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New rules set on background checks for job seekers

Updated at 7 p.m. ET: Federal regulators Wednesday approved new rules that could make it easier to find work for convicted criminals and others who have gotten into legal trouble.

By a 4-1 vote, the Equal Employment Opportunity Commission approved the rules for employers who use criminal background checks, calling for careful consideration of how and when such reviews can be used in pre-employment screenings and in the workplace because of their potential to be biased against certain groups, such as racial minorities.

“The new guidance clarifies and updates the EEOC’s longstanding policy concerning the use of arrest and conviction records in employment, which will assist job seekers, employees, employers, and many other agency stakeholders,” said EEOC Chair Jacqueline Berrien.

The changes are seen as a boon for workers who have been unable to land jobs or have lost jobs because of their criminal histories.

“This is a major change for the good in how employers review prospective employees,” said Samuel Miller, a labor attorney who has litigated criminal background suits on behalf of employees.

“It creates presumption that consideration of criminal history is illegal,” he explained. “And it is backed up by thorough documentation of racial disparities. So it should be given much more credence by employers and judges.”

Earlier this year Pepsico’s Pepsi Beverages unit settled charges of hiring discrimination related to its criminal background check policies.

The company was using arrest records and convictions to deny job applicants positions, but the EEOC suit charged the practice impacted minority employees disproportionately and as a result was illegal under the nation’s labor laws.

The new 55-page document, intended to prevent racial and ethnic discrimination, calls on employers to use criminal background checks only when they can show they are job-related and necessary for the business. For example, the guidelines say employers should consider the "nature of the crime, the time elapsed and the nature of the job."

The guidelines also caution that "arrests are not proof of criminal conduct" and may not be sufficient to exclude a candidate.

The EEOC acted  in part because blacks and Hispanics are far more likely to get caught up in the legal system. Given current incarceration rates, about one in 17 white men are likely to serve time in prison during their lifetimes, compared with one in three African-American men, the agency said.

Employer advocates were pleased the EEOC did not entirely bar the use of criminal background checks.

“The new guidance may require employers to tweak existing policies, but is largely a collective restatement of the EEOC's longstanding guidance documents on employer use of criminal background checks,” said Katharine Parker, an employment attorney for Proskauer.

The EEOC does not have the authority to ban “all uses of arrest or conviction records or other screening devices,” said EEOC spokeswoman Christine Nazer. “The EEOC simply seeks to ensure that their use are undertaken carefully to ensure that employment opportunities are not denied inappropriately.”

To that end, she added, the new guidance from the EEOC:

  • Focuses on criminal record screening and employment discrimination based on race and national origin. 
  • Discusses the differences between the treatment of arrest and conviction records.
  • Reviews the disparate treatment and disparate impact of such reviews. 

Criminal background checks have become increasingly popular in the last few years partly because technology has made it easier to dig up dirt and partly because hiring managers want any tools to help them weed through the many applicants, given the tight labor market.

Once upon a time, employers only used such background reviews for workers who were in sensitive positions where they handled money or worked with children. Today, their use has become widespread no matter what the gig. About 73 percent of employers use criminal background checks on all employees, according to the most recent data from the Society of Human Resource Management.

The update to the rules has been a long time coming for employee advocates.

“The last guidance was written before anyone even knew what the Internet was, and a criminal background check was rarely used because it required so much personal attention to detail,” said Nancy Zirkin, executive vice president of The Leadership Conference on Civil and Human Rights. “This update reflects the reality of a 21st century workplace, where background checks are widely performed and applicants are thoughtlessly denied en masse.”

But companies view such screenings as necessary to keep the workplace safe, fight against theft and also to protect against negligent hiring suits, said Angela Bosworth, vice president of compliance and general counsel for EmployeeScreenIQ, a third-party employee screening firm.

“Right now, employers are trying to build up their workforces as the economy turns around and they’re able to hire again, but we’re concerned this will create a barrier,” she explained. “It’s going to muddy the waters on what employers can and can’t do.”

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