Screening candidates for employment by conducting background and reference checks is a valuable way for employers to discover relevant information about potential employees. The information discovered may indicate whether an applicant will be a good fit for a position. On the other hand, the information discovered may suggest that an applicant is not qualified.
There are many different steps employers may take to check an applicant’s background. Depending on the nature of the position in question, employers may choose to use a few or all of the steps that follow for conducting appropriate background investigations.
Conducting reference checks
An employer should contact all of an applicant’s previous employers to check the applicant’s:
- job titles and duties
- work performance
- reason for leaving.
Employers can ask a former employer of an applicant whether they would rehire the applicant. Employers can also ask a former employer of an applicant if there is anything else in the applicant’s background that would otherwise affect the applicant’s suitability for employment, including whether the applicant is honest, reliable, or has ever engaged in any improper conduct. Because of potential privacy concerns and liability for defamation, many former employers are reluctant to provide detailed information about former employees.
An employer should not ask any question that it would not ask the applicant; the focus of any inquiries should remain on the applicant’s ability to perform the job functions required by the position. The following are examples of illegal inquiries:
- prior workers’ compensation claims
- union support
- any matters that might lead to a charge of discrimination by the applicant, such as inquiries relating to:
- the applicant’s age
- national origin or ancestry
- sexual orientation
- marital status
- religion or religious preferences
- veteran or military status
- any other protected characteristic.
In most cases, employers should check the personal and prior employment references listed by an applicant and then document the information received, or, if not successful, the efforts made to do so. While the law does not require a written authorization from the applicant before references are called, employers normally should obtain such a broad authorization before conducting these reference checks. Additionally, employers might consider requesting a waiver from an applicant that releases former employers and the requesting employer from any claims relating to the reference check. With this type of waiver in place, a former employer may be willing to give more relevant information about their former employees. An employer also should make sure they have a fully completed application to use as a resource in the reference check, including:
- past employment history
- names of immediate supervisors
- educational background.
When contacting references, prospective employers should request basic information such as:
- dates of employment
- job duties
- performance assessments
- wage history
- discipline record
- tendency for violence
- circumstances surrounding discharge
- eligibility for rehire.
In addition to asking relevant questions and listening closely to the answers, a prospective employer should take careful notes of information given by a reference, as well as all unsuccessful attempts made to contact references. The notes should contain only legal information, even if the reference has provided additional information that the employer cannot legally use in considering the employment application.
When an employer is asked to provide information regarding a former employee, the employer should consider adopting a policy of providing only limited factual information to avoid being sued by a former employee alleging claims of defamation, slander, invasion of privacy, and/or retaliation. Under such a policy, employers should decline to volunteer any subjective, speculative, and/or undocumented information and provide only the dates of employment and the positions held by the employee.
Conducting informal Internet searches
With the advent of Google and search databases and various other social networking sites (for example, Facebook, Twitter, etc.), many employers conduct background checks of job applicants and employees using informal information sources. Use of the public information posted on these sites is not illegal, so long as the employer does not use the information to improperly weed out potential candidates.
Example: Many social networking sites will reveal a substantial amount of personal information about an applicant, such as the applicant’s:
- marital status
- political affiliation
- medical history
- sexual orientation.
Because this information is normally not found on a standard employment application, employers should keep careful records demonstrating that employment decisions were based on unbiased, legal considerations and not on Internet information that would otherwise be considered an illegal basis for an employment decision.
Conducting criminal record checks
Governor Pritzker signed Public Act 101-656 into law, amending the Illinois Human Rights Act (IHRA), the Business Corporation Act of 1983, and the Illinois Equal Pay Act of 2003. The Public Act became effective when signed on March 23, 2021. The amendments represent lawmakers’ attempt to eliminate racial inequalities caused by conviction records and address pay inequalities across gender and race. The amendments to the IHRA impact all employers who use criminal records in making employment decisions.
The IHRA now prohibits the use of conviction records to disqualify a candidate for employment or promotion, or to make other employment-related decisions, except in limited circumstances. Moreover, the IHRA now mandates employers to comply with new procedural obligations when a conviction record is considered and will be used to disqualify an applicant or employee from employment or subject a person to other adverse job actions. Specifically:
• Employers must engage in an interactive assessment before taking an adverse job action, and may take an adverse action only if they conclude that the “substantial relationship” test or, alternatively, the “unreasonable risk” test between the conviction and the job position, disqualifies the individual. The “substantial relationship test” compares whether the job at issue offers the opportunity for the same or a similar criminal offense to occur, and whether the circumstances leading to the conduct for which the person was convicted will recur in the employment position. In the alternative, an individual with a conviction record may be disqualified for employment if employment of the individual would create an unreasonable risk to property or to the safety or welfare of specific individuals or the general public.
