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Safe Hiring Information

Obtaining and Using Background Information for Applicant Screening

November 07, 2013

1. What Information can a company use?
2. What Are the Major laws that effect information an employer can use?
3. Special issues with obtaining and using criminal records
4. Other Special Issues (Credit reports, date of birth on forms, employment references, workers compensation records, uniformity in the screening process)

1. What Information can a company use?

The California Department of Fair Employment and Housing publishes a pamphlet titled, "Pre-employment Inquiry Guidelines."   The pamphlet reviews what may legally be asked during an interview process or on an application. According to the Department of Fair Employment and Housing:

"It is the employer’s right to establish job-related requirements and to seek the most qualified individuals for the job."

The guidelines go on to state:

"The California Fair Employment and Housing Act prohibits any non-job related inquiry, either verbal or thorough the use of an application form, which directly or indirectly limits a person’s employment opportunities because of race, color, religion, national origin, ancestry, medical condition, disability (including AIDS), marital status, sex (including pregnancy), age (40+), exercise of family care leave for leave for an employee’s own serious health condition. The regulations of the Fair Employment and Housing Commission defines this to include any question which:

-Identifies a person on a basis covered by the Act, or

-Results in the disproportionate screening out of members of a protected group, or

-Is not a valid predictor (not a job related inquiry) of successful job performance."

Basically, an employer is allowed to obtain from public records, schools, licensing authorities, former employers, references, or credit agencies whatever information an employer could legally ask during an interview, provided that the information is not legally regulated, does not discriminate or tends to screen out certain groups. Although there are a number of laws that limit, prohibit or regulate the obtaining and using of background information, there is a great deal of information an employer is entitled to obtain and use in making hiring decisions.

Although all citizens have a reasonable expectation of privacy and a right to be treated fairly, an employer has the right to make diligent and reasonable job related inquiry into a person’s background, so that the company, it’s employees and the public is not placed at risk.

At ESR, our legal staff ensures that our procedures are in compliance with applicable state and federal regulations. Although ESR does not give legal advice to its clients, ESR will only provide information that we are legally permitted to give you. If a company has any specific legal questions, or needs legal advice on how information can be used as to a specific applicant, the company should consult its own lawyer.

PLEASE NOTE:  Various rules and regulations are referenced in this report concerning particular types of information commonly used for background screenings.   This information in NOT intended to be legal advice, and should not be taken as legal advice,  It is only a discussion of commonly accepted human resources practices and understandings concerning the use and limitations of background screening information drawn from a number of industry sources.  Nor is the discussion in this report by any means meant to be a complete review of all aspects of pre-employment screening.  The purpose is to highlight some important areas.  If a company has a questions concerning the use of information in a specific situation, or has any other legal questions about the meaning or application of any laws or any other legal question, the company should contact it own attorney or legal department. 

2. What Are the Major Laws That Affect Information an Employer may have?

The following is a brief reference to some of the important laws that effect pre-employment screening. This is by no means an exhaustive list or a detailed explanation.

Fair Credit Reporting Act (FCRA) --This federal law, amended effective October 1997, regulates the obtaining and using of information that affects consumer. It controls what can go into a consumer report, and the rights of consumers. ESR has included with its information a summary of the law prepared by the Federal Trade Commission entitled, "Notice to Users of Consumer reports: Obligations of Users under the FCRA." The following should be noted when engaging in Pre-Screening by using a consumer report for employment purposes:

1.  A background screening can only be used for a legitimate purposes, such s employment, and not in violation of any state or federal equal opportunity law;

2. For use in employment decisions, the employer must make a conspicuous disclosure in a document that consists solely of the disclosure that a consumer report may be obtained and certain employee rights;

3. The employer must certify that if any adverse action is intended against an applicant based upon anything in the consumer report, a copy of the report and a statement of the consumer‘s rights must be provided to the consumer. If an adverse action is actually taken, then a notice must be sent to the applicant;

4. Where the employer plans to do reference checking or ask questions of previous employers about an applicant’s character, reputation or other matters, the consumer must also be notified that an "investigative consumer report" is being prepared.

5. The information may not be disclosed to anyone who does not have a reason to receive the information for hiring purposes.

