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11.01.22   |   Insights

Ban-the-Box? Fair Chance Act? What Employers Need to Know About Criminal Background Checks

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Approximately 94 percent of employers conduct a criminal background check on job applicants before hiring. Background checks are imperative to protect the safety of customers and employees, but could the broad use of criminal background checks result in unintentional discrimination?

In recent years, legislation has been in the works to limit the way employers use background checks. Employers should be aware of “ban-the-box” laws which prohibit some types of employers from inquiring about criminal history on a job application, and the Equal Employment Opportunity Commission (EEOC) guidance on avoiding disparate impact discrimination through background check policies.

Ban the Box

Nationwide, 37 states and over 150 cities and counties have adopted what is widely known as “ban the box” laws so that employers consider a job candidate’s job qualifications first, without the stigma of a conviction or arrest record. This does not mean that employers are prohibited from conducting a criminal background check, but employers must wait until further into the interviewing process before doing so. The federal government recently passed a ban-the-box law that applies to federal contractors, but regulation of private employers varies by state.

  • Fair Chance Act. The federal Fair Chance to Compete for Jobs Act of 2019 (Fair Chance Act) went into effect in 2021 and prohibits federal contractors from requiring that an applicant for a position related to work under a federal contract disclose criminal history information before the contractor extends a conditional offer of employment.  This law applies only to federal contractors and does not impact subcontractors or private sector companies that do not have a contract with a federal government agency.
  • Ohio Public Employers. In 2016, the Ohio legislature passed Ohio Revised Code Section 9.73, which prohibits public employers from including on any form or application for employment any question concerning the criminal background of the applicant.  This law only applies to public employers, which includes a state agency or political subdivision of the state and excludes private employers. Ohio public employers may inquire about the applicant’s criminal history before an offer of employment is extended to an applicant, unlike federal contractors, but may not include the question on their application.
  • Ohio Private Employers. Ohio currently does not prohibit private employers from inquiring about criminal history on a job application. However, private employers should still ensure that their background check policies do not result in disparate impact discrimination as explained by the EEOC. Employers conducting business in states other than Ohio should check for any local ban-the-box regulations.

EEOC Guidance

Title VII of the Civil Rights Act of 1964 prohibits discriminatory employment decisions based on race, color, sex, and national origin. Two types of discrimination create liability under Title VII: disparate treatment and disparate impact discrimination. Disparate impact discrimination is referred to as unintentional discrimination, whereas disparate treatment discrimination is intentional.

So, how do criminal background checks get employers in trouble?

  • Lack of Consistent Policy. Employers risk engaging in disparate treatment discrimination when they pick and choose which applicants they conduct criminal background checks on. The EEOC advises employers to treat all applicants equally, as it is illegal to check the background of applicants and employees when that decision is based on a person’s race, national origin, color, sex, religion, disability, genetic information, or age. The best way to ensure equal treatment is to have a written background check policy and to follow it strictly for every applicant.
  • Broad Rejection Policies. While it is likely not the employer’s intention, a broad policy of rejecting all applicants who have a criminal record may result in a disparate discriminatory impact on members of certain protected classes. Statistics show that people of certain races and national origin are arrested and convicted at higher rates than others, so excluding everyone who checks “yes” on the box could impact those applicants at a higher rate. To avoid this while still protecting the safety of your customers and employees, the EEOC recommends taking an “individualized approach.” Criminal background check policies must be job-related and consistent with business necessity.

If you think your company’s background check policy (or lack thereof) is inconsistent with federal or state regulations and/or the EEOC guidance, do not hesitate to reach out to us at Critchfield, Critchfield & Johnston. Our employment lawyers would be happy to guide you through developing an effective and non-discriminatory background check policy.

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