The EEOC and Background Screening

The EEOC has taken on – with great vigor – the issue of using credit and criminal background checks in pre-employment screening.  Their stance, as you can imagine, is that these checks are discriminatory and should be discontinued.

To really understand their stance, we can look to a case the EEOC filed in October of 2009, in the District of Maryland against Freeman, a national event planning company. The suit alleges ongoing practices of discriminatory hiring which violate Title VII of the Civil Rights Act, noting that Freeman’s practice of using an applicant’s criminal history in hiring decisions has a negative impact on African-American applicants. The EEOC further alleges that using information regarding criminal and credit histories in hiring decisions has a disparate impact on African-American, Hispanic and male applicants. As a point of reference, Title VII is the main federal law that prohibits employers from discriminating against employees or applicants based on race, color, religion, sex, or national origin. In addition to banning more obvious acts of discrimination, Title VII prohibits the use of hiring criteria that have a disparate impact on applicants who are members of a protected class.

In the Freeman case, the EEOC is asking the court to prohibit Freeman from using credit histories and criminal records in their hiring process.  The agency is also seeking injunctive relief, lost wages and benefits for applicants and deterred applicants, as well as reinstatement.

This lawsuit is a reminder to employers who perform background checks to periodically review their criteria.  For instance—companies who have a bright-line policy against hiring applicants with a criminal record, without regard to whether the conviction is job-related, how serious and long ago it was, and if there is any evidence of rehabilitation, will likely find they have to change their practices to come in line with EEOC guidelines.  In the Freeman case, the EEOC did not contend that Freeman intentionally discriminated against minorities and men, but argued that the use of the screening criteria was not required for the types of jobs being filled.

What does all of this mean to you? Simply put, if a background report shows that an applicant was found guilty or convicted of a crime, he or she cannot automatically be eliminated from consideration for employment. The EEOC does permit employers to use convictions on the basis of sufficient and valid “business necessity” that can be justified if the conduct that led to the conviction is particularly egregious or related to the position applied for. Business necessity can be determined by the following factors:

  • Nature and gravity of the offense
  • Time elapsed since the conviction and/or completion of the sentence
  • Nature of the position

The EEOC allows the conviction record to be a bar to employment if examination of the above factors reveals the applicant to be unsuitable for the position. Numerous courts have adopted this same position.  Also, keep in mind that federal and state requirements may contradict each other. A federal law may allow the use of certain information, while a state law bars it altogether.

What to do?  In order to keep your company compliant, employers must closely review their hiring processes and the standards they use regarding credit and criminal records when making hiring decisions. It is also important to periodically review how your state guidelines differ from the federal guidelines and be prepared to come in line with the more stringent of the two.

For more information on the EEOC’s Guidance on when employers can use arrest and conviction records as part of their pre employment criteria, visit

Does your small to mid-sized company have access to high quality background checks?

In our travels around the country meeting with HR executives and exhibiting at the different HR trade shows, my colleagues and I frequently hear complaints from HR executives that their small to mid-sized companies have a hard time getting access to high quality background checks.  Do you have that same problem? I’m interested in hearing your experiences in trying to secure your work force and hire quality employees on a tight budget and without the services that are available to Fortune 1000 companies. Most services available to smaller companies are database searches which are oftentimes inaccurate, out of date and not FCRA compliant. 

As an answer to this problem, we listened to the pain points and developed CheckToHireSM , which we believe is an excellent solution.  If your company is a small to mid-sized business, this is a great service that is automated, accurate and cost effective – a “Pay-As-Needed” service that is backed by CARCO’s 30+ years of experience in the background screening business ( There are no long term contracts, retainers or monthly charges to incur.  If you’d like to take a closer look, check out the CheckToHireSM website at

In the meantime, I’d love to hear more about how your small to mid-sized company handles its background screening needs.

What’s Your Take on the “Ban the Box” Movement?

I recently blogged about the concern around the use of credit checks in background screening, and whether that practice might keep good people out of jobs.  Similarly, there is a concern that society will develop an underclass of criminals if we continue to keep rehabilitated ex-convicts out of work… and from this concern, the “ban the box” movement, which has gained real traction across the country.

So, what is the “Ban the Box” movement?  Essentially, it is a movement that doesn’t mandate that employers must hire every person with a record… but it does seek to ban the question about previous convictions from an application. Why?  To allow the rehabilitated person to have a chance at securing an interview—which their conviction likely would deny.  At its core, from the humane perspective, this doesn’t seem to be such a bad idea, right?

