Legal Mandates in Criminal Background Checks: An Evaluation of Disparate Impact in New York State

Abstract

This paper presents a stylized model of “disparate impact”, showing that background check decisions could create unequal opportunities for minorities since minorities are more likely to have certain types of criminal records. We evaluate a state mandated criminal background check for employment, implemented by the New York State Department of Health (DOH). The DOH process follows a statute that determines certain crimes as automatically disqualifying from and certain others as automatically approving of employment. We show that adding these legal mandates to a statistically optimal approach which considers all factors of a conviction record, does not add any predictive power to decision-making but inadvertently leads to a disparate impact on minorities. The paper concludes that over-reliance on such mandates generates inefficient and inequitable outcomes.

Keywords: Criminal Background Checks, Employment, Disparate Impact, NYS Executive Law

JEL Classification: J48, J60, K31, K40