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Review Your HR Practices on Employment Background Checks


Review Your HR Practices on Employment Background ChecksIn the past, we have written about the use of employment background checks and the importance of complying with state and federal laws to avoid finding yourself in violation of employment practices. This issue continues to be an area of concern for companies as exemplified by BMW’s recent consent decree with the Equal Employment Opportunity Commission (EEOC) to pay $1.6 million and offer to hire dozens of people previously rejected as having unacceptable criminal histories.

The facts of the BMW case: According to the EEOC, the complaint against the automaker alleged that when it changed the contractors handling the company’s logistics at its production facility in Spartanburg, South Carolina in the summer of 2008, it required the new contractor to perform a criminal background screen on all existing logistics employees who re-applied to continue working in their positions at BMW. At that time, BMW’s criminal conviction records guidelines excluded from employment all persons with convictions in certain categories of crime, regardless of how long ago the employee had been convicted or whether the conviction was for a misdemeanor or felony.

According to the complaint, after the criminal background checks were performed, BMW learned that approximately 100 incumbent logistics workers at the facility, including employees who had worked there for several years, did not pass the screen. The EEOC alleged that 80% of the incumbent workers disqualified from employment as a result of applying BMW’s guidelines were African American. The agency then filed suit alleging that African Americans were disproportionately disqualified from employment as a result of the criminal conviction records guidelines. EEOC sought relief for 56 African-Americans who were discharged. BMW has since voluntarily changed its guidelines.

It’s important to note that the events at BMW took place prior to the EEOC’s issuing its April 2012 Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII. Under that Guidance and Title VII, employers can use criminal histories in employment decisions but if the criminal history policy has an adverse impact against a protected category, the employer must prove that the policy is job-related and consistent with business necessity. The Guidance strongly encourages employers’ policies to include an individualized assessment, including consideration of the nature of the crime, the time elapsed since the crime, and the nature of the job.

In addition, in March of 2014, the EEOC and the Federal Trade Commission (FTC) released two short guides explaining how both agencies’ respective laws apply to background checks performed for employment purposes. One guide is available for employers, the other for employees.

In a nutshell, a company must obtain prior written authorization from applicants and employees to conduct a background check. Also, you must notify applicants and employees that a background check will be conducted, describe the scope of the background check, and inform them that information received from the background check may result in adverse employment action. This notice and authorization should be on a separate page from the job application itself. Moreover, you must plainly notify the applicant or employee that a refusal to authorize the background check may result in adverse employment action, such as rejection of the application or termination of employment. If you intend to take adverse employment action based in any part on the results of the background check, you must give the applicant or employee written notice at least seven days in advance, and provide them with a copy of the background check and the FTC’s summary of rights under the FCRA. After the adverse action is taken based on a background check report, you must issue the applicant or employee a second notice, advising them that they were not hired (or were discharged or disciplined) because of information in the report, providing the name and contact information of the company that provided the report, and providing certain additional information, including the individual’s right to dispute the accuracy of the report and to obtain a free report from the report provider within sixty days.

Be sure to review your practices to ensure compliance with federal law as well as any state requirements regarding background checks. Also, consult an experienced attorney to provide you with advice pertaining to your practices. What’s more, to further protect against the risks involved with employment-related issues, make sure you have a sound Employment Practices Liability Insurance (EPLI) program in place. EPLI coverage will respond in the event allegations are made claiming discrimination, sexual harassment, wrongful termination, and other workplace issues. At Axis Insurance Services, we specialize in Employment Practices Liability Insurance and can help secure the insurance coverage needed. Give us a call at: (877) 787-5258.

 

Sources: EEOC

 

 

 

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Blogged on: October 13, 2015 by Mike Smith
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