Trends in Background Checks for 2014

Given the litigation climate and potential employer liability for workers’ actions, including lawsuits for negligent hiring, employers need to be more careful than ever in choosing employees.

Just one bad hire can set off a legal and financial firestorm if the person is dangerous, unfit, unqualified or dishonest and a background check would have raised a red flag. At the same time, employers also need to recognize that applicants have substantial legal protections and the whole area is subject to ever-increasing litigation, regulation and legislation.

In 2014, employers and human resources professionals can expect to see the tension between the need to hire safely and the legal protections afforded applicants played out in a number of areas. Here are 10 trends in background checks employers may see in the coming year that are critical to both keeping the workplace safe and avoiding legal entanglements.

1. Ban the box will continue to pick up momentum.
The “ban the box” movement is quickly heading toward becoming a national standard and will be a hot issue for employers in 2014. The approach eliminates any questions about past criminal conduct in the initial job application to help get ex-offenders in the workforce. The box refers to where an applicant is asked to answer “yes” or “no” about a criminal past.

The idea is that asking about criminal records upfront serves as a potential early knockout punch for ex-offenders who may otherwise be qualified. The ban-the-box approach allows applicants to compete on an even playing field based on their qualifications. It also prevents ex-offenders from being deterred from applying for jobs since they may assume their application will go straight into the trash if they answer honestly.

Ban the box does not mean pedophiles will supervise playgrounds or bank robbers will handle the cash drawer. At an appropriate time during or after the interview, employers are still free to ask appropriate questions about past criminal conduct and conduct background checks.

A number of states and counties have moved to a ban-the-box approach to public employment, joined by California and Illinois in 2013. Some jurisdictions such as Hawaii, Massachusetts and Minnesota have extended the rule to private employers as well. National retailer Target announced it would roll out ban the box nationwide. Many employers are finding little value in asking the criminal question upfront, and feel that standard review processes to whittle down the applicant pool based on qualifications are more effective and pose less legal risk.

2. The EEOC guidance on criminal records will become a core concern for HR.
Another impetus behind ban the box is the new guidance on the use of criminal records in hiring decisions issued by the U.S. Equal Employment Opportunity Commission, or EEOC, on April 25, 2012. The guidance has the potential to affect the hiring processes of every U.S. employer.

Although it is not a law or legally enforceable regulation, it is critical for employers to understand the guidance since it shows how the EEOC interprets the use of criminal records. The commission continues to investigate and bring lawsuits on the basis that the use of criminal records without consideration of whether the record is job-related and its use constitutes a business necessity can create a discriminatory disparate impact on groups protected under Title VII of the Civil Rights Act.

The guidance expands on existing EEOC positions stating that an employer needs to consider the nature and gravity of the offense, the nature of the job and age of the offense. The EEOC also recommends that private employers follow ban the box.

When a question is finally asked about a criminal record at or after an interview, the EEOC recommends that employers narrow the inquiry to avoid matters that are old or irrelevant. The guidance reiterated the rule that the mere fact of an arrest is not relevant since it does not prove underlying conduct. Many states already have rules preventing employers from inquiring about or considering an arrest where there was no conviction or pending court case.

Another EEOC recommendation was a new tool called an individualized assessment, where an applicant rejected because of criminal records receives one last opportunity to either question the accuracy of the record or provide a reason why he or she should still be a candidate. That notice can be provided in conjunction with the adverse action notifications required under the federal Fair Credit Reporting Act, or FCRA. The EEOC guidance can be found at

3. The use of commercial criminal databases and cheap do-it-yourself websites will diminish as employers face more risk.
Part of the drive behind the EEOC guidance was a concern about the accuracy of criminal records. Given the millions of background checks done by the screening industry, the number of complaints is extremely small. However, just one inaccuracy can cost someone a job and lead to litigation. A group of background firms has adopted as a best practice that all criminal information must be confirmed as being accurate and up-to-date before being provided to an employer, since information that comes from a commercial criminal database is subject to errors.

These databases are not an official collection of criminal records, but instead are gathered from a variety of available sources, meaning there are issues as to completeness, coverage and accuracy. Although it is a valuable tool for a background screening firm to locate additional courts to search, database information in the hands of employers can lead to both false positives (where a person is falsely accused of having a criminal record) and false negatives (where a person with a criminal record is marked as clear).

Members of a group called Concerned CRAs — consumer reporting agency is the term for a background screening firm under the FCRA — have agreed to verify any information discovered in a criminal records database directly with the reporting jurisdiction. (Editor’s note: the author’s firm is a co-founding member of Concerned CRAs.)

A related issue is the use of do-it-yourself online criminal searches by employers. The problem is that these same potentially inaccurate databases are used and employers may not be advised of the legal requirements for a background check, including applicant consent and adverse action notices.

