Home health care is one of the fastest growing industries in the United States. As the population continues to age, the demand for home health care is expected to increase dramatically. One of the several challenges facing the home health care industry is selecting qualified and trustworthy individuals to provide unsupervised patient care to a vulnerable population. Conducting criminal background checks on prospective employees is one practice that employers in the home health care industry should implement to select a qualified and trustworthy workforce, but conducting background checks presents its own challenges, given the number of federal, state, and local laws, as well EEOC guidance, that employers must comply with when conducting background checks.

State Requirements

There are no federal laws or regulations that require home health agencies (“HHAs”) to conduct criminal background checks or disqualify applicants from employment based on the results.^[1] There are, however, 41 states that require HHAs to conduct criminal background checks. The requirements in those 41 states vary widely, including when the background check must be completed, what sources of information must be checked, which positions require background checks, and which convictions, if any, result in disqualification from employment.

In addition, the Affordable Care Act established the framework for a Nationwide Background Check Program, which provides grants to states to implement statewide background checks on all prospective direct patient access employees of long-term care facilities and providers, including HHAs. CMS has awarded more than $50 million to 26 states to design comprehensive background check programs for direct patient access employees.^[2]

EEOC Guidance

In addition, HHAs should be mindful of the EEOC’s position on the use of criminal history in hiring decisions. Over the past few years, the EEOC has taken an aggressive stance on employers’ use of criminal background checks because the agency believes that such background checks disproportionately affect minorities. In 2012, the agency issued updated guidance cautioning employers that hiring decisions based on criminal history should be job-related and consistent with business necessity. The guidance directs employers to conduct individualized assessments for applicants excluded by a criminal background check by considering the following factors: the nature and gravity of the offense or conduct; the time that has passed since the offense, conduct, and/or completion of the sentence; and the nature of the job held or sought.

Since issuing its guidance, the EEOC has filed numerous disparate impact discrimination lawsuits challenging criminal background check policies and practices. While the EEOC has suffered a number of defeats, it recently entered into a $1.6 million settlement with BM^[3] concerning the company’s background check practices. Given the EEOC’s recent success, it likely will continue to challenge employers’ use of criminal background checks that it believes has a disparate impact on minority groups.

Thus, HHAs should proceed with caution when making ultimate employment decisions based on the results of criminal background checks. For those criminal convictions that do not result in automatic disqualification from employment per applicable state laws, HHAs should consider conducting an individualized assessment prior to excluding an applicant based on criminal history. HHAs should also consider carefully limiting the circumstances in which an applicant may be automatically excluded from employment based on certain convictions in light of EEOC's guidance.

“Ban the Box” Legislation

HHAs also must be aware of the number of states, counties, and cities that have passed ban-the-box legislation limiting the use of criminal records in hiring. There are currently seven states (Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, and Rhode Island) and more than 100 counties and cities (including Baltimore, New York City, Newark, Philadelphia, San Francisco, Seattle, and Washington, DC) that have enacted legislation covering private employers. Generally, ban-the-box legislation restricts the timing of when an employer may inquire about an applicant’s criminal history (e.g., after the first interview or after a conditional offer has been made), but some of the laws (e.g., in New York City and Philadelphia) require employers to consider a list of factors before disqualifying an applicant based on criminal history. HHAs should determine whether they are subject to ban-the-box legislation, as certain laws specifically exclude HHAs from coverage (e.g., Washington, DC’s law does not apply to employers that provide “direct care to minors or vulnerable adults”), and comply with the applicable timing limitations, as well as any other requirements, when conducting criminal background checks.

Fair Credit Reporting Act

Although no federal laws require HHAs to conduct criminal background checks, if an employer uses a third party to prepare its background reports, it must comply with the federal Fair Credit Reporting Act (“FCRA”), as well as any state background check laws. FCRA imposes a number of procedural requirements in connection with the background check process. Within the last two years, the number of FCRA class actions has skyrocketed. These litigations focus on the employers’ compliance with disclosure requirements; specifically, whether employers have violated FCRA’s standalone disclosure requirement by including the disclosure in the job application^[4] or by incorporating at-will or EEO language in the disclosure document.^[5] In addition, class actions also have questioned the adverse action requirements, which require the employer to follow a two-step process of sending a pre-adverse action letter followed by an adverse action letter if it intends to take an “adverse action.”^[6]

The recent class actions demonstrate that compliance with FCRA is critical when HHAs make their hiring decisions. Given the hyper-technical FCRA requirements, HHAs should consider arranging for a privileged review of background check forms, notices, disclosures, and templates.

Carefully navigating the various federal, state, and local laws, as well as the EEOC’s guidance, when conducting background checks may prove challenging for HHAs, but it is a critical step in hiring a qualified workforce in this industry.

^{[1] The Office of Inspector General (“OIG”) has authority to exclude individuals and heath care entities from federally funded health care programs based on conviction of certain crimes. Excluded individuals are posted to the OIG’s List of Excluded Individuals and Entities. Health care entities are required to regularly check the list to avoid hiring excluded individuals or billing for services rendered by excluded individuals but are not required to independently conduct background checks.}

^{[2] See Centers for Medicare & Medicaid Services, CMS National Background Check Program, https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/BackgroundCheck.html.}

^{[3] EEOC v. BMW Manufacturing Co., LLC, D.S.C., No. 7:13-cv-1583.}

^{[4] The current protected categories under the FEHA are as follows: race, religious creed (including religious dress and grooming practices), color, national origin (including language use and possession of a driver’s license issued to persons unable to prove their right to be present in the United States under federal law), ancestry, physical disability, mental disability, medical condition (including cancer and genetic characteristics), genetic information, sex (including pregnancy, childbirth, breastfeeding, or a related medical condition), gender (including gender identity and gender expression), age (40 and over), military and veteran status, and sexual orientation. Cal. Gov’t Code §§ 12940, et seq.}

^{[5] Mack v. Panera, S.D. Fla., No. 14-cv-61672.}

^{[6]Jones v. Halstead Mgmt. Co., LLC, S.D.N.Y., No. 14-cv-03125; Ramos v. Genesis Healthcare, LLC, E.D.Pa., No. 15-cv-00052.}