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The legalities of criminal, credit and medical checks in HR

This article examines whether the legalities of criminal, credit and medical checks, and what types of limits are associated with them.

From time to time, I get questions from employees and companies alike about the legalities of performing various forms of background checks in the hiring process. While thankfully these issues do not come up too frequently, three forms of checks which cause particular concern are criminal record checks, credit checks, and medical checks.

While requests for this type of sensitive personal information are far more common in the United States, they continue to be applicable in Canada as well. In this article, we will examine whether these requests are legal and if so, what types of limits are associated with them.

Criminal background checks

Under the British Columbia Human Rights Code, it is illegal for an employer to discriminate on the basis of a criminal record unrelated to employment. To this end, employers need to be careful when requesting criminal background checks, and these should only be requested of individuals where certain criminal convictions violate a reasonable and bona fide requirement of the job. To determine a bona fide occupational requirement, employers must consider the following questions, which I’ll call the “Justification Test”:

  1. The employer has adopted the rule for a purpose that is rationally connected to the performance of the job;
  2. The employer adopted the particular rule in an honest and good faith belief that it was necessary to the fulfillment of that legitimate work-related purpose; and
  3. The rule is reasonably necessary to accomplish that legitimate work-related purpose.

It is common for people working with children to undergo criminal record checks. It is also common for individuals working with large amounts of money to undergo a criminal record check. Take, for example, a company looking to hire an accountant as their CFO. They require a criminal background check to demonstrate that the applicant does not have a history of theft or fraud. In this case, the “rule”, as referenced above, is that the applicant must not have a fraud conviction. This rule is rationally connected to the performance of the job. This rule is also created in good faith and is necessary to accomplish a legitimate work-related purpose. Although the rule discriminates on the basis of criminal conviction, the discrimination is justified as it is reasonably connected to job performance.

Assume that the same CFO is shown to have a conviction for assault or for driving under the influence. In this case, there is likely no reasonable connection between the job requirements and these criminal convictions. If the employer terminated the employee or refused to hire the individual on this basis, it would likely be viewed as discriminatory and could create a liability under human rights law.

To summarize, a decision not to hire someone based on the fact that he or she has a criminal record is discriminatory under the Code. However, an employer would not be in violation of the law if it makes the decision regarding employment based on a record of offense that closely relates to an important quality of the job.

Credit checks

An employer may perform a credit check on an employee or prospective employee if the employer intends to use the information for legitimate employment purposes. Such purposes include considering new hires, granting promotions, reassigning employment duties or determining whether to retain someone as an employee.

For prospective employees, the credit check should be completed only after a conditional offer of employment has been made in writing. The main reason being that non-financial information about the candidate may be discovered through the credit check process; if the information concerns protected grounds of discrimination and a decision is made not to hire the employee, the employer could become exposed to liability. For current employees, we recommend completing a credit check only when a decision has otherwise been made in respect of promoting or retaining the employee.

Before conducting a credit check, the Business Practices and Consumer Protection Act requires an employer to receive written consent from the applicant or employee that a credit check will be performed. All such written communication must be in the format prescribed by the legislation.

In British Columbia, as in other jurisdictions, an employer may perform a credit check on any employee or prospective employee, for any job. There is no prohibition in the Human Rights Code on declining to hire a candidate based on the results of that person’s credit history. An employer may refuse employment on the basis of a credit report, but it is important to recognize that any information collected on the individual is subject to the Personal Information Protection Act, and must be made available for production for at least one year following the date that the information was collected.

Medical examinations

In limited circumstances, an employer may require an employee to undergo a medical examination to ensure that a candidate is able to perform the essential duties of the occupation. A requirement to undergo medical examinations are generally limited to positions with significant physical demands. Examples of positions which have may medical examinations include police officers and firefighters, construction workers in certain industries or painters.

The employer should advise prospective employees of any specific and genuine medically related requirements of a position at an early stage of the recruitment process. Pre-employment medical assessments should only be requested after a conditional offer of employment has been made and should be limited to determining an individual’s ability to perform the essential duties of the job. In order for a request to be made, the Justification Test described above must be met.

A common scenario requiring a medical examination is for physically demanding positions. If a job legitimately requires an employee to lift 50 lbs, perform frequent deep squats, or regular work above their head, a medical examination may be legitimately required to demonstrate that the employee satisfies the bona fide occupational requirements of the position. Requests for an employee’s medical information can also be made to existing employees to determine their ability to fulfill essential functions of his or her job.

If a candidate is unable to perform the essential duties of his or her job due to physical limitations, then an employer is not obligated to extend an offer of employment. However, before an employee is determined incapable, the employer must consider options for accommodation. An employer is not entitled to medical information that discloses a disability or medical condition. Rather, the employer is only entitled to information regarding restrictions on the applicant’s or employee’s ability to perform the essential duties of the job.

If the position being hired for does not present significant physical requirements which cannot be accommodated, then we recommend being very cautious in requiring employees and prospective applicants to under medical examinations. Collecting medical information, whether regarding physical capacities or medical conditions, is extremely sensitive information which in most instances will serve no purpose in creating or managing the employment relationship. Furthermore, collecting and relying on medical information may create liabilities under human rights law.

For instance, assume that an employer is looking to hire an employee to oversee a conveyor belt. The position requires the employee to stand for significant portions of the day. A potential employee applies for the position and is offered the job, contingent on a successful medical examination. During the medical examination, it is revealed that the employee has an old hip injury which prevents her from standing for longer than one hour at a time.

In this instance, it would likely be considered a violation of human rights law to refuse to hire the person based on the hip injury without considering accommodation options. Could the workplace be accommodated by allowing her a stool or regular breaks to ease the limitations of her disability? Is the ability to stand for long periods an essential duty of the job? And what if the medical examination reveals other physical or mental limitations unrelated to job functions? My concern is that this information creates potential human rights liability.

Conclusions

Many employers requesting personal information of this nature may consider the requests to be legitimate in creating or maintaining the working relationship. However, they should be careful what they wish for. While there is nothing improper in itself to request criminal background and credit checks from potential and current employees, this information does raise concerns under human rights and privacy laws.

Ultimately, employers should be asking what the purpose of this information is, and whether we need to be gathering sensitive personal information of this nature for legitimate employment related purposes. While I would understand that certain positions (such as those where there is a risk of fraud or theft) may justify a criminal record check, for many positions, a criminal record check does not provide any valuable information regarding job suitability.

The same can be said for credit and medical checks. If an applicant has a poor credit history, would this disqualify him or her from the job? If the answer is uncertain, do we need this information in order to properly assess their candidacy? If the position does not require any notable physical requirements, is a medical exam necessary? It is my opinion that in most cases, the information collected in these reports will have little value in assessing whether an employee is capable of the performing essential functions of the position, while also creating unnecessary risk under human rights and privacy law.

By David M. Brown at Kent Employment Law, BC Employment Law blog

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