The Unfair Use of Credit Reports and Criminal Records and the EEOC E-Race Initiative

According to an article in HR Morning, the two largest headaches for employers when it comes to hiring are the blanket  exclusion of individuals with poor credit histories or a criminal, record, and not showing a correlation linking background checks and the job itself. 

The author notes that in response to seeing an increase in claims of discrimination based upon criminal records and credit reports,  the EEOC started the E-RACE Initiative (Eradicating Racism And Colorism from Employment).  This brilliant article can be found at:

http://www.hrmorning.com/recruiting-eeoc-warns-about-background-checks/

As ESR has advised employer on a number of reason, the unfair use of credit reports or the automatic exclusion of individuals with criminal records without considering if there is a business justification are two huge vicinity of potential liability for employers.  The Safe Hiring Manuel, the first comprehensive book on background checks that was written by ESR goes into these issues in detail.  It can result in an action by the EEOC or a lawsuit for discrimination.  Needless to say, employers would rather not face either.  As noted in a recent ESR blog, the EEOC has brought a legal action against one national employer alleging the discriminatory use of credit reports and criminal records. http://www.esrcheck.com/wordpress/1057/new-eeoc-lawsuit-for-discrimination-based-on-credit-report-and-criminal-records 

The one thing that small and standard businesses do not want to do is to use screening software that makes automated choice.  That is a huge risk taken for no excellent reason.  

To attempt to minimize exposure, employers may want review the following articles by ESR:

1. http://www.esrcheck.com/wordpress/815/basics-of-credit-reports-and-background-checks
2. http://www.esrcheck.com/wordpress/942/the-basics-of-criminal-records-searches

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