- As part of the interactive assessment, employers must consider the following factors regarding the conviction and surrounding circumstances:
- the length of time that has passed since the conviction
- the number of convictions that appear on the individual’s conviction record
- the nature and severity of the conviction and its relationship to the safety and security of others
- the facts or circumstances surrounding the conviction
- the age of the employee at the time of the conviction
- evidence of rehabilitation efforts.
- Before taking any an adverse job action based on a conviction record, employers must comply with the following notice requirements:
- After making a preliminary decision, provide a written notice with the substantive basis for any disqualification decision, among other information, including that the individual has at least five business days to respond (an employer may grant the individual a longer period of time to respond).
- Wait at least five business days to allow the individual to respond with evidence regarding the circumstances surrounding the conviction or remediation.
- If an adverse action is taken, provide an additional written notice of the final decision containing: the disqualifying conviction(s); any procedure for the challenge or reconsideration of the decision; and, importantly, that the individual has the right to file a charge with the Illinois Department of Human Rights if he or she disagrees with the basis for disqualification.
- The new IHRA Amendment acknowledges that some laws prohibit employers from hiring persons with specific conviction records. In those instances, the employer still must notify the employee or applicant of their employment disqualification pursuant to law. The employee then has at least five business days to respond where the employee can dispute the accuracy of the relevant conviction record disqualifying their employment.
In addition, employers in Illinois may not make employment decisions based on arrest records. Employers in Illinois are also prohibited from making employment decisions based upon expunged or sealed convictions. Consequently, employers should be sure not to use arrest records or expunged or sealed convictions as a basis for not hiring an applicant and must notify applicants that they should not provide information about sealed or expunged records on a job application. After January 1, 2020, employers should be careful to confirm whether background check reports that include cannabis-related convictions have inadvertently disclosed information that should have been expunged when cannabis became legal.
Criminal background checks may be obtained from either the Illinois State Police or from private firms. Employers should obtain a signed authorization from the potential candidate after they have been deemed qualified for the position and either selected for an interview or given a condition offer of employment, agreeing to submit to a criminal background check as a condition of employment.
Some professions in Illinois are required to request criminal background checks.
Example - nursing homes and child day care centers must request a criminal background check either as part of the hiring or licensing process. Other health care workers, such as nurses providing direct care to patients, must submit to a criminal background check.
Conducting driving record checks
Employers may review the driving record of applicants for positions that would require the use of a company vehicle. Employers may also check driver’s license records for any applicant, to determine whether there may be any barriers to the individual getting to work on time. Driving record checks should be conducted before an applicant is hired and then periodically throughout employment. When checking the driving record of an applicant, employers should confirm that an applicant has a valid driver’s license and review any driving violations, particularly past violations involving reckless driving and driving under the influence of alcohol. Keep in mind, however, that under the ADA, alcohol-related convictions cannot be used to discriminate against an applicant perceived to be an alcoholic or with a record of alcoholism. Moreover, if the employer uses a third-party company to obtain this information, the Fair Credit Reporting Act (FCRA) may also be implicated.
Conducting credit checks
Credit checks may be performed on a limited basis, including for positions that involve certain financial responsibilities. The EEOC takes the position that credit checks may have an adverse impact on minorities. In addition, pursuant to Illinois state law, the use of credit history as a basis for making employment decisions is limited. Specifically, the law provides that private employers may use credit history information when making employment decisions when any of the following circumstances exist:
- The duties of the position include custody of or unsupervised access to cash or marketable assets valued at $2,500 or more.
- The duties of the position include signatory power over business assets of $100 or more per transaction.
- The position is a managerial position which involves setting the direction or control of the business.
- The position involves access to personal or confidential information, financial information, trade secrets, or state or national security information.
Outside of these carve-outs, Illinois employers may not base employment decisions on credit worthiness, credit standing, credit capacity or credit history. Therefore, it is a good practice to limit the use of credit checks.
Example: Conducting a credit check for a restaurant cook position with no financial responsibilities is inappropriate and likely unlawful, whereas conducting a credit check for a controller or accounts payable position is likely lawful.
