In response to mounting concern over the use of criminal records and credit reports to screen potential employees, Commissioner Victoria Lipnic of the Equal Employment Opportunity Commission (EEOC) announced on March 13, 2012, that the EEOC is “likely” to issue new guidance to employers on the use of both criminal history and credit background checks in the near future. According to Lipnic, the EEOC’s renewed focus stems, in part, from concerns of discrimination resulting from “blanket” hiring policies that improperly exclude minority applicants. The new guidance was reportedly circulated in March to the five Commissioners and has been fast tracked for approval.

It is anticipated that the new guidance will significantly curtail the practice of checking a job candidate’s criminal or credit history, placing the burden on the employer to demonstrate a legitimate business need. This is supported by Lipnic’s expressed concern over the potential disparate impact that background checks may have on minority applicants. This concern is echoed in the EEOC’s 2010 informal letters pertaining to credit checks and criminal background checks, which recognize background screening may have the unanticipated effect of disproportionately excluding minority applicants from employment opportunities.

As we eagerly await the EEOC’s new guidance, employers should take this opportunity to ensure that their background check practices are compliant with the Fair Credit Reporting Act and with state-specific laws and restrictions. Employers should also be mindful that they are proactively informed of legal changes that will affect compliance with their background screening policies.