Pre-Employment Screening: Are You Compliant?

January 30, 2020 Brandon Barborka

As an employer, you want to hire talented, qualified and driven people to work for your company. In the interest of maintaining a fair hiring system that promotes equal opportunity for all applicants, parts of your pre-employment screening process must be updated from time to time. Keeping up to date with changing regulations can be tough, particularly when you source workers in several states and cities.

If you find it difficult to stay current on this topic, you’re not alone. According to a recent employer survey, 79 percent of respondents agreed that a “shifting, fragmented patchwork of state and local labor and employment requirements has created compliance challenges.” In particular, 48 percent of respondents said they were impacted by background check restrictions.

In many cases, screening practices that were nearly universal a short time ago have come under legal scrutiny in certain jurisdictions, which has caused 85 percent of surveyed companies to update policies, handbooks or human resources procedures in the last year. We want to help you navigate this shifting landscape. Here are some of the most important topics to keep in mind while you update your pre-employment screening process.

Salary History

This topic has become one of the most prominent workplace compliance trends of recent years.

The city of San Francisco will soon join a growing nationwide movement to prohibit employers from asking candidates about their salary history. The new legislation will likely go into effect next year, and proponents say that it’s intended to help eliminate wage disparities between women and men. Employers will still be allowed to ask for salary expectations, and candidates may choose to disclose the information in the hopes of securing a better offer.

Similar legislation has been passed in the cities of New Orleans, New York City and Pittsburgh. Legal protections have moved forward in the states of Delaware, Massachusetts, New York and Oregon as well as the territory of Puerto Rico. A piece of legislation in Philadelphia is pending in the courts, and in some jurisdictions, this prohibition only applies to employees of state or city organizations.

So what’s the best method to approach this issue? You should of course comply with the laws in your jurisdiction, but keep in mind that most candidates don’t want to be asked about their salary history anyway. Some experts suggest that you lead the conversation during the negotiation. Set up clear expectations for candidates. Ultimately, this can improve the candidate experience.

Ban the Box

Another rising trend is the movement to Ban the Box, or to eliminate questions about criminal history from the first round of pre-employment screening. A recent review found that two-thirds of Americans now live in a jurisdiction with some form of a Ban the Box law. Many of these laws are limited to public employees, but there is a growing list of state and local governments that also prohibit private companies from engaging in this practice.

It’s important to remember, however, that these laws often allow employers to consider the criminal history of an applicant following an interview or a conditional offer of employment. Ultimately, when an employer considers the criminal background of a candidate, that consideration should be relevant to the open position. Most often, the intent of the Ban the Box movement is to ensure that people are not dismissed outright from the hiring process due solely to a previous indiscretion.

Make sure to understand and comply with the laws in your particular jurisdiction, and to stay updated on any pending legislation.

Credit Reports

Pulling credit reports is another element of pre-employment screening that has attracted the attention of legislators in recent years. Though this movement has not experienced as much momentum as Ban the Box legislation or as restrictions on inquiries into salary history, pulling credit reports is an area of increased concern for employers. Several states forbid most employers from pulling credit reports on applicants, and these states were recently joined by the District of Columbia. In areas where it is permissible to pull credit reports, the process requires the candidate’s consent.

New credit screening restrictions are different from Ban the Box legislation in an important way. While Ban the Box regulations usually allow the employer to inquire about criminal history after an interview is conducted, credit screening restrictions often extend through the entirety of the application process, and they also cover workers after they’re hired.

If you use credit reports as part of your pre-employment screening process, make sure to pay attention to potential changes in local legal requirements. Also, consider whether a credit report is truly relevant to the position for which you’re screening. Some areas that prohibit employers from using credit reports for generic screening purposes allow exemptions for positions that deal directly with finances.

A Dynamic Approach to Recruiting

Ultimately, a well-informed human resources department is the best assurance that a company’s pre-employment screening practices are compliant with local, state and federal labor laws. HR professionals should remain on the lookout for pending legislation in their locations that would affect salary history inquiries, credit reporting processes and questions related to an applicant’s criminal history.

Recruiting is changing in more ways than one. To stay current, you might have to update more than just your pre-employment screening procedures. Check out these 5 Updated Recruitment Tools to Help You Source Top Talent.


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