Conducting background checks during pre-employment screening is an excellent way to help ensure an applicant is a good fit for an organization. A background check can mitigate risks during the hiring process by identifying an applicant’s criminal history, financial troubles or past misconduct that could lead to a bad hiring decision. Background checks can also create a safer workplace environment by screening out applicants with a violent, criminal history. In some cases, as will be discussed in this blog, there are positions that require a background check before hiring.
Improperly conducting background checks, however, can lead to costly problems for employers. Most states have laws pertaining to how and when background checks can be performed if at all, what employment actions may be taken after a background check and notification requirements when adverse employment actions are taken because of a background check. Employers must also comply with federal laws such as the Fair Credit Reporting Act which has specific notification requirements pertaining to background checks. Here is a summary of background check employment laws in D.C., Maryland and Virginia, the FCRA requirements and best practices to help employers stay compliant. This blog is for informational purposes only and should be not be used in lieu of advice from legal counsel.
D.C. Background Check Laws
The Fair Criminal Records Act (FCRA) of 2014
The FCRA, enforced by the D.C. Office of Human Rights, applies to private employers with at least 11 employees and is a “ban the box” law that forbids employers from inquiring about an applicant’s criminal history until after the employer has made a conditional employment offer. Ban the box laws, also known as “fair chance laws,” aim to reduce stigma and increase access to employment for people with arrest or conviction histories. Prior to a conditional offer of employment, D.C.’s FCRA law specifically prevents employers from asking questions, or engaging in conduct intended to elicit information about, an applicant’s: (1) arrest record, (2) charges or criminal accusations (which are not pending at the time of the inquiry), or (3) convictions.
After an employer makes a conditional offer of employment, the employer may ask only about criminal convictions and can only withdraw that offer for a “legitimate business reason.” The decision to withdraw the offer must be reasonable considering:
- The duties/responsibilities of the position;
- The nature of the criminal conviction in light of those duties;
- The time elapsed since the criminal activity occurred;
- The age of the applicant when the criminal activity occurred;
- The frequency and seriousness of the crime; and
- Any evidence of rehabilitation provided by the applicant.
Where an offer is withdrawn, an applicant may request, within 30 days:
- A copy of all records considered by the employer during the application process; and
- A notice advising the applicant of his/her rights to file a complaint with The Office of Human Rights.
The Act does not provide a private cause of action to an aggrieved person, but an employer can face costly penalties for violations as follows: A maximum of $1,000 for employers that employ 11 to 30 employees; $2,500 for employers that employ 31 to 99 employees; and $5,000 for employers that employ 100 or more employees. If the Office of Human Rights determines that an employer has engaged in an unlawful discriminatory practice, the Office may require the employer to hire, reinstate, or promote the complainant, and award back pay, compensatory damages, and reasonable attorney fees.
The Fair Credit in Employment Amendment Act
The Fair Credit in Employment Amendment Act, also enforced by the D.C. Office of Human Rights, took effect on March 17, 2017, and states D.C. employers may not:
- Require, request, suggest or cause any employee or applicant to submit any credit information;
- Use, accept, refer to or inquire about credit information, unless an exemption from the law applies; or
- Take any discriminatory action against prospective and current employees based on their credit information.
The Act prohibits employers from obtaining credit information on job applications, in background checks, in interviews, or at any point during the employment relationship. The Act defines “credit information” as “any written, oral, or other communication of information bearing on an employee’s credit worthiness, credit standing, credit capacity, or credit history.” The Act defines “inquire” as “any direct or indirect conduct intended to gather credit information using any method, including application forms, interviews, and credit history checks.”
The Act does not apply in the following circumstances:
- Where DC law requires an employer to obtain an employee’s credit information;
- Where an individual applies for, or is employed as, a police officer with the Metropolitan Police Department, as a special police officer or campus police officer, or in a position with a law enforcement function;
- Where credit information has to be provided to the Office of the Chief Financial Officer of D.C.;
- Where an employee must have a security clearance under District law, however in some instances federal law may preempt D.C. law;
- Where D.C. government employees have to provide disclosures to the Board of Ethics and Government Accountability, or to the Office of the Inspector General;
- Where the job position would require the employee to access personal financial information, such as when employed in financial institutions; or
- Where an employer is following a lawful court order or cooperating with a law enforcement investigation.
Violations may result in penalties ranging from $1,000 to $5,000, based on the number of violations. Unlike the ban the box law, applicants or employees can also pursue a claim in court.
Mandatory Background Checks in D.C.
