Will Federal Push to “Ban the Box” Affect Debt Collection Hiring Practices?

It isn’t uncommon for clients to push debt collection agencies to disqualify job candidates for criminal histories. Agencies may not be able to deliver on that demand much longer. Many states have already adopted a “ban the box” policy, which prohibits employers from asking about criminal convictions in job applications. (Check out our recent and thorough coverage on the risk in criminal background checks right here.) Now it appears that the Feds are following suit.

President Obama appeared earlier this week in Newark, N.J. to announce a series of measures designed to help former criminals become productive and reenter society. In his comments, the President announced an executive order directing the Office of Personnel Management (OPM) to delay inquiries into criminal history until later in the hiring process. What’s more, the President also called on Congress to follow recent state law and pass legislation designed to “ban the box” on job applications.

“We know that having millions of people in the criminal justice system, without any ability to find a job after release, is unsustainable,” President Obama said on Friday as part of his weekly address. “It’s bad for communities and it’s bad for our economy.”

And when it comes to helping former convicts move back into society, “everyone has a role to play, from businesses that are hiring ex-offenders to philanthropies that are supporting education and training programs,” he added.

If it were not already clear that Federal agencies plan to meet some of the most aggressive state laws and policies on criminal history and employment, the Consumer Financial Protection Bureau has also gotten in on the action. Less than two weeks ago, the CFPB took action against two of the largest employment background screening report providers, General Information Services (GIS) and its affiliate, e-Background-checks.com, Inc. (BGC), for “failing to take basic steps to assure the information reported about job applicants was accurate.” The companies are now on the hook for $10.5 M in relief to consumers the agency identifies as having been harmed by the two background check companies.

The agency alleges that GIS and BGC did not use basic procedures for matching public records to the correct individual and that the companies did not use an audit process to verify the accuracy of their reports. The agency also accuses the two companies of including impermissible information in reports, such as civil suit and civil judgment information older than seven years.

insideARM perspective

The signals are clear, and so is the risk to your firm. Agencies simply can’t rule out a candidate simply because he or she has a criminal record. As Radius Global Solutions HR VP Stacy Spradling explained here on insideARM recently, agencies have to take a more sophisticated, broader view of each candidate. A criminal history can’t be an automatic disqualifier, but rather one of many details hiring officers need to consider.

“Considering a candidate’s criminal convictions over their skills and abilities may subject the employer to further scrutiny, ultimately compounding claims of discrimination,” she wrote. “To prevent risk an employer should know the regulations, ask questions about criminal backgrounds later in the process, and only disqualify candidates whose conviction strictly correlates to them being unsuccessful in the role.”