Tabooed questions, second chances, sanity evolving the hiring vetting process
The nonprofit’s newly-hired director of accounting was working late on a Friday. He had been brought on quickly, after several unexpected resignations left the finance department shorthanded. In the rush to fill the position, his hiring process had not included a felony background check.
Working in the office with him, five cubicles and one office away, was a senior art director. She was pressing to finish a brochure before going home to her kids. The two were the only members of the organization still on site.
Monday morning found the senior art director safe and sound. The same could not be said of the nonprofit’s checking account and certificates of deposit at an online bank. They — and the accountant — had vanished.
Background checks, whether for a nonprofit or a commercial entity, can help management avoid problemaic workers. But if background checks are done in an ill-considered manner, they might cause nonprofit managers to reject qualified candidates, as well as open the nonprofit to liability or other damages.
Searches can encompass work history to some financial information (albeit on an increasingly limited basis) to character references. But the most common association is with criminal behavior. This area is also the one with the most potential hazards.
“The most common mistake… to begin process without first checking on disqualifying criteria.”
“The most common mistake made by nonprofits venturing into the use of criminal history background checks is to begin the process without first deciding on disqualifying criteria,” explained Melanie Herman, executive director at the Nonprofit Risk Management Center in Leesburg, Va. “The disqualifying criteria for a youth sports organization recruiting coaches or a fundraising organization hiring an accountant areprobably different from the criteria used by an organization that recruits ex-felons to counsel gang members or ex-offenders.”
An interviewer’s ability to ask about criminal history is also increasingly facing legal hurdles. “Ban the Box” laws, which prohibit employers from requesting an applicant indicate crime convictions (such as by ticking a yes/no box on application forms), have been enacted in several states. Some states have variations on a city-by-city basis. Some areas have no restrictions; some impose limits based on organization size; some require the background check to have specific bearing on the position being sought, some set limits on how early in the recruitment process a criminal background check can be requested; and, some limit how far back a check can go.
“Employers should be careful about checking a candidate’s background using social media.”
Recent legal developments have also curtailed the effectiveness and accuracy of background checks. In California, a 2021 ruling in All of Us or None v Hamrick removed a fair amount of identifying information, such as date of birth and driver’s license number, from superior court criminal records. In doing so, the state made accurate background checks more difficult – and that’s before considering that the state has also experienced increased delays in processing requests for background information, as well as limited the effectiveness of self-service kiosks that used to enable these searches.
These restrictions bump up against California legislation that in some cases requires nonprofits to conduct such searches. Under California bill 506, which was signed into law in September 2021, an administrator, employee or regular volunteer of a youth service organization must undergo a background check. And other industries, such as health care, financial services or any organization that deals with a vulnerable community, might have a targeted set of regulations or laws.
The U.S. Equal Employment Opportunity Commission (EEOC) issued guidance in 2012 regarding how arrest and conviction records may be used as part of background checks. In part, the EEOC’s guidance mandated that candidates with similar criminal records but different races, national origins or other protected characteristics could not be treated differently.
The guidance also stipulates that if criminal record exclusions disproportionately screened out people of a particular race or national origin, the employer would have to show the exclusions were “job related and consistent with business necessity.”
“In recent years, the EEOC and many state and local legislatures have focused on a growing body of data showing that criminal background checks, especially those that consider arrest records, might have a discriminatory impact on applicants based on race and ethnicity,” said Wendy Fischman, a partner at Potomac Law Group in Washington, D.C. “For this reason, employers should never check for arrest [without conviction] or expunged records.”
“The highest probability of finding stuff that’s important is going to be recent records in counties.”
Furthermore, the coronavirus pandemic and other factors have hampered accurate background checks, as state records might be out of date. “The highest probability of finding stuff that’s important is going to be recent records in counties where that person has recently been living,” said Chris Reed, general counsel for the Santa Cruz, Calif.-based Nonprofits Insurance Alliance.