D.C. employers should note while there are restrictions on conducting background checks in many cases, hiring for some positions requires them. Healthcare facilities hiring unlicensed healthcare workers who will have direct contact with patients must conduct criminal background checks before hiring applicants. Employers may not employ unlicensed healthcare workers with convictions for any of the following crimes in the past seven years:
- Arson
- Burglary
- Assault and battery
- Kidnapping
- Robbery
- Theft
- Forgery/fraud
- Illegal use or possession of a firearm
- Sexual abuse or assault
- Child abuse
- Possession with intent to distribute a controlled substance
Employers hiring applicants to work with children ages 12 and under or youth ages 13 – 17 must complete criminal background checks. This requirement also applies to volunteer applicants and covers all public or private agencies providing services to children. If the position requires the applicant to transport children, the employer must also conduct a motor vehicle records check.
D.C. also requires mandatory background checks for Department of Corrections workers, and employers must conduct ongoing criminal background checks on current employees every two years.
Maryland Background Check Laws
Fair Criminal Record Screening Standards Law
Maryland’s ban the box law is enforced by The Maryland Office of Human Rights and took effect on February 29, 2020. Under the Act, employers with at least 15 full-time employees may not, before the first in-person interview, require an applicant to disclose whether the applicant has a criminal record or has had criminal accusations brought against the applicant. The Act applies not only to traditional employment, but also more broadly to “any work for pay and any form of vocational or educational training, with or without pay,” including contractual, temporary, seasonal, or contingent work, and work assigned through a temporary or other employment agency. Notably, different from some other ban the box laws that prohibit asking about an applicant’s criminal record at any time before a conditional offer of employment is made, the Act only prohibits such inquiries before the first in-person interview. Penalties for non-compliance may be assessed of up to $300 per applicant.
Employers in Montgomery County, Maryland are subject to a more restrictive ban the box ordinance that prohibits criminal history inquiries until after the first interview. The statewide law allows such inquires during a first interview. Employers in Montgomery and Prince George’s Counties are required to provide pre- and final adverse action notices to applicants when the employer intends to withdraw a conditional offer of employment based on the applicant’s criminal history.
Virginia Background Check Laws
On May 21, 2020, a bill was passed decriminalizing simple possession of marijuana. Additionally, the law prohibits employers from requiring job applicants to disclose any information regarding an arrest, criminal charge, or conviction for simple possession of marijuana, and the new law gives applicants a statutory right to refuse to answer any questions or provide any information concerning any such arrest, criminal charge, or conviction.
Fair Credit Reporting Act (FCRA)
In addition to state ban the box laws, employers must also comply with the restrictions on background checks contained in the FCRA which applies to any third-party consumer or investigative report that bears on an individual’s creditworthiness, character, general reputation, personal characteristics, or mode of living, when such information is collected for employment purposes. Background screening reports are “consumer reports” under the FCRA when they serve as a factor in determining a person’s eligibility for employment. Before taking an adverse employment action (e.g., not hiring an applicant), the FCRA requires employers to:
- Provide the applicant a notice that includes a copy of the consumer report the employer relied upon when deciding to take an adverse action; and
- Provide the applicant a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.”
After taking an adverse employment action, employers must notify the applicant or employee (orally, in writing, or electronically):
- That he or she was rejected because of information in the report;
- The name, address and phone number of the company that sold the report;
- That the company selling the report didn’t make the hiring decision, and can’t give specific reasons for it; and
- that he or she has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the reporting company within 60 days.
Best Practices
To ensure compliance with local, state and federal laws affecting an employer’s ability to conduct background checks, employers should:
- Determine the legal restrictions in each county and state in which the employer conducts business.
- Ensure all recruiting and hiring procedures are compliant. This requires a thorough review of all job applications and postings, offer letters, interview questions and onboarding forms to ensure no illegal questions are asked.
- Ensure the presence of all required background check disclosure forms, written notices and any other documents required for compliance.
- Train managers on what can and cannot be asked during the interview process before and after a conditional offer is made and whether there are notification requirements should an adverse employment action be taken because of arrest and conviction information the applicant provides. Managers should also know whether a background check may be performed at any time during or after the hiring process and how to document and store information from the background check.
- Document the process when a background check is legally performed.
- Be consistent in the company’s approach to background checks ensuring all applicants are treated fairly and in accordance with the company’s policies and procedures.
Get Smart HR
Ban the box laws are common in most states and can lead to complex compliance issues. In most cases, simply removing a checkbox on an employment application inquiring about an applicant’s criminal history likely won’t check all the compliance boxes for an employer. Ban the box laws vary and have other nuanced requirements. Also, while the FCRA and ban the box laws are complementary, compliance with one doesn’t necessarily guarantee compliance with the other. Employers conducting business in multiple states have the added challenge of coordinating multiple state laws and the FCRA. If you think your hiring and specifically, your background check, procedures could be problematic, leave it to the experts at Smart HR to thoroughly audit your procedures and, if needed, fine tune them to avoid costly mistakes. Call today.
