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Ban the Box Legislation Points to a Greater Need for Background Screening


Ban the box legislationMany who have filled out a job application have encountered “the box” -- it’s a little square, usually located toward the end of an employment application, next to a question that asks, “Have you ever been convicted of a criminal offense?

A spreading “ban the box” legislative push across the nation posits that asking an applicant if he/she has had a criminal history in the initial stages of hiring causes unfair discrimination toward those with previous criminal convictions. Proponents of “ban the box” legislation argue that a standard employment policy of asking if an applicant has committed a crime, in the initial stages of the application process, indirectly contributes to recidivism, and potentially causes disparate impact on protected classes under Title VII of the Civil Rights Act of 1964. Supporters contend that “ban the box” legislation will directly contribute to more equal hiring practices and, in turn, potentially lead to better communities.

The movement to enact “ban the box” legislation is growing along with federal pressure from the U.S. Equal Employment Opportunity Commission’s (EEOC) enforcement guidance report entitled, “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964”. The EEOC recommends in the aforementioned guidance report that companies proceed with caution when evaluating an applicant’s hire eligibility based on criminal record history. When assessing the criminal records history of an applicant’s background report, employers are advised by the EEOC to consider the job for which the applicant has applied, the amount of time that has since elapsed from the date of the criminal offense(s), as well as the nature, gravity, and scope of the criminal offense(s).            

Six States have Currently Enacted Statewide Ban the Box Legislation


House Bill 1263 states that employers may not inquire about an applicant’s criminal history until a conditional offer of employment has been made.


State law H. F. 1301 states that a public employer may not inquire into an applicant’s criminal history until the applicant has been selected for an interview by the employer.

New Mexico

Senate Bill 254 states that a board, department, or agency of the state may not make an inquiry regarding an applicant’s criminal history on an initial employment application. The law further mandates that the aforementioned state agencies are prohibited from taking an applicant’s criminal conviction history into consideration unless that applicant has been selected as a finalist for the position.


House Bill 3528 states that an employer, employment agency and/or labor organization cannot discriminate against an applicant due to an applicant’s “court and arrest record”.


House Bill 5207 states that, “a person shall not be disqualified from employment by the state [of Connecticut] or any of its agencies, nor shall a person be disqualified to practice, pursue or engage in any occupation, trade, vocation, profession or business for which a license, permit, certificate or registration is required to be issued by the state [of Connecticut] or any of its agencies solely because of a prior conviction of a crime.”


Massachusetts General Laws Chapter 151B, Section 4, 804 CMR 3.01 places restrictions and limitations on what an employer can and cannot ask on an initial employment application regarding criminal record histories.

Additionally, many counties and cities have also enacted “ban the box” legislation, or similar legislation that restricts and/or limits what employers can and cannot include on an initial employment application. The National Employment Law Project has a resource guide, updated as of November, 2012, that highlights county and city legislation.

Employers Still at Risk for Negligent Hiring Claims
Pre-employment background screening plays a more important role than ever in the hiring process now that “ban the box” legislation is sweeping the United States. It is important for employers to note that active “ban the box” legislation does not exempt employers from claims of negligent hiring -- it is certainly not a green light to remove background screening from the hiring process. Conversely, employers now have to be even more thorough in their pre-employment background screening programs because there will not be a possibility to know of an applicant’s criminal history until after the initial stages of the hiring process. Although an employer may not be able to ask an applicant up-front about his/her criminal history in the state in which the employer is hiring, that does not mean that a criminal background check should not be performed.

Background Checks more Important than Ever
Employers are given, now more than ever, the role of assessing each job position in individual terms, and of creating an individualized assessment policy that incorporates and determines which background investigation searches will need to be ordered and reviewed for each job position for which the employer recruits. It may be advisable for employers who want to maintain compliance with their jurisdiction’s “ban the box” legislation, and for employers who desire to take the lead from the EEOC’s guidance report,  to consult with accredited background screening companies to develop customized background screening packages which meet employers’ business needs for each job position.

Employment Background Investigations (EBI) works with employers globally to provide a full range of comprehensive and legally compliant criminal background check solutions.  Our "Just One Solution" suite of background screening, drug testing, occupational healthcare, and electronic form I-9 services will help reduce the risks and liabilities of a bad hire!  EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local, and international mandatory requirements.  EBI is not providing legal advice or counsel and nothing provided in this document should be deemed as legal guidance or advice.  Readers should consult with their own legal counsel to determine their responsibilities or if they have questions on any information provided by EBI.

