More and more organizations are conducting background checks on applicants and employees. Whether it’s minimizing safety and security risks, increasing protection against fraud and theft, or required by law for your industry, background checks have become an essential tool in the box. employer risk management tools. But a very common practice – the use of standardized disclosure forms from third-party vendors or that have been used by the company for as long as you can remember – can be a source of dangerous legal exposure. What do you need to know about modern legal standards and what should you do to avoid a common legal pitfall?
FCRA requirements have led to standardized practices (potentially problematic)
To get basic reports, many employers go through third-party vendors. These suppliers can be an invaluable asset to employers. Many offer technology platforms to help speed up and streamline recruiting processes. Often times, they can also prepare more comprehensive reports (including school history, credit history, criminal history, reference checks, etc.) and can do more in-depth research than you could get on your own. .
The Federal Fair Credit Reporting Act (FCRA) has traditionally governed the procedures for obtaining these reports. Over the years, many provisions of the FCRA have remained relatively unchanged. (However, check out our article on the highly technical aspects of the FCRA and the case law showing that federal requirements are anything but simple..) As a result, most of the forms used by employers to obtain background checks, such as employee authorization forms, have become quite standardized. Suppliers often provide sample forms as part of their background check kits.
Many organizations simply take these forms and implement them into their new recruiting processes “as is”, assuming they are sufficient to meet their legal obligations. However, the recent expansion and evolution of state and local “Ban the Box” laws and similar criminal background laws have disrupted the practice of using standardized background forms and processes – and you should. require you to review your own practices.
What changed ?
Historically, “Ban the Box” and similar criminal background laws aimed to prohibit employers from asking questions about criminal history in job applications. However, criminal history laws have expanded and evolved over the past few years to not only prohibit criminal background investigations on job applications, but also to dictate procedures to be followed before an employer can. assess an ineligible candidate for a job. As a result, these laws are now often referred to as “fair chance” laws.
Before illustrating examples of these state and local laws, it is worth briefly reviewing the general FCRA requirements that employers must meet once they have obtained a report (note that there are additional requirements that must be observed before obtaining a report). Under the FCRA, employers who intend to take adverse employment action against individuals based on a background check report must, prior to taking the adverse action, notify the candidate of their intention to do so, as well as a copy of the person’s report and a summary of their rights under the FCRA. This is commonly referred to as a “notice of prior adverse action”.
Employers must then allow employees a reasonable time to review the report and identify inaccuracies or submit additional information for review, before the employer takes action. Upon the expiration of a reasonable time and assuming no inaccuracies have been identified, the employer can generally proceed with the adverse action by issuing a subsequent notice of adverse action, advising the person of the action taken.
However, under expanding state and local laws, cities like Los Angeles and New York now require employers to conduct individualized written criminal background assessments and provide those written assessments to applicants with their notice of termination. adverse action. Jurisdictions like Portland, Oregon and Montgomery County, Maryland require employers to notify individuals of the specific conviction (s) excluding them from employment, rather than simply attaching a copy of the report to the notice of employment. injurious action. In addition, jurisdictions like San Francisco and Philadelphia have legislated specific lengths of time that must be allowed between the issuance of a prior action and a negative action notice. As a result, FCRA’s one-size-fits-all forms and procedures are often no longer sufficient to meet a growing mosaic of national and local requirements.
It’s also worth noting that some jurisdictions have implemented their own fair credit scoring laws requiring their own language and additional forms, and many jurisdictions have general criminal history limitations in place. These include limitations on the types of criminal convictions that may be the basis for adverse action; identify the factors that should be taken into account in conducting individualized assessments; and specifying other limitations on background check reports (such as bans and limitations on credit history reports).
What should you do
You should carefully review your background check forms and processes before implementing them to ensure that they comply with not only federal requirements but also state and local considerations. Given the network of criminal history laws involved, you are further encouraged to seek the advice and assistance of a legal advisor to review these forms and procedures, in order to avoid the complex lawsuits that may arise from using outdated forms. and / or generics.