For years, employers have been using background checks to learn more about job applicants before hiring — or not hiring — them. But states and cities are now enacting laws that limit how far employers can dig into a prospective hire’s credit history and criminal background.
Background screenings are an important part of a company’s hiring process. However, these checks must comply with federal, state and local laws, or else the employer faces fines and penalties, as well as a possible employment discrimination lawsuit.
Job applicants need to know that employers can only conduct credit and criminal background checks to the extent provided by law. It is important to also note that potential hires must provide written authorization for an employer to conduct any kind of background check.
The federal Fair Credit Reporting Act restricts employers’ use of credit histories in the hiring process.
According to the Association of Credit and Collection Professionals, evidence shows that credit reports are frequently erroneous and a person’s credit history doesn’t necessarily reflect his or her ability to perform a job.
States and cities across the country have also enacted laws that limit employers’ use of credit information. While each law has its own nuances, most allow credit checks when employers are financial institutions or when the credit history is substantially related to the job’s duties.
More than 100 cities and counties nationwide, as well as 19 states, have enacted “ban the box laws.” These laws limit the questions that employers can ask about a job applicant’s criminal history.
Ban the box laws are aimed at removing hiring barriers for persons who have committed low-level criminal offenses. Some laws allow inquiry only into certain convictions, and prevent employers from asking about non-conviction arrests or expunged records.
Employers must determine whether they are located in a ban the box jurisdiction and, if so, they must assess what questions they cannot ask prospective employees. Employers must then review their job applications, remove or limit questions, and ensure their hiring policies follow the law.
If you suspect that your rights were violated during the job application process, you may be entitled to compensation. Please contact the attorneys in Sommers Schwartz’s Employment Litigation Group today to discuss your situation.