Skip Navigation LinksASIS International / Membership / Government Affairs / Legislative Center / Employee Background Check Restrictions

Employee Background Check Restrictions

112th Congress Recap: Legislation was introduced to restrict the use of both criminal background checks (H.R. 6220, the Ban the Box Act) and credit checks (H.R. 321, the Equal Employment for All Act), but ultimately failed to pass. However, the Democrat-controlled Equal Employment Opportunity Commission (EEOC) took action to restrict the use of criminal checks by employers and attempted to do the same with credit checks.
EEOC Employer Criminal History Check Guidance:
In April 2012, the EEOC issued an update to the twenty-year-old Enforcement Guidance on employer use of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act of 1964.   The Guidance guides EEOC field offices in their decisions and actions to investigate and/or sue employers for possible violations of Title VII related to the use of criminal background checks. Accordingly, it also guides employers on how to use criminal background checks so they can avoid being investigated and/or sued by the EEOC or employees.   The Guidance is not law or a federal rule and is not binding; however, a possibly very costly EEOC investigation and/or a Title VII lawsuit could be the fate of employers who ignore the Guidance. Employers are now being warned to review and potentially revise their current criminal background check policies to make sure they are “job related and consistent with business necessity” and as “narrowly tailored” as possible.
The Guidance presumes that criminal record exclusions in employment have a “disparate impact” based on race and national origin. Thus, even if a company can show that there is no “disparate treatment” of minorities as a result of its screening policy, the EEOC can still investigate the issue.  Additionally, the Guidance states that employers should “include an individualized assessment” in its screening policy as a best practice. An individualized assessment “generally means that an employer informs the individual that he may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him; and considers whether the individual’s additional information shows that the policy as applied is not job related and consistent with business necessity.” While federal court decisions interpreting Title VII have stated that the absence of an individual assessment is not a violation of Title VII, the EEOC does not agree.
Most controversially, the Guidance states that complying with state and local employment restrictions on hiring persons with certain criminal records is not a shield from Title VII liability.  And, while federal based “disqualifications” cannot be questioned under a Title VII cause of action, one issue that has been raised by employers is how the Guidance will impact federal laws and rules that provide for and encourage (but do not require) certain employers (child care, pharmaceutical, elder care, security officers) to conduct criminal background checks.
The Guidance also makes a “recommendation” that as a “best practice, and consistent with applicable laws, employers not ask about convictions on job applications and that, if and when they make such inquiries, the inquiries be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity.” While there is no law or federal court decisions that disallow asking about convictions on an application, the EEOC --- through the possibility of investigations and lawsuits --- is essentially establishing a national “ban the box” policy.
EEOC Credit Check Guidance:
In 2012, the EEOC issued a draft updated Guidance on the use of credit checks by employers. The draft guidance stated that; (1) credit checks have a discriminatory impact on protected classes, (2) there will almost never a business necessity to use credit for employment (even if otherwise required by law), and (3) costly and time-consuming validation studies would likely be required by employers in nearly every instance where credit is a factor in making employment decisions.
Many believed the EEOC would release the credit guidance contemporaneously with the criminal guidance, but that did not happen. Now with the Commission down one Democrat, it appears unlikely the EEOC will try to pass out the credit check guidance on what would most likely be a 2-2 vote. While a 2-2 vote is sufficient to approve the guidance, such a non-majority would invite political and judicial scrutiny.