Hiring Qualified Candidates: New Regulations Make it Hard to Weed Out Unqualified Candidates

By: Drew M. Smith

Increased state and federal regulations are making it harder for companies to find the best candidates, and to weed out unqualified ones. Each week, more and more regulations are issued, limiting an employer’s ability to ask questions or require information of potential candidates.

Most companies require job applicants to complete an application, and others will require background checks. New regulations issued in New York and other states and cities are making it increasingly difficult for employers to ask questions about a prospective employee’s background. Recent legislation, coined as “Ban the Box,” has been passed where the box that requests information on criminal history be removed on discrimination grounds.

Sometimes information on an application or a background check brings to light information on criminal history; information that may ultimately lead to an applicant being rejected for a job. Some information requested in a job application that may prove troublesome and that could influence an employer regarding political, race or gender related issues include:

• Age: Someone may list an incorrect age, more often a younger age because of potential age discrimination. Employers may look more favorably on younger employees.
• Criminal Background: This is often not checked especially if an applicant has been convicted of a felony. The focus of the “Ban the Box” movement concerns the severity of Felonies and their impact on employment.
• Credit Report: A false credit report could indicate potential fraud or inability to hold a job. Bad credit could potentially influence an employer as to how reliable an applicant may be.
• Access to Social Media Accounts: What a person says reflects a company. If they do not allow access to their accounts, they might be hiding something that could impact your company.
• Years Working: Similar to the age rule, putting too many or too few years of work experience could also give away your age.

According to federal regulation, “Any background information you receive from any source must not be used to discriminate in violation of federal law. This means that you should:

• Apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older). For example, if you don't reject applicants of one ethnicity with certain financial histories or criminal records, you can't reject applicants of other ethnicities because they have the same or similar financial histories or criminal records.
• Take special care when basing employment decisions on background problems that may be more common among people of a certain race, color, national origin, sex, or religion; among people who have a disability; or among people age 40 or older. For example, employers should not use a policy or practice that excludes people with certain criminal records if the policy or practice significantly disadvantages individuals of a particular race, national origin, or another protected characteristic, and does not accurately predict who will be a responsible, reliable, or safe employee. In legal terms, the policy or practice has a "disparate impact" and is not "job related and consistent with business necessity."¹

While background checks can find flaws in an application, some states aren’t so keen in allowing employers access to this information right away. The so-called “Ban the Box” campaign in these states is the result of people wishing to reduce the rate of disparate discrimination in the work place. Their belief is that requiring information about criminal histories and backgrounds in the application process are unfairly discriminating against specific groups, those groups with a penchant to commit crimes. What several states and cities have done is require employers to remove the box that requests information for a background check, and instead moving it until after the job is offered and then making an assessment from there. In New York, the Fair Chance Act does not specifically ban background checks. Rather, it makes it so that if a background check turns up a criminal offense, the employer can sit down and discuss whether the conviction should bar them from employment i.e. someone convicted of child molestation can’t work at a school. This act provides those with prior convictions more of a chance to get decent job.²

While, in theory, this is a good way to make more applicants available for a job, some economists believe that such policies have an opposite effect. They believe employers would engage in statistical discrimination. This discrimination occurs when, instead of using background checks to determine if an applicant, they go with the groups less likely to commit crimes. One study from Princeton economist Amanda Y. Agan conducted a blind study where she sent fake applications to employers with and without the box on the application. The study showed that in applications with the box, blacks received near equal amount of callbacks, about 7% less than whites. Without the box, that disparity shoots up to 45% less callbacks than whites.³

Background checks are in place to find the right person to work with your staff. Doing it correctly means you pick them without discrimination and with a relatively clean record. But in areas where having this box is illegal, it’s hard to do so without leaving out groups of qualified people. Follow the correct laws for the jurisdiction you are in. Protect yourself with EPLI insurance in cast you are inadvertently discriminate.

¹https://www.eeoc.gov/eeoc/publications/background_checks_employers.cfm
²http://newyorksealinglaw.com/2014/06/everything-you-need-to-know-about-ban-the-box-in-new-york/
³https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2795795