Decision: The Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) have jointly issued guidance explaining how anti-employment discrimination laws and the Fair Credit Reporting Act (FCRA) interact with respect to background checks performed for employment purposes.
The guidance reminds companies that, in addition to complying with the FCRA requirements related to background checks, employers that perform background checks should seek the same information and apply the same standards to all individuals, taking care when basing decisions on background information that may be more common among people with a particular protected characteristic. Also, if a background check policy disproportionately affects members of a protected group, the policy must be job-related and consistent with business necessity. The agencies also warned that employers should be prepared to make exceptions for problems revealed during a background check that were caused by a disability, at least allowing the individual to demonstrate his or her ability to do the job unless doing so would cause significant financial or operational difficulties.
Impact: This guidance marks the first time that the EEOC and the FTC have jointly addressed the issue of employer use of background checks. It serves as an important signal that both enforcement agencies are stepping up their scrutiny of employer practices in this area. Employers should periodically review their background check policies and practices to ensure that they comply with the FCRA, anti-discrimination laws and this new guidance.