At ESR, we assist with handling all of these requirements as part of our service. We provide forms needed to obtain background information. In the event an employer intends to deny employment based in whole or in part upon the information provided, the employer simply needs to contact ESR and we will take care of the notice requirements, and provide the report and statement of rights. After that, if the applicant disputes any of the information, we will make a timely investigation at no charge, and notify the employer of our findings. This law makes it fair to everyone. If there is inaccurate or disputed information contained in public records, the applicant has the opportunity to correct it, and the employer can then reconsider the applicant with the corrected information.

Americans with Disabilities Act (ADA)--This federal law regulates hiring of Americans with disabilities and has broad implications. In terms of background screenings, an employer may not use or obtain any information that violates the rights afforded under this law. The most obvious impact of the law relates to medical records, disabilities and worker’s compensation records that are discussed in more detail under specific services that ESR provides. ESR does not provide any records relating to medical conditions or disabilities. ESR can provide worker compensation records, but only under the strict procedures mandated by the Americans with Disabilities Act.

Federal and State anti-discrimination requirements--A number of federal and state laws make it illegal to discriminate in hiring. These include restrictions as race, color, national origin, religion, ancestry, medical condition, age, marital status, sex, or exercise of family care or medical leaves. Regulations and rulings from federal and state agencies and courts supplement these laws as well. At ESR, we carefully monitor our reports to ensure that no information is given to an employer that violates these various rules.

To assist our clients, we provide a copy of a publication by the California Department of Fair Employment and Housing entitled, "Pre-Employment Inquiry Guidelines." This reviews questions that an employer can and cannot ask.

Where the situation becomes more complicated is where information that appears neutral on its face is utilized in a discriminatory way. For example, credit reports and criminal records are perfectly legal for employers to obtain (provided they comply with various state and federal rules). However, there have been rulings that the use of credit reports or criminal records can tend to discriminate against certain groups. The generally accepted limitations to the use of certain types of information are discussed under each individual item. However, if your company has any questions, your legal department or employment lawyer should be contacted.

California State Laws Regulating Consumer Reports--California has two of its own laws governing consumer reports, which includes credit reports. These are the California Consumer Credit Reporting Agencies Act, and the California Investigative Consumer Agencies Act. AS a result of legislation passed by California in 2002, screening in California must be done under a separate set of rules.  forms and procedures utilized in the other 49 states are not applicable in California.  For more information about California specific compliance, see the ESR article, "Only in California."  

3. Special Issues With Obtaining And Using Criminal Record

There are several special issues concerning obtaining and using criminal records. For most employers, information about criminal records is an important concern. There are a number of cases where an employer has been hit hard for negligent hiring, when an employee with a criminal record has harmed other employees or the public.

First, contrary to popular belief, there is no national computer of criminal records available to private employers. Although the FBI and state law enforcement has access to a national computer database, it is absolutely illegal for a private company to obtain criminal information from law enforcement computer databases. (The exception are firms that are licensed by either the state or federal government, and where a fingerprint check is required by law, such as school teachers, or child care workers.  In California, when a fingerprint check is required, it is done by "Livescan."  However, the vast majority of private employers do not have access to Livescan.)

Instead, private companies must obtain criminal records on a county by county basis at the actual courthouse. There are a number of states that have statewide criminal databases (not including California), but the statewide requests often take too long for the hiring process and require burdensome paperwork.

An experienced screening company such as ESR has the ability to have public record researchers go to any courthouse in the United States to research whether a particular applicant has a criminal record. ESR generally needs the person’s social security number and birth date, as well as any other or previous names the person may have used

Obviously, researchers cannot go to every courthouse in the country for every person, since there are over 3,000 jurisdictions. However, depending upon the company’s needs, ESR will send researchers to those counties that should be checked. As a minimum, ESR recommends that an employer check the county of residence and current employment, if different.

For the best protection, ESR recommends that an employer search each county where a person has lived worked or studied for the past seven years. The seven years is recommended, since many states have seven year limitations.  In the absence of a workable national rule, a seven year search balances legal protection for the employer with a reasonable search period.  Going back further without specific need, could also potentially violate EEOC rules that caution employers to take into account the age of a criminal offense before utilizing an offense to deny employment.

