PART ONE: Background Check Expert Answers FAQs from Staffing Professionals

Employment Screening Resources® (ESR) Founder and CEO Attorney Lester Rosen
Employment Screening Resources® (ESR) Founder and CEO Attorney Lester Rosen

Written By ESR News Blog Editor Thomas Ahearn

This blog is the first of a two-part series. Click here for Part Two.

Attorney Lester Rosen, founder and chief executive officer (CEO) of leading global background check firm Employment Screening Resources® (ESR), answered some frequently asked questions (FAQs) from staffing professionals following a webinar he presented that was sponsored by the American Staffing Association (ASA).

Earlier this year, Rosen – the author of “The Safe Hiring Manual” – presented a webinar titled “An In-Depth Conversation on Background Check Compliance” to discuss the issues that all staffing firms need to be concerned with regarding background checks.  Below are some of the FAQs and Rosen’s answers.

(NOTE: As with all information presented on the ESR News Blog, this information is provided for general educational purposes only, and is not given as or intended as legal advice of any kind or nature. For answers to specific issues that impact a company, the best approach is to consult with an attorney.)

QUESTION: Who should provide the adverse action notices? We run the background check for the client. However, the decision to hire or not is the client’s decision.  If they do not move forward, should we send adverse notices because we ran the check on the applicant, or should the client be responsible?

ANSWER: Adverse action is a “delegable duty,” meaning it is the employer’s duty but can be delegated to the screening firm.  That is why it is critical to have a clear understanding as to what the staffing firm wants the screening firm to do.  A screening firm cannot on their own do an adverse action since the screening firm is not involved in making hiring decisions.  A pre- and post-adverse action is only sent upon the specific instructions of the business that is ordering the report.  Most screening firms now have tools that automate the adverse action process, so employers can go online an initiate both the pre- and post-letters themselves.  These should also be a notice of “individualized assessment” under the U.S. Equal Employment Opportunity Commission (EEOC) Guidance if a criminal record is involved.  The better practice is to make that a separate letter. Where the staffing professional is doing the background check on behalf of the client, the staffing firm may well have the obligation to perform the pre and post adverse action notices. In other words, if the staffing firm is working directly with the screening firm, it would arguably be the staffing firm that has the obligation to ensure compliance with the notice requirements.

QUESTION:  Can the employer impose a specific guideline for allowable felonies/misdemeanors based on time and offense?

ANSWER: An employer’s criteria when it comes to the use of criminal records to hire or to accept temporary workers is a matter that can have an impact on staffing professionals.  How these issues are dealt with depends on the staffing firm’s arrangement with the employer.  The two most typical scenarios where background checks can get complicated for staffing firms are:

  • The staffing firm is recruiting for the client who will hire the person, but the staffing firm also does the background check.
  • The staffing firm is the employer and paying the worker and is placing a worker on a temporary assignment, but the client has its own guidelines and the staffing firm cannot place anyone who fails to meet those guidelines.

Generally, with only limited exceptions such as a governmental requirement, an employer should NOT use guidelines that automatically exclude someone from employment over a criminal record.  The better practice is to escalate those criminal matters that are of potential concern and subject them to the three-part test (nature and gravity of the act, nature of the crime, and age of the crime) to determine if the criminal matter impacts the job or creates an unacceptable hiring risk.  This is called a “targeted screen,” and sometimes referred to as the “Green factors” after a federal case. Employers may use guidelines in order to “red flag” offenses that need to be considered more carefully but should not automatically reject someone.  Even if the applicant is rejected, under the EEOC Guidance of 2012 it is recommended employers give a rejected applicant an opportunity for an “individualized assessment” where the applicant is given an additional opportunity to discuss the offense, or reasons they should be hired.  In some states, such as California, that is now required under state law. In addition, under the EEOC Guidance of 2012, employers should provide an opportunity for an “individualized assessment.”

