From Forbes.com:
Conducting background checks on prospective employees can give employers confidence in their hiring choices. However, a growing number of states and cities – which now includes New York City – restrict employers from inquiring into criminal convictions (under the “ban the box” movement) or using credit histories in employment decisions. In light of these developments, here are some suggested Do’s and Don’ts regarding employment background checks. Do Conduct Background Checks, If PermittedBackground checks, where permitted, can help verify job applicant information or screen candidates for promotions or reassignments. This can be especially important for positions that involve handling personal or financial data, and can help weed out persons who may not be suitably responsible. Background checks also can help protect employers, who may be held legally responsible for injuries or damages caused by an unsuitable employee.Do Obtain Written AuthorizationsBy law, employers who engage outside companies to conduct background checks (when and where permitted) must (i) notify job applicants, in a written document separate from other employment or application documents, that there will be background checks, and (ii) obtain the applicants’ authorization, in writing (which can be part of the document mentioned above), to conduct background checks. Employers conducting their own background checks would be prudent to follow the same rules.Do Treat All Applicants Equally—Don’t DiscriminateRun the same checks on all applicants for a particular job, at the same stage of the hiring process (for example, on all finalists for a position). Employers may not choose whether or not to conduct background checks based on an applicant’s protected category, such as their race, color, national origin, sex, religion, disability, or any other protected category. Don’t discriminate in the use of information from background checks. For example, if a particular credit history would disqualify an applicant, it must disqualify applicants of all races. Employers must also be careful to avoid any use of background reports that may result in its hiring – or rejecting – any class of employees based on race, gender or other protected category.Do Limit Background Checks to Information Permitted by LawMost laws permit employers to verify employment history and education history. Employers may also seek military service records, driving records, copies of bankruptcy filings, drug tests and publicly available social media posts, although they may require the applicant’s permission and caution in handling confidential information.Employers may not seek a job applicant’s medical records or genetic information (including family medical history). Once an employer has made a conditional job offer, the employer may inquire, subject to applicable laws, about any medical conditions or disabilities that would prevent the candidate from performing the job.Several jurisdictions – including California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont and Washington, and now New York City – limit the use of credit history in employment decisions. Each law has its own exceptions. Most laws permit credit checks when the employers are financial institutions or credit history is substantially related to the job’s duties. California permits credit checks for, among other things, positions that involve access to confidential or proprietary information, as defined by law. Nevada permits credit checks when, among other reasons, the employer reasonably believes that the applicant engaged in specific illegal activity that will show up in the report. In New York City, employers may check the credit history of police officers, people with certain fiduciary duties, people with access to trade secrets or intelligence information, cyber security personnel and certain public officials.State and local laws also limit the use of criminal history in employment decisions. Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, and Rhode Island, and approximately a dozen cities and localities, have “banned the box” for private employers, which means they cannot ask about criminal convictions in job applications. Employers may inquire about criminal history (within limits) later in the hiring process – for example, after issuing a conditional offer of employment. Do Notify Applicants or Employees of any Decisions Based on Background ReportsEmployers who make preliminary employment decisions based on background reports must first notify the applicants or employees, provide them with a copy of the report, and give them reasonable time to review the report and explain any negative information, before making any final employment decision. Employers who reject applicants or employees based on background reports must also notify them and provide information about the company that prepared the report. Some locations require additional procedures if rejections are based on criminal convictions.Do Comply with Laws on Records Retention and DisposalMost employers must maintain any personnel or employment records (including rejected applications) for at least one year or until any charges of discrimination are resolved. Some jurisdictions may require additional retention time. After the applicable retention period, employers disposing of background reports, whether paper or electronic, must do so in a manner that they can no longer be accessed or read.In sum, background checks are an important part of the screening process for employers and can help protect employers from hiring persons not fit for the applicable job. They do, however, require careful compliance with applicable federal, state and local laws to avoid claims from rejected applicants.Joel J. Greenwald, Esq., is the managing partner of Greenwald Doherty, LLP, an employment and labor law firm, representing exclusively management, and can be reached at (212) 644-1310 or jg@greenwaldllp.com.DISCLAIMER: The foregoing is a summary of the laws discussed above for the purpose of providing a general overview of these laws. These materials are not meant, nor should they be construed, to provide information that is specific to any law(s). The above is not legal advice and you should consult with counsel concerning the applicability of any law to your particular situation.The views expressed in this post are those of the author, and do not necessarily represent the views of the Entrepreneurs’ Organization, its management, or its other members.