Legal hurdles go beyond criminal background checks. Under the Fair Credit Reporting Act, applicants have to give consent before an employer can use information from consumer reporting agencies that provide financial information. Applicants also have the right to correct information revealed through financial background checks, and appeal decisions they believe are unjust.
“Combine that with the rules about these kinds of reports needing to be current and complete, and you’re at a complete loss,” Reed said. Applicants who believed they had been the subject of an inaccurate report might be able to go after an organization that had penalized them, he added.
None of these protections, however, shield an applicant who has lied on an application. “What are the critical components of a background check? Determining if someone had falsified information in terms of their employment history, or education history or if they are on a sanctions list or watch list,” explained Pamela Q. Devata, a partner at Seyfarth Shaw in Chicago, who specializes in background check compliance and litigation defense.
Employers have moved away from civil record searches because the information, such as familial matters like divorce or child support, isn’t directly relevant to a prospect’s ability to perform in a given role, according to Devata. Credit checks have been given up at some nonprofits, especially if the position is not one that involves influencing how money flows within an organization.
“The fact that someone might have poor credit is not really indicative of the fact that they are more apt to engage in criminal behavior,” Devata said. “There’s not really a correlation in terms of the history.”
“Nonprofits and private employers are giving a person an opportunity to be forthcoming, to let an employer know of something in their past — with a legally appropriate question at the right time, of course,” Devata continued.
What constitutes the right time has also changed in recent years. As Herman noted, there are more third-party companies than ever that conduct background checks, and the price has come down, which would on the surface present greater impetus for their use. But increased regulation and a heightened sense of exposure for the organization have moved nonprofits to be more cautious about when during a candidate’s progress background checks are appropriate, and in the process reduced the number of searches.
“Many employers are recognizing that screening for prior criminal history should take place at the end of a process so as not to unnecessarily dissuade people from applying for jobs,” Herman said.
“The fact that someone might have poor credit is not indicative of the fact that they are more apt to engage in criminal behavior.”
Additionally, using a third-party background check services might ameliorate some of the risk of an employer being exposed to personal information that might be prejudicial. Organizations are usually given the equivalent of a “green light/yellow light/red light” rating of a candidate from third-party services that doesn’t give too much detail about why a candidate might be unsuitable.
Nonprofit managers can often dictate to these services terms what might be acceptable in certain circumstances: a candidate for a financial position who has a non-financial felony record doesn’t have to be automatically rejected, if the nonprofit specifies. Additionally, third-party organizations have in place processes by which, when required by law, a candidate is notified about disqualifying conditions and given a chance to contest them.
Criminal and fiscal record searches have myriad privacy pitfalls, but surely a candidate’s social media presence is fair game for background research, right?
Wrong.
“Employers should be careful about checking a candidate’s background using social media,” Fischman said. “They might learn personal information about the employee’s religion, disability, family obligations or other protected characteristics that could support a discrimination claim. The more they learn about a candidate’s personal background, the more likely it might be for unconscious bias to contaminate the decision-making process.”
Even something as seemingly innocuous as political party preference can be a tripwire: For instance, discrimination based on political affiliation is prohibited in Washington, D.C.
Social media also comes with a possibility of someone compromising an online account. “The authenticity of the matching is really important, which is why we generally recommend that if someone is going to utilize social media they do so by utilizing a background checking company,” Devata said.
Some nonprofit leaders might wonder whether the move toward working from home, whether exclusively or in a hybrid model, has changed the need for background checks. The answer is a rock-solid, it depends. “Employers have said, ‘This person is going to be in their home. They’re going to be using, potentially, their own property. It’s less crucial that I [use] these checks,” Devata said.
Given all the caveats that apparently come with background checks, it might seem that foregoing them would make sense. And in a time of the “Great Resignation,” when organizations might suddenly find themselves with multiple job openings, anything that streamlines the hiring process would seem to be welcome.
“Employers who are eager to hire might be tempted to skip background checks in an effort to fill vacancies,” Fischman said. “This might not be a bad thing, if background checks are not necessary for those positions in the first place. But employers should make intentional decisions about their screening practices, and avoid shortcuts for high-risk positions in particular.”