Where staffing professionals can be tripped up is if they are asked to enforce strict guidelines on the employer’s behalf.  There needs to be clarity about who does what in terms of decision making and providing notices.  Ideally, the staffing firm that is placing workers who the client will employ is merely fulfilling a clerical type function in applying the employer’s criteria.  However, if there is a lawsuit, it may end up involving the staffing firm.  That is why it’s important for staffing firms to educate employers about the legal use of criminal records.

Where it gets more complicated is when the staffing firm is the actual employer, but the client has certain criteria concerning criminal records and will accept certain applicants.  The staffing firm is somewhat caught in the middle.  It cannot place the applicant if the client refuses the placement.  However, it must follow federal and state laws regarding criminal records.  The best steps may be to:

  • Educate the employer about the EEOC rules on criminal records, as well as any Ban the Box and Fair Chance Hiring Laws.
  • If the client will not accept the applicant, the applicant arguably has rights under the federal Fair Credit Reporting Act (FCRA) for adverse action notices and an individualized assessment.  That is because the worker lost an opportunity. 
  • A staffing firm can request indemnification in the event a temporary worker is rejected, and legal action follows.
  • Some staffing firms take the position that if the temporary worker does not meet the qualifications for a particular assignment that the staffing firm will move on to other assignments.  However, that approach potentially carries risk.

Unfortunately, there is no clear controlling national case law on point, so a staffing firm in this situation may want to consult with their attorney to make sure they are not taking unnecessary risks taking into account their own state law. 

QUESTION:  Regarding “Ban the Box” – If a company tells the agency that they have a policy of not hiring anyone with a felony conviction because they work with government vendors, is that acceptable without fear of a lawsuit?

ANSWER: The answer is – It depends.  If there is a bona fide occupational qualification imposed by the federal government, then the staffing agency knows they are unable to place the worker.  On the other hand, there is now a federal “Ban the Box” law.  It is unclear how this will play out.  One solution is to clearly notify applicants if there are any special job requirements that impact criminal records.  Generally, a notification that a background check will occur is allowed and describing governmental requirements of the job is a track that employers often take. There is an additional layer of complication if the restriction is imposed by state law. Many states restrict professional licenses if a consumer has certain criminal records. However, it has been argued that the EEOC Guidance and Civil Rights laws override state licensing laws, and in fact, the State of Texas filed a lawsuit on that topic. So, the answer is that it gets complicated.

QUESTION:  We do not share background check results with clients so as not to create the appearance of a joint employment relationship.  Does not sharing raise other problems?

ANSWER: The issue of potentially creating “joint employment” is important in order to protect a client and staffing firm from certain claims and exposure.  It typically occurs where the worker is on the staffing firm’s payroll but is working under the control and direction of a third party.  However, if handled right, a background check consent form can be written in such a way to give the client permission to see a background check where the applicant expressly agrees that it does not create an employment relationship.  The key is that under the federal Fair Credit Reporting Act (FCRA), only someone with a permissible purpose can view a report and employment is one of the purposes under the FCRA.  

QUESTION:  Asking on the applications to list any “convictions” but does not simply just ask Yes or No with checkboxes, is that a way to get around Ban the Box?  There would be a note that states listing convictions may not bar them from employment.  Or, for the “Ban the Box” laws, is it illegal to ask on an application, “Do you have any felonies/misdemeanors in the past 7 years?” since that is not a Yes or No question?

ANSWER: The laws that prohibit an early “knockout punch” from obtaining information about past criminal matters are generally broadly written, so the form or manner in which it is asked is not really relevant.  Asking an applicant in any way, either on a form or an interview, about past criminal records too early can be a violation of Ban the Box and Fair Chance hiring laws.  Although the shorthand way to refer to this process is “Ban the Box,” the prohibition is not limited to only applications that have a box. What can be provided is an advisement that states the applicant will be subject to a background check that is appropriate to the job functions and business necessity.

QUESTION:  When applicants first come in to register, we check their public records, such as Sex Offender and state court records.  Is this legal?