It’s not.  But employers have a responsibility to their employees, customers and other stakeholders to provide a safe and secure workplace… and this responsibility is in direct conflict with an ability to give everyone a “fair chance.”  That being said, I suggest that with the help of a background screening partner, most employers can come to a realization that while not every position is appropriate for everyone… there is an appropriate position for everyone!  We recommend discretion, caution… and compassion in the hiring process.  Someone convicted for embezzlement may not be right for your controller position.  But he may be okay for an account management role.

Currently, laws in Massachusetts, Connecticut and New Mexico prohibit you from asking about criminal history on initial applications, but they do allow you (in most cases) to ask about convictions after a conditional offer of employment has been extended.  For the rest of you, we expect the movement to spread and gather steam in 2011.  So the question is—what will you do?  Ask or not?

Does Your Company Have a Robust Drug Screening Program in Place? Reports That Drug Use At Work Is Higher Than We Thought. recently published an article by Ann Fisher on a report by the drug-testing company Quest Diagnostics indicating that the number of Americans using cocaine while at work fell 29 percent between 2008 and 2009 to about 0.29% of the population. However, heroin use and prescription medication use has increased. As a matter of fact, the amount of positive heroin tests rose from 0.0008 percent to 0.04 percent between January and June 2010.

Now more than ever it is important to include a robust drug screening process as part of your company’s standard pre employment screening program. The U.S. Department of Health & Human Services has reported the following workplace statistics:

  • 77% of illegal drug users hold either full-time or part-time jobs.
  • More than 60% of adults know someone who has worked under the influence of alcohol or drugs.
  • Substance abuse costs American businesses approximately 81 billion dollars annually in lost productivity, absenteeism and accidents.
  • 500 million workdays are lost annually from employee substance abuse.

Being proactive about testing for drug usage in the pre hire process will help to ensure a healthy and safe workplace and affirm your company’s drug-free workplace policy. At CARCO, we believe that drug screening, along with a thorough background check, should always be part of your pre employment screening process.  For more information on how CARCO Group can help with your drug screening and general pre employment screening needs, please contact our Sales Team at 866-557-5984 or via email at  Be sure to visit our website at to learn about our full suite of risk mitigation services.

Credit Controversy – so last year, or the big deal for 2011?

Bad credit=bad employee?

And so begins the conversation about whether it is fair to equate a job applicant’s financial responsibility with their likely job performance.  Does an inability to balance a checkbook ladder up to an inability to meet deadlines?  Does the loss of a spouse’s job, which leads to missed mortgage payments and ultimately bad credit, mean a prospect is undeserving of a role with your firm?

These burning questions have been debated for years; however, the debate has heated to profound levels in the past few years due to the toll that the economic downturn has had on the average American.  Not since the Great Depression have so many hard-working, financially responsible people been forced out of work for extended periods of time. Many who were never late paying a bill in their lives were forced to exhaust every avenue to stay afloat—maxing out credit cards and home equity lines, taking loans from friends and family, and, in severe cases, ceasing payment on their homes, cars and other bills. For many of these people, their only solution to righting their ship is to find other employment. And yet, the use of credit checks in the hiring process, it has been argued, will work to prevent that, thus disabling those who have fallen on hard times from correcting their course.

Our role at CARCO is not to express an opinion, but instead, to know the law.  So here is what we know is true—and we look to our readers to comment, ask questions, play the devil’s advocate and start a conversation.

First, in states where it is legal, employers may run a credit report on any applicant. The rationale behind this is that a history of how responsible the individual is when it comes to handling their own finances provides insight into the level of responsibility the employee will exert in the workplace.  It has also been argued that a desperate need for money is often the root cause of theft. Those against the practice, including the Equal Employment Opportunity Commission (EEOC), argue against these points, and also argue that the use of credit history could potentially violate the law because it has a disparate impact on minorities, who tend to have higher foreclosure and unemployment rates. Further complicating this debate, many opposed to the use of credit checks mistakenly believe that a credit score is part of an employment credit report, when it is not.

Despite this fact, several states have restricted the use of credit information in employment screening. At the federal level, the Equal Opportunity for All Act was introduced in the House of Representatives. Most of these laws, while generally restricting the use of credit information, do have some narrow exceptions, such as allowing credit checks when hiring for positions that require a fiduciary responsibility, including those in banking, insurance, national security, and trade secrets.

With this information in hand, we ask you– for employers in states where using credit in employment screening is still legal, what is the right approach?