The city of San Francisco passed a new ordinance earlier this month, banning private employers with city contracts from performing criminal background checks for hiring purposes. Embezzlers, murderers, identity thieves. Employers and employees alike may be a bit on edge about the impact of this ordinance. But for the most of us in the great state of California, employers can perform background checks when hiring new employees. There are limits, however, on how far back those checks can go and how employers can use this information when making hiring decisions.
Let's start with an important background assumption. The federal Equal Employment Opportunity Commission (the "EEOC") released new guidelines earlier this year stating:
"National data supports a finding that criminal record exclusions have a disparate impact based on race and national origin. The national data provides a basis for the Commission to investigate Title VII disparate impact charges challenging criminal record exclusions."
"An employer’s neutral policy (e.g., excluding applicants from employment based on certain criminal conduct) may disproportionately impact some individuals protected under Title VII, and may violate the law if not job related and consistent with business necessity (disparate impact liability)."
What does this all mean?
If your company excludes all applicants with criminal convictions (generally arrests that did not result in convictions may not be considered), the EEOC will presume that the practice has the effect of eliminating more Hispanic and African-American applicants than applicants of other national origins and races. That is, your practice has a "disparate impact" on these applicants and your company may be at risk for a Title VII discrimination lawsuit.
What can you do to protect your business?
The EEOC guidelines allow employers to take criminal background history into account when it is " job related and consistent with business necessity." This means that employers can take into account whether a specific criminal conviction is related to the job that the applicant is applying for. For example, if an applicant applying for a cashier job or a job handling credit card information and the background check shows that this individual was convicted of identity theft two years ago, then an employer who rejects an applicant on this basis will likely have a good defense to a potential discrimination claim by the applicant.
Specifically, the EEOC states that employers should perform an individualized assessment of each applicant, including considering the following factors:
- The nature and gravity of the offense or conduct.
- The time that has passed since the offense or conduct and/or completion of the sentence.
- The nature of the job held or sought.
- The facts or circumstances surrounding the offense or conduct.
- The number of offenses for which the individual was convicted.
- Older age at the time of conviction, or release from prison.
- Evidence that the individual performed the same type of work, post conviction, with the same or a different employer, with no known incidents of criminal conduct.
- The length and consistency of employment history before and after the offense or conduct;
- Rehabilitation efforts, e.g., education/training.
- Employment or character references and any other information regarding fitness for the particular position.
- Whether the individual is bonded under a federal, state, or local bonding program.
The EEOC guidelines are only part of the equation here. In addition, the federal Fair Credit Reporting Act and California's equivalent laws, including the Investigative Consumer Reporting Agencies Act, also place limitations on on background checks. For example, background checks can only go back 7 years, and applicants rejected because of a criminal conviction must receive certain specified notices and an opportunity to respond. Violations of these Acts may result in fines.
For California employers, certain misdemeanors - such as certain marijuana convictions - are specifically excluded from consideration. Also, don't forget that arrests which did not lead to convictions may not generally be considered.
This is a complicated area of law, so it's important that your company chooses its background check vendor wisely and makes individualized assessments of whether to reject applicants with criminal convictions. If you're unsure of whether or not your company is complying, it's a good idea to consult with employment lawyer.