4. Lawsuits for failing to conduct proper checks or failing to do them correctly will become more prevalent, including class-action lawsuits.
Given the need for employers to exercise due diligence in hiring and at the same time comply with the complex legal environment regulating hiring, employers can expect to see an increase in legal actions in 2014.

The number of class-action lawsuits against both employers and background firms that fail to comply with the FCRA is increasing, as employment attorneys are becoming more familiar with the FCRA and background checks. Conversely, lawsuits for negligent hiring against an employer that fails to demonstrate due diligence in hiring or does an inadequate background check also are a concern. When a class-action is brought, the potential exposure — not to mention legal fees — can be enormous.

5. The use of accredited screening firms will pick up steam.
The National Association of Professional Background Screeners, or NAPBS, is the nonprofit voice of the screening industry (Editor’s note: The author helped found NAPBS and has served as its co-chairman). It has introduced an accreditation program for best practices for screening firms that are confirmed by an on-site independent auditor.

Given the increasingly complex legal environment, and the focus by the EEOC on the accuracy of criminal records, employers in 2014 will be faced with the challenges of ensuring that a background screening provider uses best practices, is in compliance with the FCRA and applicable state laws and is accurate.

Since background firms are largely unregulated, employers face a challenge in choosing a screening firm. Although federal agencies are charged with some oversight of background checks and some states have licensing rules, anyone can set up an office and website and claim to be a background-checking firm. Accreditation is one way to ensure an employer is dealing with a knowledgeable professional.
6. Offshoring and ID theft will emerge as important factors for employers.
With increased media focus on identity theft, employers are under increased pressure to protect the personal identifiable information, or PII, of job applicants. One area where employers may need to examine their processes in 2014 is protecting PII when it comes to background checks.

If a screening firm offshores information to processing centers beyond U.S. privacy laws, an employer may want to examine if that is consistent with its own approach to privacy. Part of the best practices endorsed by Concerned CRAs is to avoid offshoring PII of U.S. consumers. It is also crucial for employers to ensure a screening firm has sufficient security and data protections in its operations, which is covered by NAPBS accreditation rules. The use of home-based workers also can raise security concerns.

7. Social network searches will diminish as a tool for background checks, but will grow for purposes of recruiting and sourcing.
No conference on recruiting or talent is complete without a number of sessions on the use of social networking for sourcing, recruiting and employer branding. A hot topic in past years also was the use of the Internet to help with employee selection through background checks. It appears that this trend is fading fast for a number of reasons.

A number of states have passed or are considering laws that prohibit an employer from requiring an applicant to hand over a consumer social networking password, or to insist on “shoulder surfing,” meaning the applicant goes online and the employer examines a website over the applicant’s shoulder.

In addition, many applicants are taking much greater precautions to hide their social networking activities behind strong password protections as they have become more aware of the risk of employers finding negative information online. Smart applicants use their cyber identities as marketing tools in their job hunt. Also, many employers have discovered that searching for relevant material online is like looking for a very small needle in a very large haystack.

In addition, employers are concerned that discovering material online could lead to lawsuits for discrimination if the search reveals such things as age, ethnicity, medical conditions, religious affiliation or similar information. Although some hiring managers may continue to look online as an informal practice, it does not appear that large-scale social media searches as a standard part of the vetting process have taken off.

8. Credit reports will continue to be in disfavor and may disappear from the hiring landscape.
Some states have placed significant limits on the use of consumer credit reports in background checking, and news reports have questioned their use for employment. In addition, the EEOC also has shown interest in whether the use of credit reports creates a discriminatory disparate impact. Employers that utilize employment credit reports are well advised to examine if the use is authorized by state law. Employers should approach the use of employment credit reports with great caution, and be on the lookout in 2014 for potential restrictions.

9. More employers will include international background check options in their hiring processes.
The use of international background checks is increasing as employers open offices outside of the U.S. and hire people who have spent time abroad. With more than 190 political entities in the world, employers cannot assume that screening internationally is the same as domestic U.S. processes. The world differs widely in terms of what information is available and what can be legally obtained.

However, more resources for international checks are being developed. Although they are challenging and take longer and often cost more than domestic checks, international background checks are becoming part of an employer’s standard arsenal.

10. Technology and integration with applicant tracking systems will decrease the time and effort needed for background checks.
Background checks have evolved from a paper-based task to an online process that can be done quickly and efficiently. In 2014, employers can expect to see more robust systems where applicants do the data entry or employers simply click a button in their applicant tracking systems and they are done. New technology is also speeding up turnaround time.

Employers, though, need to be on the alert that shortcuts are not being taken that potentially leave them exposed, such as a screening firm “screen scraping” data from a court website that is not accurate and up-to-date.

Lester Rosen is CEO of background checking firm Employment Screening Resources and helped found the National Association of Professional Background Screeners. He can be reached at