Should an employer conduct background checks on its potential employees? Should a recruiter conduct them on their contract candidates?

Well, on one hand, background checks can protect the employer from negligent hiring lawsuits, which arise when an employee hurts someone and the employer should have known they were a risk based on their background. If you are a recruiter who serves as the Employer of Record for your contractors, the risk for negligent hiring lawsuits falls onto you.

But checking a potential employee's criminal record could also get employers in trouble.  Many states and localities are limiting employers' ability to gain previous conviction records, and background checks are being scrutinized on the federal level.

San Francisco is considering a law that would prohibit employers from asking candidates if they have prior convictions, according to the LA Times. The law would only allow an employer to inquire about a candidate's criminal history after they have otherwise been qualified for a job.  And if an employer does uncover a past conviction, they would only be allowed to withhold the job if the conviction was "substantially related" to the job. Hawaii, New York, Masschusetts, Philadelphia have already passed similar laws. Other states and localities have laws with various restrictions on the use of arrest and conviction records.

Meanwhile, the Equal Employment Opportunity Commission (EEOC) held a hearing to discuss the fairness of background checks, one in a series of hearings it's held examining possible barriers to employment. The concern is that employers refuse to hire people with criminal records, even years after they have served their sentences and regardless of how minor the crime, according to Human Resources Executive Online. 

It is unclear whether or not this hearing will result in more legislation surrounding background checks. But according to the Wall Street Journal, even if no additional restrictions are waged on the federal level, companies can invite EEOC lawsuits with their background screenings because minorities are arrested at a disporportionate rate.

If you or a client are using background checks, it is important to do the following things:

1. Wait until after the job offer is extended to conduct the background screening.
2. Be aware of any state or local laws that many limit your ability to inquire about or use criminal history in employment decisions.
3. Comply with the Fair Credit Reporting Act (FCRA) as it applies to background checks.

This article is for informational purposes only and should not be considered legal advice.

Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.