We regularly receive employment screening questions from prospects, new clients and the general public. Over the years, we’ve addressed many of them via our blog. We’ve even created several resources on employment screening compliance, including a behind-the-scenes look at how background checks are conducted and potential differences among service providers.
This month, we’ll address some of these questions in an interactive quiz (that we hope you’ll enjoy).
Do you think you can ace it?
Before we begin, here are some simplified definitions for terms you’ll see throughout the quiz:
- Consumer Reporting Agency (CRA) – background check companies
- Consumer – the subject of the background check
- Consumer Report – background check report
- Fair Credit Reporting Act (FCRA) – the law that regulates employment-related background checks
All the questions below pertain to a CRA conducting background checks for employment purposes, which the “end user” (you) will use, in whole or in part, to determine employment eligibility. In other words, employment background checks.
Good luck! (Answers appear at the end.)
True/False Employment Screening Quiz for Employers
1. You are only required to notify a consumer that you are conducting a background check on them when there is derogatory information on the report that will disqualify them from employment.
2. If you receive a background check report containing information that will disqualify a consumer from employment, you need to provide that consumer a copy of their report before taking adverse action.
3. It is wise to obtain a credit report on all consumers for employment screening.
4. You should not share the consumer’s annual salary with your CRA.
5. The FCRA applies when hiring a new employee, as well as for current employees.
Extra credit:
Before disqualifying a consumer due to a criminal record found on their background check report, you should conduct an “individualized assessment” of the criminal record (i.e., consider factors such as job relevancy, severity of the crime, when the crime occurred, candidate’s age at the time of the offense, evidence of rehabilitation, etc.).
How did you do? Let us know in the comments if you enjoyed this blog and, if you’re brave enough, how you did!
———-
Answer Key:
1 – False
The FCRA requires that “a clear and conspicuous disclosure [be] made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes…” Translation: You must always provide notice before running a background check on a consumer for employment purposes. Take care, however, not to include any extraneous information or wording in the disclosure. The FCRA is a hyper-technical law, and we highly recommend working with legal counsel when developing your employment screening program.
2 – True
The FCRA states that “before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates – (i) a copy of the report…” Additional FCRA provisions govern the pre-adverse/adverse action process, as well as state-specific requirements, so make sure you comply with these laws when taking adverse action against a consumer for employment purposes.
3 – False
A growing number of states and cities restrict the use of credit reports for employment purposes. For example, with few exceptions that are to be “construed narrowly,” credit reports cannot be used in New York City for evaluating employment eligibility. California has similar restrictions, and Massachusetts is moving to be even more restrictive. Many other jurisdictions also have restrictions, with more to come. Bottom line: Do your due diligence before obtaining a credit report as part of your background check program; you may not be able to use them for employment purposes.
4 – False
The FCRA generally restricts how long certain records may be reported. For example, while convictions can be reported forever, non-convictions can only be reported seven (7) years from the date of entry. However, the FCRA lists an exemption that permits the reporting of non-convictions beyond the seven-year restriction for “the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more.” Some states are even more restrictive than the FCRA when it comes to what can be reported to end users. In New York, for example, convictions can only be reported within the past seven (7) years; however, this restriction does not apply to “the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal twenty-five thousand dollars, or more.” As you can see, salary matters.
5 – True
The FCRA defines “employment purposes” as “the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee.”
Extra Credit – True
While not explicitly stated in the FCRA, the U.S. Equal Employment Opportunity Commission (EEOC) published enforcement guidance, which outlines how criminal records should be used and what constitutes an individualized assessment. Additionally, many cities and states are mandating this as part of an adverse action process. New York City and California are, yet again, two examples. New York City even provides a helpful template to conduct the assessment; the California Civil Rights Department also provides a sample assessment form.
