The annual Frantz Ward Labor & Employment Seminar is consistently a great learning experience for both clients and guests and for the presenters from our Labor & Employment Practice Group. This year’s program, at the new Stillwater Place facility at the Cleveland Metroparks Zoo, was no exception. Our audience of HR professionals, business owners, and attorneys heard not only from our lawyers, but also from experts in fields such as medical marijuana and managing a premier metropolitan park system. The participants also provided feedback on some important current issues in the human resources world. We asked formal questions to the over 300 guests and received responses through Poll Everywhere software. While the invitations were not based upon a scientific selection of the HR universe, the number of responses was valid as reflective of the group that was in attendance.
The subjects of the polling were pre-employment background checks under the Fair Credit Reporting Act (“FCRA”), inquiries on past criminal history, and pre-employment questions on prior salary history. It may be interesting to know what the responses were.
Pre-Employment Background Checks
The FCRA has a number of non-intuitive requirements that may create problems for employers who fail to follow the requirements exactly. For example, the FCRA requires that subjects of background checks be provided with a disclosure that consists of the disclosure and nothing else (except in some cases the permission from the applicant may be in the same document.) Permissions contained in the general application forms, for example, may not be proper. Waivers of claims against the prospective employer included within disclosure forms have created liability for a number of businesses. The polling revealed that many employers do include authorizations for background checks within their application forms.
Many employers also include waivers within their permission forms.
With many more working age individuals having some criminal history, the general approach of employers is to ask about relevant criminal conviction history and then make individualized judgments about the suitability of the employee in the particular circumstances of the employer.
Philadelphia, New York City, and other jurisdictions are attempting to prohibit employers from even asking about salary history. The theory is that females generally have had lower pay in the past, and if their salary at hire is based on that lower prior pay rate, they will start out behind and likely stay there. If employers are prohibited from asking for the information, they will not be able to justify lower pay for females upon their previous pay. The vast majority of employers ask about prior pay rates and find the information very useful.
Despite asking for and using the data on pay rates, most employers recognize that paying new employees based upon prior rates (plus an increase) does perpetuate inequality in pay between men and women.
The takeaways from this brief survey are:
- Employers do not have sufficient awareness of the specific, non-intuitive and unnecessary requirements of the FCRA.
- Employers are very willing to hire felons who demonstrate rehabilitation and qualifications for the job, but they do want to have the ability to know about the past criminal history.
- Employers use, and want to continue to use, prior pay history in setting initial pay for new employees, but are aware of the potential impact on pay equity. They are therefore willing to be flexible.