Credit Reports For Employment Purposes – State Law Compliance


Employment Credit ReportsCredit Reports Can Be An Important Element Of Background Screening
Credit reports are a critical element of the background screening process for many employers. Banking, finance, security, public safety and pharmaceuticals are just a few industries that rely heavily on credit reports for making a hiring decision as an indication of integrity and stability. Consider a candidate for a government position who has defaulted on a government backed student loan or possesses tax liens against them.  What about an employee that has fiduciary responsibility over company funds, check writing authority, or access to large amounts of cash?  Consider an employee that is granted a company credit card and struggles to manage their own personal credit within acceptable limits.  What about an employee that has access to customer credit card information or confidential consumer information which could lead to potential identity theft?  A credit report may give insight into a candidate’s stability and trustworthiness for a specific position, although there is no proven correlation to a candidate’s credit score and their ability to perform a job.  For that reason, a credit score is not part of an employment credit report. 

Proper use of a credit report within the hiring decision process is imperative to avoid discrimination and legal liability.  Each should be reviewed on an individual basis and employers should provide a candidate/employee with an opportunity to respond to derogatory information found within their credit history, since many times there are unavoidable circumstances which lead to poor credit.  Create a policy that is consistent when using credit reports as part of the screening process and be aware of restrictions within your state.

Individual States That Restrict Credit Report Use
A few states have considered, or passed, legislation that provides specific language around the use of credit reports for employment purposes. Employers need to be sure that their hiring, retention, and promotion practices fall within these guidelines. Below is a sampling of state by state considerations as of September 1, 2011. It is important that you stay current on new developments through your HR legal counsel as state and federal legislation is constantly changing.

  • Colorado Active Legislation - The Colorado “Employment Opportunity Act”, Colo. Rev. St 8-2-126, will drastically limit consumer credit information from being used for employment purposes. The law, which was signed on April 19, 2013, and which will go in effect on July 01, 2013, will be the ninth state law to significantly limit how employers may use consumer credit information to make employment decisions. The law defines “employment purposes” to encompass evaluation of a person for “employment, hiring, promotion, demotion, reassignment, adjustment in compensation level, or retention.” Effective July 01, 2013, Colorado employers may only use consumer credit information for employment purposes if:  “The employer is a bank or financial institution; the report is required by law; or the report is substantially related to the employee’s current or potential job and the employer has a bona fide purpose for requesting or using information in the credit report that is substantially related to the employee’s current or potential job and is disclosed in writing to the employee.”
  • California Active Legislation - Governor Jerry Brown signed Assembly Bill 22 on October 10, 2011. The new guidelines go into effect January 1, 2012, and employers in California may only use a consumer credit reports for employment purposes if the report is sought for one of the following:  (1) A managerial position;  (2)  A position in the state Department of Justice;  (3)  A sworn peace officer or other law enforcement;  (4)  A position for which the information contained in the report is required by law to be disclosed or obtained; (5)  A position that involves regular access to confidential information ( credit card account information, Social security number, or Date of birth); (6) A position which the person can enter into financial transactions on behalf of the company; (7) A position that involves access to confidential or proprietary information; or (8) A position that involves regular access to employer, customer, or client cash totaling $10,000 or greater during the workday.  Please be aware that there are additional provisions regarding written disclosure, a check box available for the applicant to request a copy of their report at no additional charge, and disclosure of reasons for obtaining such information on the applicant.

  • Connecticut Active Legislation Senate Bill 361 will prohibit most employers from utilizing applicant and employee credit reports for employment decisions effective October 1, 2011. The law specifies employers may not require an employee or prospective employee to consent to a request for a credit report unless: (1) such employer is a financial institution, (2) such report is required by law, (3) the employer reasonably believes that the employee has engaged in specific activity that constitutes a violation of the law related to the employee's employment, or (4) such report is substantially related to the employee's current or potential job or the employer has a bona fide purpose for requesting or using information in the credit report that is substantially job-related and is disclosed in writing to the employee or applicant.  The law defines credit report information as “substantially related” and provides scenarios for various positions.

