Credit & Criminal Background Checks | ExactHire

Care Needs to be Used When Conducting Credit and Criminal Background Checks

This post was written by Paul W. Barada, Chairman of the Board, at Barada Associates, Inc.

Over the last several years, the focus of the Equal Employment Opportunity Commission has evolved into an even more candidate-centered agency, as opposed to giving much consideration to the concerns of employers. More and more specificity is being required of employers who want to ensure the safety of current employees and the honesty of new employees.

But rather than fight “city hall,” here are a few guidelines employers should follow when conducting either credit checks or criminal court checks. Since deciding when to use a credit check is easier, let’s start there.

Determine Which Job Applicant Groups Warrant Credit Checks

While it doesn’t make sense to order credit checks on all job applicants, there are occasions when it does matter. For example, jobs that involve some aspect of an employer’s finances would warrant a credit check. If the applicant will have access to a company’s funds, a credit card, or expense account, then a credit check is appropriate. One simple way for employers to make that determination is by looking at the job title and duties involved with the position. If the job title happens to be something like billing clerk, accounts receivable manager, or financial manager; then it would make perfectly good sense to run a credit check. At the same time, it should be noted that a credit check should be run on every candidate applying for a billing clerk’s position…not just on some of those who apply.

It’s always a good idea for employers to check specific state laws that may exist about the use of credit checks in the hiring process, as well. Otherwise, unless the job is directly related to the employer’s finances, using a credit check to decide who to hire for other types of non-financial jobs really doesn’t make much sense.

When is it Okay to Run a Criminal History Check on Applicants?

Criminal checks are a little more complicated. The first and most important point to remember is that…

No hiring decision should ever be made on the basis of a mere arrest.

Denials of employment have to be based on a conviction, but there are also other qualifiers to keep in mind. In other words, an employer should not deny employment simply because a criminal conviction appears on a candidate’s record. Factors that have to be considered include what are known as the “Green Factors“:

  • the nature and gravity of the offense or conduct
  • how much time has passed since the offense
  • conduct and/or completion of the sentence
  • the nature of the job held or sought

While that all may sound a little complicated, it’s really not. Common sense is the best guide in nearly every case. For instance, if it turns out that a candidate has, let’s say, ten years of solid job performance in the field that the employer needs, but was convicted of a DUI while in college, common sense would seem to suggest that a youthful indiscretion a decade ago hardly justifies denying a job offer today. On the other hand, if a candidate has a record of multiple convictions for theft, hiring him to be in charge of the company vault wouldn’t make much sense either!

On a more serious note, when considering a candidate with a conviction record for workplace violence – including a recent conviction for that type of behavior – an employer would be on solid ground denying employment to that person strictly on the results of his criminal background check because of the employer’s responsibility to maintain a safe workplace. Generally speaking, the standard time frame most employers use is to go back seven years when checking criminal convictions. Complying with that standard is probably the most reasonable thing to do, although there’s no harm in going back further, providing there are no state laws that prohibit reporting back more than seven years.

Keep FCRA Authorization Separate from Employment Application

It should be particularly kept in mind that if an employer with a job opening is going to do a background check, candidates must be asked to sign a “disclosure and authorization form” that is completely separate from an employment application. If negative information comes back, the Fair Credit Reporting Act (FCRA) specifies that a “pre-adverse-action letter” be sent to the applicant. Thereafter, the applicant must be given the opportunity to supply additional “facts or context” that explain in writing why the outcome of the background check should not apply. If a satisfactory response is not given, then the employer may send out the required “adverse action” letter to the candidate.

In summary, we are finding that the legislative pendulum continues to swing in favor of job seekers and away from employers. Despite that, however, it’s still possible to successfully, thoroughly, and lawfully carry out background checks that will help ensure that employers can still hire the best people for the jobs they need to fill.

To find out more about using Barada Associates’ online background check service in conjunction with our applicant tracking software, contact ExactHire today.

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