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Sep 27, 2017

You already know how difficult it can be landing the right new hire. Nailing the job description. Asking the right interview questions (and avoiding the wrong ones). Reference checking. Salary negotiations. Onboarding.

This isn’t easy work.

But do you realize how risky not hiring a candidate has become – especially after you’ve asked questions about criminal history or run a background check? Relatively few employers do. But a lack of awareness puts you at risk of lawsuits and compliance violations.

A complex web of adverse action laws

A recent survey found that 55% of employers still ask about criminal records on job applications or in interviews. If you’re among them, consider this: That single decision may violate state, county, or city ban-the-box and other fair hiring laws in many locations across the country.

You’re not off the hook at the federal level either. True, there’s no federal law against asking about criminal records. But, since 2012, though, the EEOC has made it clear that blanket bans on hiring people with criminal records violate Title VII of the Civil Rights Act of 1964. And it’s not shy about pursuing those violations in court.

Of course, there’s also the Fair Credit Reporting Act. That old standby applies no matter where you’re located. And it requires a very specific adverse action process if you decide not to hire based on the results of a background check.

In many places, all these laws and guidelines overlap – and their requirements differ.

Conflicts and additions may include:

  • Which records you can (and can’t) consider in your hiring decision
  • What pre-adverse action notices you need to send (and what they should say)
  • How long to wait after sending a pre-adverse action notice
  • Whether and how you must conduct targeted screens and individualized assessments
  • When to send a final adverse action notice and what it must include


It’s complicated. But don’t worry. I’ll explain how to navigate what each law requires you to do.

First, let’s talk about your options when you find out one of your candidates has a criminal record.

Considering candidates with criminal records

One of the top reasons employers run background checks is to determine whether candidates have a criminal record. No employer wants to be held liable for something they should have known before hiring.

For example, it may make sense for a company hiring for an accountant to turn down a candidate with convictions for embezzlement. A company hiring a driver wouldn’t choose someone whose license is suspended.

But not every criminal record disqualifies a person from every job. In fact, some industries are finding that opening their ranks to people with criminal records helps ease labor shortages.

And many employers find that people with criminal histories make loyal, dedicated employees.

That brings us to your options

1. You can decide to hire.

Let’s say the background check returns with an alert, but it’s a minor infraction. You hire the candidate. You’re all set – you don’t need to worry about adverse action rules.

2. You can conduct a “targeted screen” before you decide.

If you face an alert that requires more consideration, the EEOC recommends that you consider three factors in your decision-making:

  • The nature of the offense
  • How long ago it happened
  • The nature of the job you’re filling.

These nature/time/nature considerations, also known as the “Green Factors,” help you systematically assess the business necessity of turning down someone with this kind of record.

You might end up deciding to hire once you go through this screen. If so, you don’t need to take any additional steps.

Or, you might decide to advance to the second part of the EEOC’s recommended process, which takes us to the next option.

3. You can ask for more information, then document an individualized assessment.

In the EEOC’s individualized assessment process, you’ll ask the candidate to share some of the context around the offense, including their age at the time it occurred, what they’ve done since and any evidence of rehabilitation.

Once you’ve reviewed the context, you might decide to hire. Even in the seeming mismatch of the accountant/fraud example, you might still decide to hire a person whose conviction is many years old and who has successfully held similar accounting positions without incident.

Individual circumstances should make a difference – that’s the spirit of the EEOC guidance and the many fair-chance and ban-the-box regulations that have been passed in its wake.

Of course, you might ultimately turn the candidate down for reasons that make sense for your business and the position. If you do, you must follow the required adverse action steps.

All of them.

If you consider not hiring, get adverse action right

If background check results make you consider not hiring, you’ll need to comply with some (or all) of the following laws and regulations that govern adverse action.

Every employer that uses an employment screening service must follow the Fair Credit Reporting Act.

The federal FCRA requires employers to follow this three-step adverse action process anytime they consider denying a candidate based on background-check results:

  1. Send a pre-adverse action notice.
  2. Wait at least 5 business days so candidates can respond or correct information.
  3. Send a final adverse action notice if you decide not to hire.

FCRA-compliant pre-adverse action and final adverse-action notices must contain specific information. You can download a checklist of what to include here: The FCRA Adverse Action Checklist.

But FCRA compliance is just the beginning. An adverse action process that doesn’t include EEOC and state and local requirements leaves you exposed.

EEOC guidelines for considering criminal records apply to nearly all employers.

To prevent disparate impact on protected classes under Title VII of the Civil Rights Act of 1964, EEOC guidelines prohibit blanket bans on hiring people with criminal records.

Instead, as I explained above, the agency recommends that employers carry out a targeted screen by reviewing the nature of the offense, how long since it occurred, and the nature of the job sought.

That’s not enough on its own, though. The agency also recommends asking candidates for more information, such as:

  • Specific circumstances around the offense
  • The job seeker’s age when it occurred
  • Any new offenses committed since
  • Evidence of rehabilitation
  • Character and employment references

Ban-the-box and fair hiring laws apply in many states, counties, and cities.

More than 29 states and 150 municipalities have passed ban-the-box laws that govern when and how employers can ask about criminal records.

Many of these laws also require:

  • Specific pre-adverse action notice contents and waiting periods
  • Targeted screens
  • Individualized assessments
  • Final adverse action notices

That means much of the EEOC guidance may now be required by law in the states, counties, and cities where you hire. So be sure to check the state and local fair hiring requirements where you hire (and not just where company is headquartered).

Keep in mind that adverse action violations are increasingly common lawsuit triggers, so follow all required laws carefully.

If you hire for multiple locations

Following applicable laws is plenty hard when you hiring for just one location. (That’s especially true if that location happens to be Los Angeles, New York City, or San Francisco.)

Hiring in multiple locations ups the ante dramatically. You may need to consider state, county, and city laws:

  • Where the hiring decision is made, whether that’s at your headquarters or a field office
  • Where the candidate lives
  • Where the candidate will work

And, of course, you still need to follow the FCRA and EEOC guidelines.

Making decisions about candidates with criminal records may not be something you do every day. But you’re going to have to do it sometime, since an estimated 1 in 3 U.S. adults have some form of criminal record.

Now you know what you can do and what you’re required to do.

Take a deep breath, take a close look at the record, and really consider the whole candidate.

You might decide to hire.

But if you decide not to hire, make sure you do everything the law requires – including giving every candidate a fair chance.

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