ANSWER: Generally, under the FCRA, “do it yourself” background checks that do not involve hiring third party professionals and are limited to accessing public records would not be a violation of the FCRA.  The one technical exception is California, which has a special rule about asking permission to check court records.  However, nothing is that simple:

  • The EEOC would still apply, and the use of such information could be a violation of the EEOC Guidance of 2012 or state law.  Although the EEOC Guidance is not a law, many states have passed Fair Chance laws based on it.
  • California is an example of a state that has a limitation on the use of a sex offender database.  There must be some indication that there is a group at risk where the information is needed. The California limitation on the use of sex offender records in employment became more restrictive on January 1, 2020.
  • If the state court information is incorrect or used incorrectly, an applicant may have some legal recourse.

The best approach is to get legal advice from local counsel to ensure you are in compliance with state laws. 

QUESTION:  How far back can we go on criminal records?

ANSWER: The “look back” period is controlled by both federal and state laws.  Under the FCRA, there is no limitation on how far back an employer can go on a conviction (For an arrest not resulting in a conviction, the limit is seven years).  However, under the EEOC, a look back period could be potentially discriminatory if it is not relevant to the job.  Generally, screening firms go back and search where an applicant has lived or worked for the past seven years.  Where it gets complicated is that a person may have been convicted 12 years ago, but was released five years ago, so that is within the seven years in states whose laws permit this methodology.  However, in some states, the records do not tell when a person was released and, generally, a CRA cannot guess, which adds another layer of complexity.

State laws also may apply and there are at least 11 states with their own version of the FCRA that limit criminal records to seven years, usually depending on salary.  The idea is that the seven-year rule helps a lowered paid person with a record to get a job.  However, there is a strong argument that some of these seven-year rules – such as California, Colorado, and Texas – have been pre-empted by the FCRA, which is a federal law.  The lesson here is to check with your local attorney to make sure you are in compliance.

QUESTION:  What about a background check “automatic fail” if the candidate appears on the sex offender registry?  Thoughts on that?

ANSWER: Any automatic response is always potentially dangerous.  Under the EEOC rules and many state laws, an automatic determination is problematic.  Also, keep in mind that just because a person is on a sex offender list does not mean they are not eligible for any job.  There are a wide range of behaviors that can result in mandatory registration, and there are likely many jobs where there is no individual at risk.  Obviously, if a candidate has a serious sex offense, he or she may not be a good candidate to work in a day care center.  But that is an extreme example.  It is advisable for employers to have policies and procedures that are applied across the board.  Even if a person is a registered sex offender, an employer is well advised to go through the standard process of performing a targeted screen and individualized assessment every time. 

QUESTION:  What is the best practice concerning the review of pending criminal charges, assuming the charge is for a crime that satisfies the “Green” test?  After all, the candidate is innocent until proven guilty, so how is adverse action allowed?

ANSWER:  This is a real grey area for employers.  Although the person has not been convicted, it is pending, and an employer may want to understand the charge and underlying behavior.  Assuming the criminal charge is relevant, many employers take the position that the ability to show up for the job is an essential function of any job and will ask the applicant to clear that matter up first.  Some jurisdictions, like California, differentiate between a pending case and an arrest that did not go anywhere, which underscores that a pending case is something employers can be concerned with.  However, what the employer really needs to understand is the underlying behavior.  That is often hard to determine.  That may be a situation to run by your attorney and handle on a case by case basis.

QUESTION:  What if a candidate divulges during the interview that they have a misdemeanor without us asking?  Can we use that information to disqualify them?

ANSWER:  First, it is very important to make sure that the applicant truly volunteered the information and questions were not asked in such a way that would lead a reasonable person to believe they had to provide the information about past criminal matters.  Assuming it was truly volunteered out of the blue, the basic rules still apply.  Employers need to conduct a targeted screen first to determine if the criminal matter is even relevant and if it’s used adversely against the candidate, there should be a process for an individualized assessment. 

QUESTION:  The general rule is that a background check can only go back seven years.  Sometimes background checks contain “hints” about criminal activity that are older than seven years.  Can we get in trouble for that if the candidate asks for a copy of the report?

