Big Business Fights To Preserve Employers' Use Of Background Checks

In the aftermath of the World Trade Center attacks, it's become commonplace for employers to rely on background checks to vet potential employees. But with allegations of employer abuses, the Equal Employment Opportunity Commission now is weighing whether to limit employers' rights to use background checks to make hiring decisions.

Tens of millions of Americans have criminal records, though by law they can't be denied employment unless the nature of the offense conflicts with job duties. But research by the National Consumer Law Center, an advocacy organization, shows that third-party companies performing background checks routinely fail to accurately interpret and report relevant information.

The NCLC also found many criminal records are riddled with errors. As a result, many workers' advocates are calling for the government to curtail employers' usage, arguing that perfectly qualified, eligible workers are denied jobs simply because of rampant misuse of background checks. And some suggested that people of color are disproportionately hurt by the practice.

In a public meeting today, the EEOC will weigh how to protect job applicants from these abuses, but altering the rules already has met with strong resistance from business and employment groups, including the U.S. Chamber of Commerce and the Society for Human Resource Management, who say the federal government shouldn't further meddle in decisions about whom to hire.

Error-Prone Reports

The National Consumer Law Center, an advocacy organization, has noted the following mistakes in the background screenings:

  • Mismatching the subject of the report with a different individual who has the same or similar name.
  • Revealing sealed or expunged information.
  • Omitting information on how a criminal charge was resolved.
  • Providing misleading information.
  • Mischaracterizing a misdemeanor charge or conviction as a felony.

Moreover, the manner in which background checks are currently performed more adversely affects blacks, Hispanics and other minorities, according to the Rev. Jesse Jackson. "A disproportionate number of those with criminal records come from low-income communities of color," Jackson recently wrote in a Chicago Sun-Times column, urging the EEOC to update its guidelines.

Workers' rights advocates also argue that the expansive use of background checks -- some 90 percent of employers use criminal background checks, according to the National Employment Project -- gives employers too much power in making hiring decisions, while denying those with records the opportunity to review such information.

Employers and big business groups, however, see the issue differently. In a recent editorial, The Wall Street Journal, known for its staunchly pro-business editorial page, said the EEOC would be overstepping its legal bounds if it limited employers' use of background checks.

"A company might use a credit check if a prospective employee would have a job that handles customer monies, for instance. A child-care center might want to know if an applicant has a criminal record. Both help companies make prudent hiring decisions."

What The Law Allows

Under federal law it is illegal for employers to deny employment to applicants based on arrest or conviction records -- including felonies, unless there's a direct correlation between the criminal record and the job being sought. Further, many states have laws that specifically prohibit an employer from asking a job applicant about arrests.

Ironically, the EEOC's effort to further limit companies' use of information obtained in criminal checks may affect its own hiring policies.

Last week, a federal court ruled that the EEOC must answer more questions about its own use of background checks in selecting new employees, reports.

The ruling stems from a legal challenge that the agency staked out against Kaplan Higher Education Corp. in which the EEOC alleges that Kaplan unnecessarily relied on credit histories in evaluating black job seekers, to the applicants' detriment.

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