By Thomas Ahearn, Employment Screening Resources (ESR) News Editor
An article in the February 2011 issue of the Society for Human Resource Management’s (SHRM) HR Magazine – ‘Close Up On Screening’ – describes how employers are scrambling to adjust to changes in the myriad of state and federal laws that govern pre-employment background screening due to increased scrutiny by legislators and policy enforcers on the use of credit reports and criminal records in hiring decisions.
For examples, Illinois recently became the fourth state — after Hawaii, Oregon, and Washington — to restrict the use of credit histories in hiring decisions, while Massachusetts became the second state, in addition to Hawaii, to prohibit private employers from asking about criminal records of job applicants on initial written job applications.
However, contrary to public opinion, a 2010 survey from SHRM – ‘Conducting Credit Background Checks’ – showed credit histories were used sparingly and wisely in hiring decisions.
“The perception that employers are ordering massive amounts of credit reports is nothing like the truth,” said Lester Rosen, President of San Francisco-area background check provider Employment Screening Resources (ESR), who was quoted in the HR Magazine article.
According to the SHRM survey on credit background checks, when respondents were asked if their organization or an agency hired by their organization conducted credit background checks for any job candidates by reviewing their credit reports:
- 47 percent responded they performed credit background checks on selected job candidates.
- 40 percent responded they did not perform credit background checks on any job candidates.
- 13 percent responded they performed credit background checks on all job candidates.
Regarding which categories of job candidates that organizations conducted credit background checks on, the SHRM survey revealed that 91 percent of “job candidates for positions with fiduciary and financial responsibility” underwent credit background checks.
As for restrictions on criminal records, the SHRM article indicates at least two dozen cities and counties and five states have narrowed questions on their job applications to cover only felony convictions or have stopped asking about criminal history entirely and have “banned the box,” a reference to removing the boxes on applications that job applicants must check if they have even been convicted of a crime.
“With ‘ban the box’, applicants can be considered without pre-judging,” said Rosen, the author of ‘The Safe Hiring Manual – The Complete Guide to Keeping Criminals, Terrorists, and Imposters Out of Your Workplace,’ a comprehensive guide to background checks. “From a government point of view, it makes sense to get people back to work and to avoid the extra costs of social services. Private employers prefer to ask upfront.”
Furthermore, while employers conduct criminal background checks to guarantee safety in the workplace and to avoid negligent hiring lawsuits, they may attract attention from the U.S. Equal Employment Opportunity Commission (EEOC) if they are not careful in doing so. The article noted that while procedural consistency is important throughout an organization, criteria consistency is important within job groups.
“Not all janitors are background screened the way you screen accountants, but janitors should be screened consistently with janitors,” Rosen explained in the article. “Employers get in trouble when they engage in automated decision-making. There always should be a human review to make sure you’re making the right decision.”
Rosen added that while many employers know the Fair Credit Reporting Act (FCRA) contains procedures for conducting credit background checks, some are unaware the FCRA also covers criminal background checks and offers specific “adverse action” procedures an employer must follow if a background check results in a denial of employment for a job applicant.
As a result, many employers are turning to an outsourced background screening and safe hiring partner to establish protocols and consistent practices while also helping to eliminate inappropriate use of screening results.
“A good background-screening partner makes sure the employer is in compliance with the act and other laws, abides by adverse action rules, conducts consistent checks within job groups, and follows EEOC guidelines for using criminal reports,” Rosen said.
To learn more about background checks, visit the Employment Screening Resources (ESR) website at http://www.ESRcheck.com and read more about ‘credit reports’ and ‘criminal records’ on the ESR News Blog.
Founded in 1996 in the San Francisco area, Employment Screening Resources (ESR) wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen and is accredited by The National Association of Professional Background Screeners (NAPBS®) . To learn more about Employment Screening Resources, visit http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations, at 415.898.0044 or jcallahan@ESRcheck.com.