The Hidden Impact of ‘Disparate Impact’

disparate impactIf you have been following our posts about disparate impact, you are familiar with the fact that the EEOC has stepped up efforts to enforce rules around employment discrimination based on it. Disparate impact may occur when a company’s employment policies have disproportionate “adverse impact” on members of a protected class under Title VII of the Civil Rights Act, as compared with non-members of the protected class (Wikipedia).

This kind of discrimination is inadvertent, an innocent consequence of applying the exact same standard to every applicant. In our most common example, the fact that young black males are disproportionately convicted of crimes means that a background check policy applied equally to everyone may very well exclude a disproportionate number of young black males.

The Employer’s Disparate Impact Dilemma

As the Economist states, this places employers “between a rock and a lawsuit.” State law often prohibits hiring individuals with criminal convictions from being employed in specific kinds of occupations. And more generally, employers need to evaluate potential employees to ensure a good fit with available jobs. But the doctrine of disparate impact also mandates that applicants not be excluded because of membership in a protected group. And according to the EEOC, the Guidance trumps conflicting state law.

EEOC Guidance recommend that employers use ‘individualized assessments’ to determine if a specific applicant can be excluded, looking at criteria such as the relevance of a conviction to a specific job or the length of time since the conviction. Tactics like these attempt to square the circle, modifying a background check policy to require extra steps to determine if an applicant is appropriate. Obviously, these extra steps cost money.

In essence, employers are being asked to do two things at once: comply with business and state law priorities to make sure the “wrong” person is not hired for a job, and comply with EEOC Guidance to make sure a criminal conviction does not disproportionately exclude members of a protected group. Does this kind of background screening process promote social justice?

The Social Goal of Employing Those with a Checkered Past

Before we had the neutral-sounding term disparate impact, we might have referred to the same policy as “unintentional discrimination.” In the most straightforward sense, a standard background policy applied to every applicant equally should be seen as fair.

But the underlying aim of the EEOC is to engineer a social outcome that increases job opportunities for those with criminal records, many of whom are also members of protected groups. The rationale is that, over time, allowing employment policies to produce disparate impact outcomes would make an increasingly large group of long-term unemployed – and unemployable – people in one of the protected groups. Further, many believe employment is the most important way to reduce recidivism and support socially desirable behaviors, both of which can lead to lower crime rates. Therefore, it is reasoned that a person should not be excluded automatically from employment on the simple basis of a conviction.

And this is where the dilemma lies. As employers we’re responsible for providing a workplace that is safe, secure, and free of violence. At the same time, we’re responsible for the social good of breaking down barriers to employment for ex-offenders.

However the cost of implementing this policy is borne by every employer who modifies his or her background check process to ensure compliance with the EEOC guidelines.

Is it worth it?

We cannot answer that big question, and we don’t think the EEOC can either. But we do know that background screening procedures can be devised to meet both requirements. Further, with careful planning, the costs may be lower than you think. A successful anti-discrimination suit against an employer can be so expensive that the costs of doing screening the right way in compliance with the EEOC Guidance  is minimal in comparison.

Ask us about designing a compliant background screening policy for your company.


Human capital risk infographic

About MichaelGaul

Michael is a results-oriented marketing executive with over two decades of experience in employment screening, physical security, and business process management. Michael has deep experience in human capital risk management and a passion for educating business leaders and HR professionals on strategies that tangibly protect their interests. Michael serves on the Board of the Secure Cash and Transport Association (SCTA) and is a member of the Professional Background Screening Association (PBSA), and the American Society of Industrial Security (ASIS).
View all posts by MichaelGaul →