Top 10 Employment Background Check Issues

Nick Fishman

I think we’ve been fairly consistent with our message concerning the state of employment background checks in 2011.  There are many laws that govern their use and in truth, they’ve been around for quite some time.  However, we are seeing more and more legislation in this regard.

Labor and employment attorneys Dani Sanchez-Gleason at BMC Software Inc. and Richard Greenberg at Jackson Lewis recently published a must-read article about the top laws that employers need to know about background checks. I picked out a few highlights below but definitely encourage you to read their entire article, ” Top 10 State Background Issues”.

Compliance with State-Mandated Background Checks

Some industries, such as health care and education, often are required by state law to conduct specific background checks on industry employees.   In some instances, these checks can be conducted by a consumer reporting agency; in other circumstances, these checks need to be conducted by a state agency with access to the FBI or a similar database (in the case of criminal checks).   Employers must ensure compliance with such requirements.   There is not a level of consistency across the states as to these requirements, so a state-specific analysis is necessary.  For example, in some states but not others, an employer is required to conduct specified background checks on any individual who will be entering a home to provide service, such as a repair technician.

Compliance with State Background Check Procedural Requirements

Often, in developing compliant processes for background checks conducted through consumer reporting agencies, employers only consider the federal Fair Credit Reporting Act.  However, there are approximately a dozen states which have promulgated state mini Fair Credit Reporting Acts.  These mini-FCRA laws often track the FCRA’s consent and disclosure, pre-adverse action and adverse action requirements.   However, in certain instances, additional disclosure and/or language is required.  For example, California law requires an employer to disclose the specific checks being conducted as well as to provide information regarding the individual’s right to inspect the file maintained by the consumer reporting agency.  Other states like Minnesota and Oklahoma mandate that employers notify individuals of their right to obtain a copy of a report in all circumstances.  Further, in New York, depending on the scope of the check, a disclosure of the state’s limitations on use of criminal record information may be required.

Understand Reporting Limitations Imposed on CRA’s by State Laws

To avoid frustration, it is vital that all employers understand the limitations imposed on consumer reporting agencies by applicable state law.  Under the FCRA, a consumer reporting agency is not limited from reporting any convictions, but is generally limited to reporting other adverse information that is more than seven years old unless the individual’s compensation would be in excess of $75,000 per annum.   However, some state laws restrict reporting of convictions over seven years old unless certain salary thresholds are satisfied.  For example, in New York, criminal conviction information over seven years old may not be reported unless the individual is expected to earn over $25,000 per year.  Further, some state laws prohibit reporting of any arrest information and/or information regarding pending arrests.  While there is an argument that some of these reporting limitations are preempted by the FCRA, the available caselaw on this issue is limited.  These limitations reiterate the importance of a broad inquiry on the employment application regarding criminal history.

Follow State Limitations on Use of Convictions for Disqualification

While federal law does not impose any per se prohibitions on an employer’s ability to make job-related decisions based on an applicant’s or employee’s criminal conviction history, certain state laws impose such restrictions.  A handful of states specifically prohibit an employer from disqualifying an applicant/employee unless the conviction is job-related based on an individualized analysis.  In fact, New York imposes the strictest standard and requires an employer to consider numerous factors prior to making a disqualification decision, including the length of time since the offense and the individual’s rehabilitation.  Simply put, in New York, absent a conversation with the individual prior to disqualifying, there is a strong argument that the employer has not complied with the statute.  Again, industry requirements must be considered.  For example, in many states, alcohol beverage control law restrictions often require employers to disqualify applicants/employees with certain convictions from positions in which the establishment maintains a liquor license.

Of course, due to the EEOC’s focus on the adverse impact of employers’ use of information regarding criminal history, it is strongly recommended that all decisions be made based on an individualized, job-related analysis and that employer policies do not contain per se disqualification standards.

Analyze the Propriety of Internet Checks

Employers are increasingly turning to social media for information about job applicants. So long as the employer does not violate state or federal discrimination laws, nothing currently prohibits an employment decision based on information an applicant places in the public domain.  Nevertheless, employers should balance the need to obtain information against the risks associated with such searches.  Federal and/or state laws prohibit employers from basing employment decision in whole or in part on protected characteristics, such as race, age, sexual orientation, marital status, disability, genetic information sexual orientation and political affiliation.  Employers also should avoid circumventing a potential employee’s privacy settings by pretending to be someone else in order to gain access to a restricted network. A best practice is to obtain consent or at least disclose to individuals such checks are conducted.

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Nick Fishman
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Nick Fishman

Nick Fishman is the co-founder of EmployeeScreenIQ, a leading, global employment background screening provider, and serves as the company’s executive vice president and chief marketing officer. He pioneered the creation of EmployeeScreen University, the #1 educational resource on employment background checks for human resources, security and risk management professionals. A recognized industry expert, Nick is a frequent author, presenter and contributor to the news media. Nick is also a licensed private investigator in the states of Ohio and Texas.
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  • Vicky

    Well, yes, trust in employees has dropped because of a lot of factors, so most employers nowadays will do themselves some searches on you, be it only on social websites like Facebook and other similar. But some are actually hiring private investigators to do professional background check n.y. on their potential employees before actually hiring them. Most interviewees aren’t honest about their past and employers do no like that.

  • Tracy

    Can future employers request tax documents during a background check?

    • Nick Fishman

      Yes. Employers will commonly ask for 1099’s as proof of salary (and employment).