It is the goal of employers to hire the most qualified individuals for their businesses. As part of their evaluation process, employers try to obtain as much personal background as possible on the individual from an employment application and during the interview. However, there are limitations on what information an employer can obtain and the means used to obtain the information during the hiring stage.
Job references are still the most widely used means of checking a job candidate's background, but employers also review records from schools and the military, and examine police records for criminal convictions. Additionally, some employers obtain information from credit bureaus as part of their pre-employment screening process.
Employers should be aware that various federal and state laws impact the hiring phase of the employment process. Title VII of the Civil Rights Act, the Pregnancy Discrimination Act, the Age Discrimination in Employment Act, and the Missouri Human Rights Act all impose limits on the kinds of inquiries employers can seek from applicants. These statutes generally prohibit an employer's adverse hiring decision to be based on personal and/or physical characteristics of the applicant.
The federal Fair Credit Reporting Act regulates credit bureaus as well as employers obtaining credit information on an applicant from these bureaus. Although an applicant's credit worthiness may provide some useful information to a prospective employer, employers should understand their legal obligation before seeking a consumer credit report.
Amendments to the Fair Credit Reporting Act, which became effective on Sept. 30, 1997, impose certain disclosure, notice and authorization requirements on employers. An employer must make a disclosure to the applicant that a consumer credit report may be obtained.
The employer should obtain a written authorization from the applicant before securing a credit report. The employer also should certify to the credit reporting agency that it has complied with the disclosure and authorization requirements.
After the 1997 amendments, employers still were unsure what their legal responsibility was concerning the written authorization when an employee applied by telephone, mail or e-mail. The Fair Credit Reporting Act was amended again in 1998 to clarify this area of confusion.
Essentially, the 1998 amendment requires an employer to provide oral, written or electronic notification to the applicant that a consumer credit report may be obtained for employment purpose. This notice must be given before a credit report is obtained; the prospective employee must consent to procurement of the report either orally, in writing or electronically before the report is obtained.
However, this amendment only addresses the situation when the interaction between the employer and the applicant is by mail, telephone, computer or other similar electronic means. If the employer has had personal contact with the applicant, the 1998 amendment does not apply, and the employer must obtain a written authorization.
Employers who take adverse employment action against an applicant they have never seen in person, based on information in a credit report, must provide the applicant a notice containing information about the adverse action within three days.
The notice may be sent by oral, written or electronic means and must contain the following information:
1. that adverse action has been taken based in whole or in part on a consumer-report.
2. The name, address and telephone number of the consumer-reporting agency that furnished the report.
3. That the consumer-reporting agency did not make the decision to take any adverse action and is unable to provide to the consumer the specific reasons why the adverse action was taken.
4. That the consumer may, upon providing proper identification, request a free copy of a report which the employer must provide within three business days.
As you can see, the hiring process can be a legal minefield for the careless employer. Employers are cautioned that their pre-employment inquiries should be tailored toward one's ability to perform the essential functions of the job.
(Bob Lawson is an attorney with the firm of Blackwell Sanders Matheny Weary & Lombardi LLP in Springfield.)
Adrianna Norris became a first-time business owner with the opening of Finley River Chiropractic; PaPPo’s Pizzeria & Pub launched its newest location; and Huey Magoo’s opened its second store in the Ozarks.