Avoid using applicants’ credit and criminal histories: pt. 1

A recent panel of private and EEOC employment attorneys addressed members of the New Jersey business community about hiring practices. Their discussion focused on two potential minefields that may cause legal problems in the hiring process: applicants’ criminal backgrounds and/or credit histories.

While Title VII does not explicitly bar discrimination on the basis of credit or criminal history, using such information to make hiring decisions – or asking for the information at all – could leave employers vulnerable to litigation.

Employers may not have policies that have a “disparate impact” on members of a certain race, age, national origin or other protected class. Studies have shown that asking if an applicant has a criminal record has a severe disparate impact on blacks and Latinos. And an arrest record is not proof that any criminal activity actually took place.

The panel recommended that employers not ask about an applicant’s criminal history until they extend a job offer. In addition, considering such history on a case-by-case basis may be helpful to make sure your final employment decision is justified.

They also touched on the dicey legality of using credit history to make hiring decisions for certain positions. We’ll discuss that next week, as well as some of the ways that employers can avoid legal action by implementing fair policies.

If you are unsure about your rights and limitations as an employer in the hiring process, it may be wise to speak with someone who can offer some guidance. An experienced business and employment law attorney can work with you to advise you of what’s appropriate and how to avoid any legal pitfalls.

Source: NorthJersey.com, “Using criminal records, credit ratings is risky business in hiring,”

Linda Moss, Jan. 22, 2013

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