US Women Magazine August 2014 Vol 1 Issue 1 | Page 38
Human Resources
Important Facts abou
Improper Administratio
Your Compa
Companies conduct background checks of applicants, and
at times existing employees, for a variety of reasons including, the desire to:
•
Avoid exposure to negligent hiring/retention lawsuits;
•
Increase the security of the company’s assets and
employees;
•
Reduce liability from inconsistent hiring or screening practices;
•
Proactively reduce the risk of employee-related
loss; and
•
Mitigate the likelihood of an adverse incident occurring on company property that could jeopardize customer or employee confidence.
However, many employers do not realize their background
check policies and processes may actually subject them
to increased liability. Background checks are subject to
close scrutiny by both the Equal Employment Opportunity
Commission (EEOC) and the Federal Trade Commission
(FTC). If your company uses a third party private company
to perform background checks on prospective or existing
employees, this is considered a consumer report governed
by the Fair Credit Reporting Act (FCRA).
The FCRA provides for the recovery of statutory damages
of $100 to $1,000 per violation from employers who fail to
comply with the processes discussed below in conducting
a background check. The FCRA also allows prevailing parties to seek punitive damages and recover their attorneys’
fees. Attorneys are increasingly bringing class action suits
against employers for violations of the FCRA. Likewise, the
EEOC has filed actions in federal court seeking damages
for violation of Title VII of the Civil Rights Act of 1964
against employers, alleging the employer’s background
check policies have a discriminatory effect on minorities
and/or male applicants.
Recent EEOC and FTC Guidance
The EEOC and the FTC recently published guidance about
how the laws administered by these agencies apply to employment background checks. The EEOC believes an employer’s unfettered use of criminal background checks causes
a disparate impact to minorities applying for employment.
In accordance with this guidance, the EEOC urges employers not to make an inquiry about applicants’ criminal
backgrounds until after the decision has been made to offer
employment. Once that decision has been made, the employer may, in certain circumstances, condition an applicant’s
employment on successfully passing a background check.
If your company’s employment application still requires applicants to disclose whether or not they have been convicted
of a criminal offense, include disclaimer language that makes
it clear that a past criminal conviction will not automatically disqualify an applicant’s employment. If your company
routinely performs criminal background checks of job applicants, it is wise to have a written policy governing those
checks. The policy should include a list of factors the company may consider in determining the \X