If the employer runs a credit check for one candidate applying for a certain position, the employer should run a credit check for all applicants for that position. Typically, credit reports can be obtained through third-party entities that prepare such reports for a fee. As a result, the provisions of the Fair Credit Reporting Act (FCRA) discussed below govern employers that obtain credit reports from third parties.
Employers must get the authorization of the applicant before requesting any credit report. Employers should provide applicants with an authorization form for signature that is printed on a stand-alone page, and not a request for authorization that is merely included as an item on a general application. Before taking any adverse action based in whole or in part on a credit or background report, the employer must provide a copy of the report to the employee along with a summary of consumers’ rights provided by the credit-reporting agency.
Checking consumer reports
The FCRA includes significant compliance requirements for employers who seek and/or use credit checks or consumer reports in making employment-related hiring, promotion, and termination decisions. The term consumer report includes a credit check and is defined very broadly by the FCRA as any written, oral, or other communication from a consumer reporting agency bearing upon the consumer’s:
- credit worthiness
- credit capacity
- personal characteristics
- mode of living.
It includes records that are used in whole or in part to assess an individual’s qualifications for employment, such as:
- motor vehicle background
- criminal background
- medical history
- credit history.
These consumer reports must be generated by a consumer-reporting agency for the FCRA to apply. A consumer-reporting agency is also defined quite broadly. It is essentially any third-party business hired by the employer to obtain the information described above and could include private investigators, law firms, or any other business engaged to perform background checks. Generally, the FCRA does not apply to an employer’s actions to conduct its own reference checks by contacting former employers or otherwise checking public records or documents.
The following guidelines summarize some of the principal requirements imposed by the FCRA when an employer uses a consumer report in making employment decisions. Failure to follow the requirements of the FCRA could result in liability for civil fines, liabilities for damages, and even criminal prosecution.
Steps to take before obtaining a consumer report
Before obtaining a consumer report for the purpose of screening potential employees, or making any promotion, demotion, or discharge decisions regarding existing employees based upon the contents of the consumer report, an employer must first:
- have an employment purpose for obtaining the consumer report (that is, the report is used for evaluating a consumer for employment, promotion, reassignment or retention)
- give the affected individual written notice of the employer’s intention to obtain a consumer report in a document that consists solely of this notice
- get written permission from the affected individual to obtain a consumer report on that individual (Federal Trade Commission opinion letters indicate that an employer may combine the written notice and permission described in the previous paragraphs on a single form, but nothing else may be included on this form)
- certify to the consumer reporting agency from which the employer obtained the consumer report that it has complied with all applicable provisions of the FCRA.
Taking adverse action after obtaining a consumer report
If an employer intends to rely in whole or in part on information from a consumer report to take adverse action against an applicant or employee (that is, declining to hire, promote, or retain an employee), the employer must follow a two-step procedure:
- 1. send a Pre-Adverse Action Notice
- 2. send an Adverse Action Notice.
Pre-adverse action notice
The pre-adverse action notice is intended to provide the affected applicant or employee the chance to address and/or correct erroneous or incorrect information stated in the consumer report. If the employer is planning on taking adverse employment action based on information in the consumer report, the employer must take all of the following actions:
- notify the affected individual in writing that adverse action may be taken and describe the action
- enclose a complete copy, not part of or a redacted copy, of the report
- include a written notice of the rights of the affected individual.
For the third requirement, it is recommended that the employer enclose the FTC pamphlet describing rights under the FCRA that may be found at:
Adverse action notice
It is recommended that the employer allow the affected individual about a week to contact the consumer-reporting agency identified in the Pre-Adverse Action Notice before taking the adverse employment action. If the employer takes adverse employment action based on information in the consumer report, the employer must inform the affected individual in writing of:
- The fact that the adverse action has been taken (that is, declined to hire, retain, or promote the individual).
- The name, address, and phone number – the toll-free number, if there is one – of the consumer reporting agency that provided the consumer report.
- The fact that the consumer reporting agency that provided the consumer report played no part in the adverse action and therefore cannot provide the individual with the specific reasons why the adverse action was taken.
- The fact that the individual has the right to a free copy of the consumer report in question from the consumer reporting agency that provided the report if the request is made within 60 days from the date the action is taken.
- The fact that the individual has the right to dispute with the consumer reporting agency the accuracy or completeness of the report furnished.
Retention of notice
Employers are required to keep copies of consumer reports they have received and notices sent for two years.
Where to go for more information
For additional information, employers can review the FTC guidance at: