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3 Myths About Employing People With Criminal Histories

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Stephanie R. Thomas, hosts “The Proactive Employer Podcast“, which is a weekly broadcast dedicated to EEO compliance and employment litigation risk management.

Last week she reported on the myths about employing people with criminal histories.

Here’s a recap of the podcast:

Each year, more than 700,000 people are released from federal and state prisons, and another 9 million cycle through local jails. Federal agencies are funding reentry efforts in communities all around the country, and the Obama administration is working across agencies to coordinate and advance efforts through the Federal Reentry Council.

Part of the reentry process is finding employment.

In this installment of The Proactive Employer Podcast, Stephanie talks about what the Federal Reentry Council is doing to assist with employment efforts. She talks about three common myths regarding employment of individuals with criminal backgrounds and she also covers common questions regarding employee background screening.

THE MYTHS

MYTH #1 : People with criminal records are automatically barred from employment.

MYTH #2: Businesses and employers have no way to protect themselves from potential property and monetary losses should an individual they hire prove to be dishonest.

  • FACT: Through the Federal Bonding Program (FBP), funded and administered by the U.S. Department of Labor (DOL), fidelity insurance bonds are available to indemnify employers for loss of money or property sustained through the dishonest acts of their employees (i.e., theft, forgery, larceny, and embezzlement).
  • Get the Myth Buster fact sheet (PDF).

MYTH #3: The Federal Government’s hiring policies prohibit employment of people with criminal records.

Need help in sorting out the facts from myths about employee background checks? Give us a call at 1-800-809-2419. We’d love to hear from you.

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New Hampshire to Reorganize Court System

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News reports this week confirmed rumors that New Hampshire plans to reorganize their court system, eliminating approximately 60 court clerks. The money saving effort, will see many clerks dismissed or demoted. In their place, New Hampshire plans to adopt a “circuit court system” with the remaining clerks managing more courts. If passed by the legislature, the reorganization will go into effect on July 1, 2011. New Hampshire’s court system has not reported whether delays are expected as a result of the reorganization.

Read more here.

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The Challenges of Background Check Compliance for Employers

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Littler Mendelson’s Privacy & Data Protection Practice Group just published an excellent article highlighting the challenges of background check compliance for employers:

New California Law Illustrates Challenges of Background Check Compliance for Employers

“Background checks seem to be a hot topic in state legislatures these days. In the past six months, for example, several states — including Illinois, Massachusetts, Oregon, and most recently California — have enacted laws bearing upon the process of checking the backgrounds of job applicants and employees. Under the new California law (pdf), effective January 1, 2012, background check authorizations must include the “Internet Web site address . . . where the consumer may find information about the investigative reporting agency’s privacy practices.” This seemingly trivial change is endemic to the challenges that employers confront in the area of background check compliance.”

Read more…

Smart, Compliant Hiring Decisions Made Easy

FYI Screening can help your company navigate the compliance maze. You’ll feel confident that you’re using the most up-to-date, accurate information available to ensure a safe and compliant environment for your workforce and customers.

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Possible Amendment to Fair Credit Reporting Act – Ban Employers’ Use of Credit Checks

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Seyfarth Shaw LLP, one of America’s leading full-service law firms, reported Senator Dianne Feinstein of California recently introduced SA 3795 as an amendment to the  Fair Credit Reporting Act.

“Senator Feinstein’s bill proposes to restrict an employer from using a “consumer’s creditworthiness, credit standing, or credit capacity” in making any employment decision or for the basis of taking any adverse action—regardless of whether a consumer gives an employer consent to use such information.

The only exceptions to this prohibition would be for:

1) national security or FDIC clearance;

2) employment with state or local government agency which requires the use of this information;

3) employment in a management position with access to customer funds at a financial institution; or

4) as otherwise required by law.”

Read More

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Another State Restricts Use of Credit Reports in Employee Background Screening

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On March 29, 2010, Oregon Governor Kulongoski signed legislation (S.B. 1045) that specifically prohibits employers from using credit history in making hiring, discharge, promotion, and compensation decisions unless the applicant or employee is given advanced written notice and the credit history is substantially job-related. Although the proposed legislation was to be effective July 1, 2010, the Governor declared the legislation effective immediately.

Oregon joins Washington and Hawaii as one of three states that have effectively banned workplace credit checks. There is also pending legislation in Illinois that recently passed the House of Representatives, which would impose similar restrictions. This trend underscores the importance of employers being aware of state law restrictions pertaining to credit and background checks,  particularly in multistate businesses.

There are four exceptions to the Oregon law:

  1. Bank and credit union employers
  2. Employers that are required by state and federal law to use credit histories for employment purposes
  3. Public safety officer employers
  4. Employers that can demonstrate that credit information is “substantially job-related” and that provide written disclosure of the reasons for the use of the credit check

The statute does not further define what “substantially job-related” means, nor has the Oregon Bureau of Labor and Industries (BOLI) adopted rules to inform employers on how it will be applied.

In the absence of clear rules or guidance from BOLI, employers that intend to continue utilizing credit histories after March 29th, 2010, should proceed with caution and consult legal counsel to determine whether they fit into one of the statute’s exceptions. If they do not fit within an exception, employers should develop alternatives to current practices to avoid penalties and civil liability. A violation of the new law is an unlawful employment practice, and an aggrieved individual can file a complaint with BOLI and a civil lawsuit for injunctive relief, reinstatement or back pay, and attorney’s fees.

Compliance steps for Oregon Employers:

  • Do not run credit reports for employees or applicants, unless your company fits into one of the four exceptions.
  • Seek counsel to determine if credit information is “substantially job-related.”
  • You can still run other types of background checks (criminal record searches, employment and education verifications, etc.) as you did before this law.

Sources:  Seyfarth Shaw, Davis Wright Tremaine LLP

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