Where the employer seeks the full seven-year search, ESR will look in every jurisdiction it can locate, based upon the application, driving record, social security or credit report, and employment verifications. It should be noted that a screening firm is selecting jurisdictions to search using one of two methods.  Some employers will actually designate the counties ESR is to search For those applicants where the employer is requesting ESR to select counties, the selection is based upon materials provided to ESR, such as a social security trace or past addresses in an application.  ESR then utilizes information from the US Post Office to match cities and zip codes to certain jurisdictions.  However, a screening firm cannot independently investigate everywhere a person has lived.  Employers need to understand that it is always possible that a criminal mater cold be missed if the materials provided to ESR do not point to a particular county. 

Because the record searches normally take place at the actual courthouse, it can take up to two full days after the order is placed to obtain a report. In many jurisdictions, older records have been placed in storage. Where there is a possible match, additional time is sometime needed to have the local county clerk pull the records from storage. ESR has no control over that.

Another complicating factor is that most counties have separate records for felonies and misdemeanors. Generally, felonies are the more serious crime that carries a greater potential punishment. However, most employers will also want to know about misdemeanor convictions as well. This can also include serious problems, such as assaults, threats, weapon charges, drug or alcohol possession, or crimes involving theft and honesty. Most employers want BOTH felonies and misdemeanors checked in all jurisdictions. It is the policy of ESR to check both at the central courthouse.  In some instances, there will be separate lower courts for lesser charges that may not come back.. Some counties charge an extra fee for providing copies of certain records, as well. It should also be noted that searches are conducted in the Central Court only.  Some jurisdictions have outlaying courts, such a Justice of the Peace Courts.  It is simply not possible to send researchers to every small local courthouse that may house less serious matters. 

There are other limitations to a criminal record search. First, only records of convictions or pending cases can be obtained. An employer may not ask about or receive information about arrests or detentions that did not result in conviction. Second, an employer may not receive information on certain cases that have been sealed, a pardon granted or where the applicant received "diversion," which is a special procedure that does not count as a conviction.

Finally, it can be a form of discrimination to automatically bar employment to a person solely because of a criminal record. The reason is that the use of criminal records may unfairly result in the disproportionate screening out of certain groups. However, an employer can deny employment if there is a sound business reason. The employer should take into account the nature of the job and the scope of the duties, as well as factors about the applicant such as age and time of the offense, seriousness and nature of the violation, and efforts made at rehabilitation.

Employers should also be aware that criminal searches are not perfect since they are conducted by human beings, and such are subject o human errors Court researchers conduct searches at he courthouse by entering names into computers, or by reviewing manually large lists of names on a computer or in some other format.  It is always possible that a researcher can inadvertently miss a name.  If a county requires that a search be conducted by the court clerk, then the screening firm is dependent upon the court clerk conducting the search, also using some manual procedures.  For those reasons, ESR recommends that an employer not rely entirely upon criminal record searches , but also pay close attention to their application, interview an reference checking process as well, as explained in otter ESR Reports. 

4. Other Special Issues in Pre-Screening

1. Credit Reports: At ESR, the practice of automatically obtaining credit reports for every job applicant regardless of position is discouraged. It has been held that such a policy may have the effect of disproportionately screening out members of certain groups who may have bad credit. This is especially a concern if a credit report is not reasonably relevant to job function. Obviously, where an applicant has access to cash or assets, or must exercise financial discretion, credit reports can be useful. It can be a gage as to how well a person can handle financial responsibility. An employer may also reasonably be concerned that a person who has excessive debts could be a security risk if they have access to cash or assets. However, when the position to be filled is entry level, and the applicants are young people, and there is supervision in the work place, there may be little need for a credit report. In that situation, a social security/identity check will normally suffice. Much more information about credit reports, including new state limitations and EEOC implications are available on the ESR blog at:  http://www.esrcheck.com/wordpress/

2. Date of Birth information on screening application: Special problems are faced concerning  an applicant’s date of birth when obtained and used for screening. Federal and State laws prohibit employment discrimination on the basis of age for persons over 40 years old. Many states have rules that prohibit an employer, either directly or through an agent, from seeking or receiving information that reveals date of birth and age before an offer is made. See for example the California Pre-employment Inquiry Guidelines by the California Department of Fair Employment and Housing (DFEH).  Most authorities agree that any information tending to reveal age should not be requested on an application form or during an oral interview.  Asking for date of birth during  the selection process could violate the law by tending to deter older applicants from even applying.

On the other hand, without a date of birth, it is very difficult to perform applicant pre-screening.  When researching court records, date of birth is probably the   most important factor needed to identify an individual.  Many court records do not contain social security numbers.  In fact, in  some jurisdictions, a criminal search cannot be conducted without a date of birth.  It is also needed in many states in order to obtain a driving record. 

