In the past, disqualifying potential employees based on past criminal convictions was just a routine aspect of the hiring process in workplaces across America. However, with recent “ban the box” legislation limiting—and in some cases outright prohibiting—employers from questioning prospective hires about past criminal convictions, prevailing attitudes toward disqualifying applicants based on past criminal convictions appear to be shifting. 

On Dec. 21, 2018, President Trump signed the First Step Act, which, among other things, is aimed at reducing prisoner recidivism and increasing workforce readiness. The Act, which received wide bipartisan support, provides nonviolent federal prisoners with retroactive “good credit time,” and provides incentives for participating in pre-release programs. As the Act has already resulted in sentence reductions for more than 1,000 federal prisoners, prudent employers should consider how the First Step Act and other recent state and federal “second chance” legislation may affect their respective hiring processes. 

While most employers instantly recognize the perceived risks associated with hiring individuals with a criminal history, albeit nonviolent, many savvy employers also recognize the potential benefits of tapping into a large pool of employees eager to reacclimate themselves into the workforce. When assessing whether to expand the organization’s pool of potential employees to include individuals who have at some point been convicted of a crime, there are several important factors to consider, including:

• whether background check procedures are in compliance with the Fair Credit Reporting Act (FCRA);
• whether federal and/or state law mandates background checks for certain industries and;
• whether company policy is narrowly tailored. 

Are the company’s background check procedures in compliance with the FCRA?

When a company uses a third party to collect a “consumer report” on current and/or potential employees, the manner in which the report is obtained and used to assess the individual’s employment worthiness must meet the requirements of the FCRA, which defines “consumer report” as:

"Any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for ... employment purposes ..." 

Thus, consumer reports may, for example, include credit reports, criminal background checks, driving records and drug tests. The FCRA requires notice and consent from potential employees before a consumer report may be used in an employment decision. If a consumer report contains information that would call into question an individual’s qualification for a position, the employer is required to provide the individual with: 

• a summary of rights under the FCRA;
• a copy of the consumer report(s);
• a copy of any applicable state or local notice(s); and
• an opportunity to dispute the information contained in the report. 

Failure to provide the employee with any of the aforementioned information before disqualifying the applicant could result in liability for the employer. 

Is a background check required?

As a general rule, it is unwise to institute blanket exclusions for criminal convictions without conducting an individualized assessment of whether the conviction is related to the position for which the individual is being considered. Notwithstanding this general rule, however, there are certain “high-risk” industries where criminal background checks are mandatory and can be dispositive of an applicant’s qualification for a position. For example, businesses regulated by the Federal Motor Carrier Safety Administration are required to obtain, among other things, motor vehicle records for every applicant in every state in which the applicant has held a license for the previous three years as well as verification of whether the applicant has had any previous drug or alcohol violations. Prudent employers should contact legal counsel to confirm whether certain consumer reports may be mandatory when hiring for positions in the aforementioned industries. 

Is the policy narrowly tailored?

In keeping with recent federal and state “second chance” legislation, the Equal Employment Opportunity Commission has also demonstrated an increased scrutiny of employers whose screening policies tend to disproportionately disqualify individuals who belong to specific protected classes under Title VII of the Civil Rights Act of 1964.

The EEOC has been particularly opposed to the use of arrest records to make employment decisions on the grounds that arrest records alone are not a reliable basis for determining whether an individual actually engaged in certain conduct. While the EEOC has determined that conviction records may be considered when they are “job related and consistent with business necessity,” inquiries into prior convictions should not be made until after a conditional offer of employment has been extended. Effective policies include a consideration of:

• the nature and gravity of the crime committed; 
• the time that has passed since the conviction; and 
• the nature of the position for which the individual is being considered and how it relates to the offense committed.