On March 10, 2014, the Federal Trade Commission ("FTC") and the Equal Employment Opportunity Commission ("EEOC") jointly issued two short guides on the use of background checks in hiring and personnel decisions. Generally speaking, these guides do not break new ground, but serve more as reminders to employers of their existing obligations under federal law when inquiring into or otherwise considering an applicant's or employee's background information.
Within the last few years, both the EEOC and FTC have faced challenges to their traditional roles of monitoring employment-related background checks and enforcing applicable laws. Indeed, several months ago the EEOC waged an unsuccessful court challenge to an employer's background check policy (EEOC v. Freeman, RWT 09cv2573, 2013 WL 4464553 (D. Md. Aug. 9, 2013)). Moreover, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the FTC has seen its rulemaking authority under FCRA shift to the new Consumer Financial Protection Bureau.
Nevertheless, these brochures indicate that the EEOC and FTC have a continued interest in policing employer background checks. Given this sustained scrutiny, employers should review the new guides and make sure that their practices and policies are in compliance with federal law. Employers also should remember that there are a host of other state and local requirements that may be applicable to running a background check and taking an adverse action based on the results.
Complying with the Fair Credit Reporting Act, conducting credit background checks and running a criminal check to avoid negligent-hiring lawsuits. Employers and HR professionals should make it their policy never to hire a candidate without an employment background check. Your organization could be held liable for “negligent hiring” or “failure to warn” should an employee turn violent on the job.
When conducting a job background check,make sure you comply with the Fair Credit Reporting Act, which regulates not only credit background checks but also checking criminal records and driving records.
Employment Background Check Guidelines shows you how to properly conduct reference/background checks, select third-party background firms and why screening candidates online on social networking sites is legally risky business.
A joint publication of the Equal Employment Opportunity Commission and the Federal Trade Commission
When making personnel decisions — including hiring, retention, promotion, and reassignment — employers sometimes want to consider the backgrounds of applicants and employees. For example, some employers might try to find out about the person’s work history, education, criminal record, financial history, medical history, or use of social media. Except for certain restrictions related to medical and genetic information (see below), it’s not illegal for an employer to ask questions about an applicant’s or employee’s background, or to require a background check.
However, any time you use an applicant’s or employee’s background information to make an employment decision, regardless of how you got the information, you must comply with federal laws that protect applicants and employees from discrimination. That includes discrimination based on race, color, national origin, sex, or religion; disability; genetic information (including family medical history); and age (40 or older). These laws are enforced by the Equal Employment Opportunity Commission (EEOC).
In addition, when you run background checks through a company in the business of compiling background information, you must comply with the Fair Credit Reporting Act (FCRA). The Federal Trade Commission (FTC) enforces the FCRA. This publication explains how to comply with both the federal nondiscrimination laws and the FCRA. It’s also a good idea to review the laws of your state and municipality regarding background reports or information because some states and municipalities regulate the use of that information for employment purposes.