Under the federal Age Discrimination Act of 1967, there is not an absolute prohibition against asking  for date of birth or age.  That is a common misconception among employers.  In fact, the EEOC has specifically ruled that asking for date of birth or age is not automatically a violation of the act.  However, the EEOC ruling indicated that any such request would be closely  scrutinized to ensure  that  it is for a permissible purpose.  The  EEOC also indicated that the reason  for asking for date of birth should be clearly disclosed so that older applicants are not deterred from applying.  (See 29 Code of Federal Regulations Part 1625.)

 

In order to comply with the law, and at the same time to allow an employer to conduct a pre-employment  screening, employers may consider the following steps:

1.  Applicants are assured on the ESR Release form that the information on the release form is for screening and verification of information only, and has no role in the selection process.
2.  An  applicant is also assured on the release form that all federal and state rights are respected in our screening process.
3.  We recommend that our clients  keep the screening forms and the reports separate from the employee’s personnel file or application papers, so that there can be no inference that age played any factor in any employment decisions. Furthermore, the applicant release forms should not be made available to the person or persons with hiring authority, so there is no suggestion any information was used in hiring.
4.  The ESR form clearly indicates the information is used for identification only and makes the process go faster.
5.  The  request for date  of birth information is on the  ESR form, not the employer's form.  If an employer is sensitive about the date of birth issue, and employer can even keep the forms physically separated, so that anyone involved in selection will not see the date of birth information on the ESR forms.   This eliminates the possibility of any applicant being the victim of discrimination in the selection process based upon someone having access to their age. 

6.  For maximum protection, ESR recommends that firms consider performing all screening and obtaining information post-offer.

7.  ESR takes steps to remove all references to age and date of birth in its reports, so that employers will not receive such information.

8.  If an employer determines that they do not want to request date of birth even in the screening firm's paperwork, ESR will work with the employer to accommodate that procedure,.  However, an employer needs to understand that when a screening firm obtains date of birth for r identification purposes that there can be a delay and increased costs.  ESR can review that with each employer. 

There are other options that can be considered as well, depending up the state the employer is located.  However, if an employer has any questions, they should consult their own legal counsel.  ESR will work with employers to accommodate a process of obtaining date of birth in a way that is consistent with federal and state laws. ESR is not offering any legal advice on this issue.  In order to ensure legal compliance, employers are urged to seek advice from their attorneys, or to contact their local, state or federal EEO office. 

3. Reference for former Employee: Another recurring problem is giving or obtaining references for former employees. Many attorneys advise their clients to keep such references to the basics, such as employment dates, and job title, even though many states, such as California, have passed laws giving employers protection. This whole area creates difficulties. At ESR, when a client requests an in-depth reference from a former employer, we will attempt to interview the supervisor in detail if that information is on the employment application. If company policy prohibits such detailed interviews, or if we are unable to locate the supervisor, ESR will then contact Human Resources of Personnel to verify basic employment information.  Please see the   detailed ESR report on Employment References at under ESR Publications at www.ESRcheck.com .

4. Worker Compensation Records: There are special procedures to obtain worker compensation records under both the Americans with Disabilities Act and California law. Essentially, the records may only be obtained after a conditional offer of employment has been extended. There are also limitations on the use of the records.   Different states have different rules.  For example, in California, an employer needs to obtain authorization from the state to receive these reports. ESR will assist in obtaining the authorization. However, to ensure legal compliance, a company should contact its legal department or employment lawyer before seeking these records.

5. Administering Screening Programs Uniformly--Another important consideration in administering a screening program is that once a decision is made to screen for a particular position, ALL candidates being considered for that position should be screened. Selective screenings could raise an inference of a discriminatory practice, particularly if the subject is a member of a legally protected group. Furthermore, all individuals who are screened should also be evaluated using the same criteria.

(c)1998-2008 by Lester S. Rosen; All rights reserved. May not be reprinted or published in whole or in  part with out authorization.

Certified with the National Association of Professional Background Screeners ESR's SOC 2 Audit Report confirms it meets high standards set by the American Institute of Certified Public Accountants (AICPA) for protecting customer information PCI-DDS Compliance Privacy Shield Framework Services Perfromed in the USA Safe Hiring Manual Founding Member of the National Association of Professional Background Screeners