  • Hawaii Active Legislation - House bill 31(HB31 CD1) became law on July 15, 2009, overriding Governor Lingle’s veto. This law establishes employer's use of an individual's credit history in hiring and termination decisions as an unlawful discriminatory practice, provided that the individual's credit information directly relates to a bona fide occupational qualification, and that employers are expressly permitted to inquire into credit history for employment purposes pursuant to any federal or state law.  The bill also provides notable exemptions to the legislation.

  • Illinois Active Legislation -    Illinois State Governor Pat Quinn has signed the Employee Credit Privacy Act (HB4658) into law.  Effective January 1, 2011, Illinois employers and agents of employers may not “discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment because of the individual's credit history or credit report”  or “order or obtain an applicant's or employee's credit report from a consumer reporting agency.”  The law applies to all Illinois-based employers of any size; however, provides exceptions for use within specific industry and for certain positions.

  • Maryland Active Legislation - the Maryland Job Applicant Fairness Act was signed into law on April 12, 2011, and the new law restricts employers from using an applicant/employee's credit report or credit history in determining whether to deny employment; discharge an employee; or determine compensation, terms, conditions or privileges of employment. This law goes into effect on October 1, 2011, and specifies that the employer may request or use the applicant/employee’s credit information after the applicant has received an offer of employment and if the employer has a substantially job-related bona fide purpose for requesting or using information in a credit report or credit history.  Under the act, a position for which an employer has a substantially job-related bona fide purpose for requesting or using information in a credit report or credit history includes a position that is qualified for credit report use.

  • Nevada Active Legislation - Senate Bill 127 which went into law on May 25, 2013, enacts several restrictions on the use of consumer credit information for employment purposes in Nevada, including that an employer cannot request or require any employee or prospective employee to submit to a consumer credit report or to provide other credit information. It also restricts employers from using, accepting, or referring to consumer credit information, and prohibits employers from disciplining, discharging, or discriminating against employees who refuse, decline, or fail to submit to a consumer credit report. Employers should refer to Section 7 of Senate Bill 127 for a full list of restrictions. 

    However, the legislation provides several exceptions for employers, and states that employers may request and/or use a consumer’s credit report for employment purposes if the employer meets certain criteria, as outlined in Section 7.5 of the Bill.

  • Oregon Active Legislation – As of March 29, 2010, Oregon Senate Bill 1045 was signed by Governor Kulongoski and went into effect July 1, 2010. This bill places additional restrictions on the use of credit reports, and prevents employers from utilizing credit reports for employment, including hiring, discharge, promotion, and compensation unless the credit report use is "substantially job-related".  There are also exceptions under this new law for certain industries or positions.

  • Vermont Active Legislation - Vermont Governor Peter Shumlin has signed Senate Bill 95 into law, generally restricting an employer’s right to inquire, obtain, and utilize credit history information for employment decisions effective July 1, 2012. Importantly, the new law does exempt Vermont employers from the new provisions if one or more conditions are applicable:  A complete list of provisions are listed within the Bill.

  • Washington Active Legislation - The state of Washington amended existing legislation with RCW 19.182.020. An immediate effect of this legislation revolves around the use of amended forms and the ability for WA employers to communicate the reasons that a credit report is substantially related to a particular job. Under this amended Washington Law, employers cannot obtain a credit report as part of a background check unless the information is substantially “job related” and must include the employer’s reason for use and be disclosed in writing.  The use is also acceptable if required by law.

Even with only a few states weighing in on the use of credit reports, all current, pending and even vetoed legislation address the critical need for proper use, and the valuable resource it brings to employers. EBI provides this information as awareness to current trends and issues within the background screening industry; however, this information should not be taken as legal advice as it relates to the proper use of credit reports.

Employer Resources For Consumers
The following are additional resources that provide consumers guidance with Federal law and guidelines around credit reports and their rights.

Federal Trade Commission (FTC)
FTC – Consumer Credit Information 
Yearly Credit Report Review 

Employment Credit Reports From EBI
At EBI, we understand the critical role that credit reports play for assessing a candidate or even a current employee. EBI offers access to FCRA compliant employment credit reports in a secure and confidential manner.  EBI can provide a complete picture of your candidate, confirming the candidate’s true identity, address history, and credit worthiness with our “one stop” background screening solutions.

EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international mandatory requirements. If you found this information useful, select the button listed below and access more industry news, resources and tips from EBI, an NAPBS Accredited screening firm and global leader in the background screening industry!



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