Pros and Cons of Criminal Background Checks

shutterstock_69479671Many companies have made criminal background checks a standard part of their hiring process, but are they worthwhile for the average small business?  Employers in certain sectors, such as child care, are required to screen applicants for specific crimes.  Other employers choose to screen applicants to reduce employee theft, workplace violence and potential liability for negligent hiring.  However, employers, particularly Pennsylvania employers, need to be cautious in the use of criminal background checks to avoid violating various state and federal laws.

In Pennsylvania, the use of criminal background checks in making hiring decisions is governed by part of the Criminal History Record Information Act (18 Pa.C.S. § 9125), which permits employers to consider an applicant’s felony and misdemeanor convictions – not mere arrests – but only to the extent that the convictions relate to the applicant’s suitability for the specific job in question.  If an employer’s decision not to hire an applicant is based in whole or in part on criminal history record information, the Act requires the employer to so notify the applicant in writing.  Rejected applicants can sue to challenge the employer’s reliance on the background check.  If the conviction relied upon is held to be unrelated to the job, or if an employer relied upon a mere arrest, the Act permits an award of actual damages as well as punitive damages (up to $10,000) and attorneys’ fees.

Even a well-intentioned employer can run afoul of the Act because it does not set clear parameters for determining whether the conviction in question is “related to the applicant’s suitability for employment in the position for which he has applied.”  Even a baseless lawsuit is time consuming and expensive to defend; how can an employer minimize the risk when utilizing criminal background checks?

Generally, employers should observe the following guidelines.  Evaluate each applicant’s conviction record on its own merits rather than barring all applicants with criminal convictions. Document the reasons for rejecting an applicant, and if the reason is a criminal conviction, be sure to memorialize the link between the conviction and the job. Refrain from informing candidates of the strength of their application before evaluating the criminal back ground check; an applicant who is told he is a strong candidate and is later rejected is more likely to contend that the rejection was due to the criminal background check, even if the background check was not a relevant factor.

In addition to state law restrictions, an employer’s use of criminal background checks must also comply with federal employment discrimination laws, enforced by the Equal Employment Opportunity Commission (EEOC), and with the Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC).  The FTC treats a criminal background check as an investigative consumer report, thus subjecting employers who use them to a time-consuming and costly compliance process.

Criminal background checks may be a useful tool for employers, but they should be used cautiously and with a commitment to careful, documented compliance.  Especially for a small business, an employer would be wise to take the time to weigh the pros of an improved applicant pool and the potential for reduced workplace crime and violence with the cons of added time and expense in the hiring process and the risk of liability for violating state or federal regulations governing the use of criminal records.

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