ANSWER: A background screening firm operates on the assumption that applicants have the right to see the background report and, in fact, their entire file.  The whole process is done with the applicant’s consent, and the process provides complete transparency.  In other words, there is no such thing as “off the record,” even if it’s oral communication.  Sometime a screening firm will come across information that may seem relevant but, under applicable law, it is not reportable, and the screening firm has a duty not to mention it in any way. 

QUESTION: We run an MSMJ.  Is that the same as a full background check?

ANSWER: “MSMJ” is an abbreviation for a multi-state/multi-jurisdictional (MSMJ) search.  Most screening firms offer such a search.  Some screening firms also call an MSMJ search a “national” criminal record database search.

The short answer is that such a database search is a secondary source only and is NOT a background check by itself.  First, there is NO real “national” criminal search available to private employers. Only the Federal Bureau of Investigation (FBI) has something close to a national database and that requires fingerprints, which means it is generally not available to private employers.  Such a search by itself is NOT the same as a “hands on” background check performed at the country court level.  Although an MSMJ search can be a powerful tool to help a background screening firm obtain more jurisdictions to search for criminal records, employers need to understand that such a search is not at all a real background check all by itself.  These searches are based on available criminal records from multiple sources, and the data can be incomplete, not timely, or inaccurate.  They can contain errors that can affect the outcome of searches that include incomplete records lacking sufficient details about an offense or subject, name variations that cause confusion, and out of date information that may be stale.  Any criminal record “hit” in a database must be confirmed at the county courthouse level. 

Databases can also contain “false negatives,” where a criminal search returns no record when a record actually exists, and “false positives,” where a record is found but does not actually relate to the subject of the search or should not be reported for legal reasons, such as an expungement.  Employers should not develop a false sense of security with databases since there are situations where a criminal record can be missed or reported inaccurately.  To learn more about this subject, read the datasheet from ESR titled “National Criminal Search. Fact or Fiction?” that is available at https://info.esrcheck.com/resources/datasheet/national-criminal-searches-explained.

QUESTION:  Can you recommend a resource that we can share (email and discuss) with our clients to help them be better informed?  A lot of our HR contacts need to be motivated to evaluate and look at what their company is doing.

ANSWER:  There are numerous resources. 

First, resources can be found on the web site for the Professional Background Screening Association (PBSA) – https://thepbsa.org/ – a nonprofit organization that represents the screening industry formerly known as the National Association of Professional Background Screeners (NAPBS).  Another widely used resource is my book, “The Safe Hiring Manual” (3rd Edition/2017), that is available at https://www.esrcheck.com/Tools-Resources/Safe-Hiring-Manual/.

Two other excellent sources are:

  • “Best Practice Standards: The Proper Use of Criminal Records in Hiring” – A group of national civil and workers’ rights organizations released a report in 2013 that addressed the use of criminal records of job applicants by employers during employment background checks. The complete report is available at https://info.esrcheck.com/resources/partner/the-proper-use-of-criminal-records-in-hiring.  
  • “Background Checks: What Employers Need to Know” – A joint publication from the Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) that explains how employers can comply with both federal nondiscrimination laws and the FCRA.  When employers use a background check to make an employment decision, they must comply with federal laws that protect applicants and employees from discrimination enforced by the EEOC.  When employers run background checks through a third-party company, they must comply with the FCRA, which is enforced by FTC.  The report is available at http://www.eeoc.gov/eeoc/publications/background_checks_employers.cfm.

Rosen founded Employment Screening Resources® (ESR) in 1997 in the San Francisco, California-area. He was chairperson of the steering committee that founded the Professional Background Screening Association (PBSA) – a nonprofit trade organization representing the screening industry that was formerly known as the National Association of Professional Background Screeners (NAPBS) – and served as first co-chair.

Employment Screening Resources® (ESR) – a leading global background check firm – provides staffing background screening services specializing in the sourcing, staffing, and recruiting industries that help them find the right staffing candidate by eliminating unqualified and potentially dangerous candidates. To learn more, visit www.esrcheck.com/Background-Checks/Industry-Specific-Solutions/Staffing/.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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