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How to Develop a Compliant Criminal Background Check HR Policy

Any employer that conducts criminal background checks throughout their hiring process should create and implement a criminal background check policy.  This policy will enable your Human Resources department to be consistent when making hiring decisions and will ensure all screening procedures comply with any local, state or federal employment laws.  When hiring and screening is only done sporadically and hiring managers are not provided with guidance, mistakes may be made resulting in violations of local or state laws.  A company-wide policy on criminal background checks that sets forth a clear and understandable screening policy will not only protect employers from potential legal liability, but will also help to create a positive experience for potential new hires and your hiring managers.

When drafting a criminal background check policy that will be applicable across the organization as a whole, the scope of the policy must first be defined.  This will help to lessen the risk of hiring bias, negligent hiring and discrimination.  The scope of the policy should be able to answer the following questions in order to develop the best-fitting practices for your hiring staff:

  1. Will the background checks be specific to departments, jobs, or particular roles?

  2. What department-specific needs must be included in the policy?

  3. What type of screening is required per job or department?

  4. Should hiring managers conduct the background check pre-offer or post-offer?

  5. Which agency should hiring managers use to conduct background checks?

  6. Which, if any, criminal background activity will automatically disqualify candidates from employment with the company or employment for particular jobs?

  7. Will the company conduct background checks on current employees?

A criminal background check policy must also set forth the obligations employers have prior to running any type of background check on job applicants or current employees.  For example, employers must obtain written authorization and consent from the applicant or current employee prior to running any criminal background check.  To conduct a background check without first providing notice to the applicant or employee is illegal under New York and federal law.  Under The Fair Credit Reporting Act (FCRA), a federal law, employers must provide a “clear and conspicuous document” to candidates to authorize the employer to conduct a background check that is separate from the job application.  The form must be separate from the job application in order to ensure that the candidate clearly knows he or she is authorizing the company to conduct a background check.  The form will provide an explanation of the types of screenings that will be done and will include space for the candidate to provide personal information such as their address, birth date and social security number.  The form must also inform the candidate that any information retrieved from the screening can influence the employer’s decision to hire, promote or terminate the candidate.  New York also requires that the notification inform the applicant that: (i) the background check may be requested from a reporting agency, and (ii) that the applicant may be notified whether or not the background check was requested, and if it was requested, that the applicant will be informed of the name and address of the reporting agency providing the background check.  This is because applicants are legally entitled to review their background checks since background checks may contain inaccuracies or omissions.

In order to ensure a criminal background check policy complies with the law, the policy should clearly provide the types of information that may be reported in a background check.  In New York, background checks may not contain any arrest records or charges filed against the applicant or employee unless the charges are pending when the background check is conducted.  If the applicant is seeking a position with an annual salary of less than $25,000, the background check may only report criminal convictions that occurred in the previous 7 years.  If the position has an annual salary equal to or greater than $25,000, then all criminal convictions may be reported.  A background check may also not include any non-criminal convictions regardless of how long ago they occurred.

Employers must also include in this policy a section explaining how criminal background reports should be interpreted to impact hiring, promotion, or termination decisions.  This section should also include what federal and state laws require employers to do when making an adverse employment decision based on the background check report.  Below we provide what is required of employers under the FCRA and New York State law.

Under the FCRA, prior to taking any adverse employment action based upon information contained in the background check: (i) the employer must provide a written pre-adverse action notice explaining its intent to take adverse employment action to the applicant or employee, (ii) the employer must provide the applicant or employee with a copy of the document titled “A Summary of Your Rights Under the Fair Credit Reporting Act,” and (iii) the employer must also provide the applicant or employee with contact information of the agency or company that conducted the background check.  Then the applicant or employee must be afforded a “reasonable time” to correct or dispute any information that is incorrect in the report or further explain any information contained in the report.  After the employer takes an adverse employment action, the employer must provide the applicant or employee with a copy of the background check report and a second notice: (i) containing the contact information of the agency or company that conducted the background check, (ii) stating the agency or company that conducted the background check did not make the employment decision, (iii) stating the applicant or employee has a right to dispute the accuracy of the information contained in the report, and (iv) a notice of the applicant or employee’s right to receive an additional free report from the provider within 60 days upon request.

An employer merely complying with the FCRA can still violate New York law.  In New York, employers cannot simply deny an applicant employment due to previous criminal convictions.  The New York State Human Rights Law (NYHRL) prohibits employers from discriminating on the basis of an applicant or employee’s prior conviction unless (a) there is a direct relationship between the offense and employment sought; or (b) if employment of the applicant or employee would impose an unreasonable risk to property or the safety or welfare of others.  Article 23-A of the New York Correction Law requires employers to consider the following 8 factors when determining if employment should be denied based on past criminal convictions:

  1. The responsibilities and duties related to the position sought or held.

  2. The effect, if any, the criminal conviction has on the applicant’s or employee’s ability to fulfill the primary responsibilities and duties of the job.

  3. The seriousness of the offense.

  4. How old the applicant or employee was when he or she was convicted.

  5. The amount of time that has passed since the applicant or employee committed the criminal offense.

  6. Any information the applicant has produced, or was produced on the applicant’s behalf, regarding his or her good conduct and rehabilitation.

  7. The interest in protecting property, and the welfare and safety of specific individuals or the general public.

  8. The state’s public policy to encourage employing individuals previously convicted of criminal offenses.

If a hiring manager decides not to offer the applicant the position or to terminate the employee’s employment after all 8 factors above were taken into consideration, in addition to the FRCA notification requirements, employers must provide the applicant or employee with a copy of Article 23-A of the New York Corrections Law when the report contains information regarding a criminal conviction.  The applicant or employee is entitled to request a written statement setting forth the reasons for this denial and employers must provide this statement within 30 days of the applicant’s or employee’s request.

Employers should also be sure to include and explain the requirements of local laws regarding criminal background checks, such as the New York City Fair Chance Act, if applicable.

By implementing a criminal background check policy, employers can stay compliant with federal, state and local laws, and can ensure a consistent hiring, promotion, and termination process is applied across the entire company.


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