During the upcoming holiday season, many companies—especially those with retail operations—will be looking to expand their available workforce by hiring seasonal workers. Unfortunately, many of these temporary workers will be hired without much scrutiny. Although this approach is understandable given the frenzied pace of the holiday season, it is a risky proposition. Seasonal employees often have more direct customer contact and less supervision than regular employees have during the rest of the year. The wrong hire with a problematic background can create major liability. In short, short-term seasonal employees can have long-term implications. For this reason, many forward-thinking retailers have begun implementing a more robust background check process for seasonal hires.

Background check law is not for the faint of heart. A complex layer of federal and state laws govern the procurement and use of background checks, often leaving employers bewildered and confused. Before developing a background check policy for their prospective seasonal employees, employers should consider these general issues:

1. Background Checks Should Be Conducted Only Pursuant to the Fair Credit Reporting Act. Although the title makes it appear as though this law only pertains to credit checks, the federal Fair Credit Reporting Act (FCRA) applies to all background checks (e.g., criminal checks, credit checks, driving checks, and reference checks) provided to an employer by a third-party consumer reporting agency (CRA). The FCRA mandates that employers provide specific disclosures and receive authorization from an applicant or employee before a background check can be pulled, regardless of whether the individual will be employed seasonally or permanently. The FCRA also imposes strict requirements on an employer concerning disclosures that it must provide to an applicant or employee if the employer is considering taking or takes adverse action against that individual based on his or her background check.

2. Employers Should Comply With the EEOC’s Enforcement Guidance With Regard to Background Checks. The U.S. Equal Employment Opportunity Commission has issued guidelines stating that employers should consider using criminal record information only if the information is job-related and its use is consistent with business necessity. In other words, employers should only use criminal record information that is directly relevant to what the individual will be doing for the employer. For instance, it is likely that the EEOC would consider a conviction for child pornography to be job-related for a position as one of Santa’s elves (given that the position requires the individual to interact with children). However, it would be unlikely to come to the same conclusion for an individual in a gift-wrapping position who has a felony driving-under-the-influence conviction.

Moreover, the EEOC requires that an employer give an applicant or employee the opportunity to provide information relevant to criminal record information before taking an adverse decision and provides a list of relevant factors that an employer should consider while conducting such an individualized assessment. The EEOC guidance is explained in a March 2014 blog post, “EEOC and FTC Issue Joint Publications on Background Checks” and our April 25, 2012 article “EEOC Issues Enforcement Guidance on Employers’ Consideration of Arrest and Conviction Records.”

3. Employers Should Conform to State and Municipality Requirements Related to the Timing and Scope of Background Checks. A significant number of states and municipalities have recently implemented so-called “ban the box” legislation, which limits the types of questions that employers can ask of applicants, as well as the timing of background checks (For example, Illinois, Minnesota, Nevada, New Jersey, Rhode Island, San Francisco, and Seattle each have legislation restricting the use of background checks. ). Some state restrictions are rather strict. For example, Hawaii’s law requires employers to refrain from conducting background checks on an applicant until after a conditional offer of employment has been extended. These types of restrictions can be highly problematic for employers that are hiring seasonal employees on a tight schedule, but failure to comply with them can easily lead to liability in certain jurisdictions.

Additionally, certain states also require specific disclosures both at the time that an applicant or employee authorizes a background check and/or prior to taking an adverse action.

While it is important for employers to consider conducting background checks on seasonal workers, they should do so only if they are prepared to comply with state and federal background check laws. This task can seem daunting, but a comprehensive background check policy and proper background check forms will go a long way towards ensuring a safe work force and decreasing the likelihood of liability . . . or coal in your stocking this holiday season.

For assistance in drafting a background check policy or drafting proper background check forms, contact the Ogletree Deakins background checks advice team at backgroundcheckadvice@ogletreedeakins.com. Federal and state background check requirements are summarized in the firm’s O-D Comply: Background Checks subscription materials, which are updated and provided to O-D Comply subscribers as the law changes.

Further information about retail issues can be found through Ogletree Deakins’ Retail Practice Group, which is comprised of a diverse group of attorneys who are experienced in advising and representing retailers in a wide range of labor and employment matters.

This is part two of our blog series on a variety of issues involved in employing seasonal workers. Part one of this series, “‘Tis the (Retail) Season, Part I: OSHA’s Tips for a Safe Black Friday,” covered federal agency recommendations to retailers on maintaining a safe workplace during holiday sales and discussed policies to consider when retail employers implement a crowd management plan in preparation of Black Friday sales.


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