Ban the Box isn’t going away, and companies need a strategy to protect themselves.
The movement in the U.S. to restrict the kind of information employers can look for in making a hiring decision gathers momentum, this time in New York City. It’s known as Ban the Box because the list of boxes applicants need to check about past events gets steadily smaller.
The news in New York City is that as of this month, companies with four employees or more are not allowed to run a credit check on most applicants. The new rules are analyzed at Norton Rose Fulbright’s Regulation Tomorrow blog here. We’ve written extensively on this issue on this blog (Screening Job Applicants’ Old Test Results are Relevant but Fraud is Off-Limits) and in ALM’s Employment Law Strategist, here.
Stronger ban the box rules can give employers fits. What you are supposed to do if you notice that a prospective applicant has five previous addresses in the past 16 months? This is someone who will be given a lot of important information related to your company. You will want to be able to find this person if anything goes wrong on the job, especially if you need to pursue legal or equitable remedies upon termination.
Our answer to employers is that (once you have a Fair Credit Reporting Act release) you do a proper background check to the full extent of the law using the old fashioned technological miracle known as the telephone. With this, you can speak to people near and far about your applicant. You should speak not only to references on the resume, but more importantly to people not submitted as references.
Former colleagues, former roommates, former landlords are great places to start. In the context of doing a general character check, you can come across lots of great information. An old landlord could tell you your applicant seemed like a great tenant, but since he left bill collectors have been calling weekly to try to find him. You now have the kind of information you needed without to running the credit check.
Does figuring out whom to call and then interviewing them take more time than running a credit check? Of course it does. But in interviewing you can also find out more than a single three-digit credit score. Someone who has an exemplary past with one large default linked to paying for the hospitalization of a family member is different from a defaulter who has left four angry landlords behind in six years.
For many jobs, an applicant’s credit history should make no difference. For those on which a bad credit report could mean the difference between an offer and a rejection, the extra time to call references both on and off the resume is probably worth the time and expense to get the hiring right.