Excerpted from a Morgan Lewis Blog by Claire M. Lesikar and Michael D. Schlemmer
Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party?
Federal law does not generally restrict background checks of applicants and employees as long as the employer conducts the check directly rather than through a third party. When an employer uses a third-party vendor to conduct the background check, however, the process is governed by the Fair Credit Reporting Act (FCRA).
The FCRA does not prohibit an employer from hiring a vendor to conduct background checks or from taking employment action based upon the results of such investigations, but it does require the employer to first provide notice and obtain permission from the applicant or employee. The FCRA also requires that notice be provided to applicants and employees before any adverse employment action can be taken based upon background check information, and it requires that applicants or employees be allowed to correct or explain any negative information.
The FCRA further requires employers to maintain the confidentiality of background check information and places some limits on how this information can be used. It is also important to note that several states, including California and New York, have their own laws governing the use of background checks and impose additional requirements and restrictions on an employer’s ability to obtain and use this information.
Effective from 20 December 2021, the federal Fair Chance Act generally prohibits federal contractors from asking applicants applying to work in connection with federal contracts about their criminal histories until after the contractor extends a conditional job offer. The Act also prohibits employers from seeking an applicant’s criminal history from other sources. The Act provides exceptions for criminal background checks that are otherwise required by law or for other specific job positions.
In April 2012, the Equal Employment Opportunity Commission (EEOC) issued guidance regarding when it is appropriate for an employer to use background check information relating to an applicant’s criminal history. The EEOC’s guidelines state that employers should exercise caution before excluding individuals from employment based on criminal history, and asks employers to avoid blanket exclusions unless there is a close link between the requirements of the job and the type of crime committed. Similarly, certain states and municipalities across the country have enacted legislation limiting the ability to inquire as to a criminal record and the use of this information during the application process and in other employment decisions.
Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment?
Yes, the Americans with Disabilities Act (ADA) prohibits employers from conducting medical examinations or making pre-employment inquiries to determine whether an applicant has a disability or the nature or severity of the disability. Under ADA, however, employers may require applicants to submit to post-offer medical examinations, which may be administered after the applicant has received a conditional offer of employment but before the applicant has commenced employment. Moreover, employers may condition offers of employment on the results of the post-offer medical examination if the following conditions are met:
- • all entering employees in the same position are subjected to such examinations whether or not they have a disability;
• information obtained regarding an employee’s medical condition or history is collected and maintained on separate forms and in separate medical files that are treated as confidential medical records; and
• the results of the examinations are used only under the provisions of ADA, and if people with disabilities are excluded from the position based on the examination, the examination must be job-related and consistent with business necessity.
Employers must ensure that medical examinations do not result in a violation of the Genetic Information Nondiscrimination Act, which prohibits employers from using genetic information for decisions on hiring, firing, promotions or job assignments.
State laws may also provide restrictions on pre-employment medical and physical examinations of applicants.
Drug and alcohol testing
Are there any restrictions or prohibitions against drug and alcohol testing of applicants?
Generally, pre-employment drug and alcohol testing is lawful under federal and state law where:
- • the testing is required by law (eg, US Department of Transportation drug and alcohol testing requirements) or is part of a lawful pre-employment medical examination required of every applicant for the same position;
• an applicant has notice of and consents to the testing requirement;
• the testing is conducted under conditions designed to minimise the intrusiveness of the procedure (eg, an applicant is not observed while furnishing the sample); and
• no specific medical information is reported to the employer; rather, the employer is only informed of a pass or no-pass result.
Drug and alcohol testing of applicants and employees is predominantly a subject of state law, which can vary widely from state to state.
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