Since 2021, Envoy has been working to demystify how employers should consider negligent hiring liability in their background screening processes. Over the past 40 years, concerns over the potential legal exposure from hiring people with past convictions has led many employers to pass over–or significantly narrow–this 80 million person candidate pool.
The Equal Employment Opportunity Commision guides employers to only consider recent and job-related convictions when assessing risk. Without clear standards and definitions, this puts employers in the unenviable position of trying to predict the relevance of a given conviction. Many employers lean toward risk avoidance and as a result disqualify excellent candidates. But increasingly, the field is learning that the legal history of negligent hiring demonstrates a far narrower interpretation of “job-relevance” than employers may assume. Additionally, states that have taken steps to protect employers against negligent hiring risk are seeing improved outcomes on recidivism and employment for people with past convictions. This summer, two important research pieces came out underscoring these findings.
The first, published in July by Lewis Maltby and Roberta Myers Douglas of Legal Action Center reviewed verdicts in negligent hiring cases and found seven specific risk factors that employers should consider when assessing the relevance of a conviction to a specific job, particularly if they are risks that arise performing the day-to-day responsibilities of the role. These risk factors include access to vulnerable populations (such as elderly people and children), driving, and access to financial assets and information. This research suggests that when both the job and the recent conviction relate to these risk factors, the employer should flag the applicant’s case for an additional review, but when these risk factors are not present, employers face negligible risk.
The second report, published last month by Ben Pyle of Boston University School of Law studied the negative consequences of employers’ risk aversion. Pyle found that states with protections for employers that clarify and reduce negligent hiring risk saw improvements in employment and reductions in recidivism for people with past convictions. This is a groundbreaking finding and underscores two themes we have learned in our work with employers: companies facing lower liability will expand Fair Chance practices, and those practices will have a net positive impact on their communities.
These studies add to a growing number of reasons employers should revisit their hiring and background check processes, including findings suggesting that candidates with past convictions often have the same or better on-the-job outcomes than their peers, including stronger retention and advancement. So how should employers put these learnings into practice?
Conduct an individual assessment for every candidate flagged for a conviction to fully understand and evaluate the job-relevance of the conviction
Consider building a “green-light” hiring matrix, pre-identifying the conviction categories that are irrelevant to your job categories based on risk factors outlined by Legal Action Center and other regulatory or business constraints you may face. Share these green-lighted conviction categories with your background screening provider to omit them from reported background check results.
Envoy has been working with employers to improve and modernize background screening practice in these areas, while also contributing to the research by coding a dataset of 4300 negligent hiring cases and settlements to expand our understanding of the legal history. We help employers reach the most qualified candidates by creating processes that ensure the highest level of inclusivity of candidates.