As the effects of “the great resignation” and other pandemic-related labor disruptions continue to reshape recruitment and hiring, it is not surprising that the majority of businesses today consider background checks a vital tool in attracting, hiring and retaining top workers. In fact, one of the primary reasons businesses use pre-employment background screening services is to improve the quality of their hires.
It makes good sense: Comprehensive pre- and post employment screening is a proven tool to help businesses make smart hiring moves. But just as not conducting background checks can be dangerous – exposing companies to employment law violations and security risks – lax screening practices can be perilous too. This is especially true in 2024, as a bevy of new laws and regulations have recently been enacted that limit how background checks can be conducted across the nation.
Here are the top three employment screening trends that impacted background checks in 2024:
Changing Marijuana Rules
Although marijuana possession remains illegal under federal law, 38 states have legalized the plant for medicinal and/or recreational use. In addition, laws expunging marijuana convictions are increasingly common. This evolving landscape creates an interesting dilemma for businesses.
Pot was long considered a drug that would prevent you from passing a drug test for employment. Despite the reality that getting high after hours is as acceptable as a happy hour cocktail in many places, marijuana use can still cause impairment on the job.
Unless a specific industry or the open position requires drug testing (government workers and commercial drivers, for example), it’s up to employers to decide whether drug testing makes sense for them, and under what circumstances. To complicate matters further, there is not yet a widely accepted legal standard for marijuana impairment.
A comprehensive background screening company like First Contact can help by advising businesses about the evolving legal issues surrounding both medical and recreational marijuana use and testing as well as help craft a formal policy regarding why drug testing is necessary. Having a formal policy helps to eliminate confusion for both job applicants and current employees.
AI and other Emerging Technology
Artificial intelligence is not the stuff of scary science fiction anymore. AI technology is helping to streamline much of what hiring managers used to do by hand, from posting positions, evaluating candidates, matching skills to jobs and even interviewing – all at lighting speed. But there is danger in all that efficiency as it takes thoughtful, knowledgeable humans to create algorithms that don’t discriminate against real people. It’s still a work in progress, as decisions made by AI have led to many unfair hiring and firing outcomes that are shaping new and evolving rules guiding how background checks are conducted.
The Equal Employment Opportunity Commission (EEOC) has called the use of AI in the workplace a “new civil rights frontier.” The Commission is currently working on identifying best practices and providing guidance on the use of AI in employment decisions. It has issued guidelines for employers on complying with the Americans with Disabilities Act while using AI.
In 2023, the Commission released a draft plan that notes one of its priorities moving forward will be eliminating barriers in recruitment and hiring, including those caused by “the use of automatic systems, including artificial intelligence or machine learning, to target advertisements, recruit applicants, or make or assist in hiring decisions where such systems intentionally exclude or adversely impact protected groups.” Also, the Commission is studying the use of “screening tools or requirements that disproportionately impact workers based on their protected status, including those facilitated by artificial intelligence or other automated systems, pre-employment tests, and background checks.”
In addition, some states, including New York, California, Maryland, and Washington, have either enacted or are considering their own legislation. In New York, companies that use AI employment selection tools will soon be required to make specific bias data publicly available. They will also be required to disclose their use of AI to job candidates living in the Big Apple
For businesses that currently use AI tools in recruitment, the best plan moving forward is to make sure background checking software used takes into account both the EEOC guidelines and any local laws.
“Clean-Slate” and Other Privacy Laws
Over the last few decades, efforts to give people with criminal a second chance have resulted in laws affecting what records can be used to make employment considerations.
Among them, “fair chance” hiring laws limit consideration of an applicant’s criminal history in making a hiring decision. Currently 36 states and some 150 cities have “ban the box” laws requiring employers and landlords to delay their background checks until they decide someone is otherwise suitable.
Also trending are “Clean-Slate” laws, that actually wipe the slate clean in some respects. While the details vary from state to state, “Clean Slate” laws limit or erase information which would otherwise appear on a criminal record background check. This is typically done by sealing or expunging (completely erasing) records. As of now, 13 states have such laws on their books.
Sealed records are generally hidden from public view, and visible only to law enforcement and a very limited group of others, such as employers who are required to perform deeper background checks for regulatory compliance. Expungement completely removes criminal information from a person’s legal record, as if it never happened.
Clean slate laws add another layer of diligence and compliance to the background checking process, which is already complicated by other existing federal and state regulations.
Pay Transparency Laws
Pay transparency is the practice of disclosing information about employee compensation – internally, externally or both. Pay transparency laws generally require employers to post salary information publicly in job postings and may also require sharing the information with employees internally.
Also, in many jurisdictions with such laws, salaries offered for open positions cannot be negatively benchmarked against candidates’ past salaries. Such laws are designed to promote pay equity, particularly benefiting those who may have faced gender or race-related pay disparity in previous jobs. They are gaining ground. Currently, eight states have enacted laws, and more are considering them.
Abiding by the state pay equity and pay transparency laws means understanding how they affect your business when posting job openings, hiring employees and reporting data. It gets even more complicated when considering remote and hybrid workers, who may live in states with more or less stringent salary disclosure laws than are on the books in the state where the company is located.
The Bottom Line
If you’re in recruitment or talent acquisition, it is essential to keep up with new laws and regulations that impact the way background checking can be conducted state by state and even in different cities in the same state.
Schedule a consultation with us at First Contact HR today to ensure a successful and lawful hiring process.