uses a third party screening company to obtain information about an individual’s credit history, criminal background, or other personal information must follow the procedures set out in the Fair Credit Reporting Act (“FCRA”).  Administered by Consumer Financial Protection Bureau (“CFPB”), the FCRA is designed to give individuals a chance to clear up errors in government records before being denied employment based on inaccurate or incomplete information.  If you are using a covered third party agency, you must follow very specific procedures to obtain and act on the information you receive.  Requirements include obtaining written consent before obtaining information, giving the employee notice and a copy of the report before taking any adverse action, and providing additional, post-action notice.  Employers who do not follow FCRA procedures are subject to fines, actual and punitive damages, and even criminal prosecution.

Do-it-yourself criminal background checks may also pose problems.  Although the FCRA does not apply to an employer’s own efforts to obtain background information, an increasing number of states have enacted laws to restrict what may be obtained and considered.  Some states have enacted “ban the box” laws which prohibit most employers from making any inquiry as to criminal history.  Illinois is among several states that permit an employer to inquire about convictions, but not arrests.  Illinois goes one step further, forbidding employers to ask about convictions that have been sealed or expunged, and applicants for state government jobs are not asked about criminal convictions at all.  Indiana has similarly restrictive laws and even gives convicted persons the opportunity to petition the court to have certain conviction records expunged. Other states, such as Missouri, have no laws restricting or regulating inquiries about and use of criminal or arrest information, but this is becoming the minority position.

Recently, the EEOC has weighed in, giving increased scrutiny to the use of criminal background checks as an employment screening tool.  Citing significant disparities in arrests and convictions between people of color and Caucasians, policies that automatically disqualify convicted criminals from employment are viewed as potential tools for purposeful discrimination or unintended disparate impact.  Over the last year, the EEOC has filed several high-profile lawsuits against employers who failed to hire or terminated employees solely on the basis of criminal conviction information.  The relationship between the crime and the job will be scrutinized as will the date of the conviction, and the applicant/employee’s post-conviction job history.

If you do hire an individual with a criminal record, your liability for the employee’s actions will likely be limited to foreseeable harm that occurs within the scope of employment.  Thus, an employer who hired an inmate under a work release program was not liable when the inmate shot and killed three people on his way back to prison after work.  On the other hand, a painting company who hired a known arsonist, thief and burglar to work in clients’ homes unsupervised was held responsible when he stole credit cards from and burned down a house he was assigned to work on.

Bottom Line: Review your criminal background check practices with a knowledgeable employment attorney to determine whether your program is having a disparate impact on minority applicants and be prepared to justify your use of criminal screening in the employment process.  If you use an outside service to screen applicants, be sure that your procedures comply with the FCRA.

Updated Fair Credit Reporting Act – What Does That Mean For Employers Who Perform Background Checks?

Contributed by Heather Bailey

Not too much.  However, effective July 2011 pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, there is a new sheriff in town and its name is the Consumer Financial Protection Bureau, which will now have the rulemaking and enforcement powers over the FCRA instead of the Federal Trade Commission. 

Effective January 1, 2013, the Bureau implemented an interim FCRA rule.  The good news is, there were no substantive changes in the way employers notify applicants and employees about background checks (i.e., the consent form, pre-adverse action notice, and post-adverse action notices if any such actions are taken).   The only change employers need to worry themselves with is the new “Summary of Your Rights Under the Fair Credit Reporting Act” notice that is given to applicable applicants and employees. The revised notice can be found at http://www.gpo.gov/fdsys/pkg/FR-2012-11-14/pdf/2012-27581.pdf, page 67748 (or page 5 of the actual document).

The only other significant change for employers is they will start receiving a “Notice to Users of Consumer Reports of their Obligations” from their vendors who perform the background checks as this is now required of them.  Be on the look-out for future updates to this existing law by the Consumer Financial Protection Bureau as it does not seem like it is done with its new authority.

If you do background checks on applicants and/or employees for any reason and you do not currently have a system in place for properly getting consent or notifying employees appropriately under the requirements of the FCRA, it is imperative you speak with counsel immediately to institute a practice for compliance.