Tuesday, April 23, 2019

To Test or Not to Test; That is the Question

Posted by OnCourse Staff March 24, 2011 11:14am

Photo Credit: Miguelima

Employee testing is a controversial topic.  Ask five people their stance on this topic and you will get five different, often heated opinions.   Business owners, executives, and managers tend to respond in the pro-testing camp, citing customer protection, business intelligence, and other employee’s welfare as justification.  Employees, government agencies, and activist groups tend to respond in the anti-testing camp, citing employee privacy, data protection, and employee rights against discrimination as reasons not to test.  So, the question is: to test or not to test employees?  This blog will attempt to make sense of the conflicting opinions and offer suggestions on how to develop a testing program that will not alienate your current and prospective employees [1]. 

Drug testing and credit check / background screens for newly hired employees as part of a pre-employment screening process have become more common.   Since drug use (or abuse) can have a harmful impact on not just the individual but also on the safety of customers and other employees, drug testing especially for new hires is widely accepted.  Drug testing is permissible providing you treat all incoming employee in the same manner.  If you drug test the newly hired teller, you also have to drug test the incoming CFO.  To avoid issues of discrimination, treat the results the same.  If you would rescind the offer from newly hired teller for a positive drug test, you should also rescind the offer from the CFO.  Whereas guidance on drug screening is clear, credit checks and background screening is very muddy.

Complaints to the EEOC (Equal Employment Opportunity Commission) for discrimination arising from the use of credit checks/background screening as a qualification for employment has been and is on the rise.  The reason why complaints are rising is the manner in and use of the data gathered during the credit check / background screen can interpreted differently thus causing a potential discriminatory impact.  There is growing case law (EEOC vs. Kaplan Higher Education Corp & EEOC vs. Freeman) where the EEO is claiming credit checks / background screening caused the rejection of applicants based solely on their credit histories had a discriminatory impact on minorities.  The argument the EEOC is making is that credit histories / criminal background may not be bona fide occupational qualification upon which to reject a candidate or rescind an offer.  In fact, due to these recent complaints and the high level of unemployment, Congress is debating new legislation, the Equal Employment for All Act (H.R. 3149) which would amend the Fair Credit Reporting Act (FCRA) to further restrict the use of credit reports /background screens for hiring decisions.   

There are steps employers can take to avoid charges of discrimination.  Some of them are basic and some will require training (for specific advice on your program, please discuss with an employment attorney):

  1. Follow current law and have a clear policy.  The FCRA lays out parameters that employers must follow prior to conducting a pre-employment credit check/ background screening.  Make sure you receive consent from the candidate prior to conducting the search and never use a minimum credit score as floor for employment.
  2. Be reasonable with the scope of the background check.  There might not be a need to look under every rock for every position. 
  3. Be sure the credit check / background screening has a business relationship to the position applied for.  For us in the banking community, our employees interact with clients, provide financial advice and handle monies.  A statement that we perform credit checks / background screenings because of the nature of our business would be understandable. 
  4. If you find the credit check /background screen rejects protected groups (protected groups are defined as race, color, national origin, religion, age or disability), then you should look for and implement alternative screening criteria.
  5. Ensure that credit checks / background screens are not conducted by managers that do not understand the process, current law, or company policy.  A best practice would be to have the credit checks / background screens centralized through Human Resources or a single individual properly trained.

One of the most important ways to avoid a charge of discrimination is to keep current with changes in legislation, EEOC and court rulings.  This is a growing area of complaints and will continue to grow as employers redefine the employment relationship.

Testing current employees is very tricky and there is no clear consensus on how to best develop a testing program.  Testing current employees can breed resentment and a possible employee claims of discrimination, especially if the testing appears targeted at an individual or group.  As with testing prospective hires, there is a difference between drug testing and credit check / background screens.  Drug testing, even for current employees, is mostly permissible.  The standard for drug testing current employees is reasonable suspicion that the employee is using and or abusing drugs (alcohol would also fit in this category).  Reasonable suspicions is construed liberally and below are a few sound guidelines:

  1. Abnormal conduct,
  2. Report from a reliable source of use and/or abuse, and
  3. Direct observation or physical symptoms of drug use/or abuse.

In many states (again, please confer with an employment lawyer to discuss your specific situation) it is permissible to test employees without reasonable suspicion in limited situations, which are: (a) provided you give employees advance notice of the test and (b) their job responsibilities pose a danger to others.  As mentioned earlier, credit checks / background screening on current employees is much more controversial and there is no clear consensus on how to develop a program that will reduce claims of discrimination.   Best guidance would be:

  1. Ensure there is a business rationale which is communicated clearly too all employees.
  2. Use the information in a non-discriminatory manner.  Treat the CFO the same as the teller.
  3. Ensure the data collected is kept private.  Ensure managers are trained in how to conduct, use, and store the information.
  4. Get employee consent before completing the credit test / background screen.  Follow current laws: FCRA, Title VII of the Civil Rights Act, ADEA, ADA, current EEOC rulings, are just a few that have provisions concerning testing in the workplace.   Keep abreast to attitudes toward pre-employment credit checks / background screenings as they will provide a guide for how testing overall will be treated.  Should Congress pass the Equal Employment For All Act, that is a good barometer on how credit checks / background screens for current employees will be viewed by courts.
  5. Consult an employment attorney. 
Whereas having a credit check / background screening program for current employees is not impossible, it certainly has more risk than drug testing.  You need to ask yourself, is the risk of an employee discrimination complaint out weighted by what you will find?  That brings us back to the first question: To Test or Not to Test?

[1] For purposes of this blog, employment screening will mean drug testing and credit checks/ background screening.  There are many other forms of testing but this blog will concentrate on those two.  If you have questions concerning other types of employee screening, please email me at promm@pgcpa.com.


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