Don’t Put Background Checks on the Back Burner

Don’t Put Background Checks on the Back Burner

Background checks are a valuable part of your hiring process. They can assess and confirm a candidate’s experience and qualifications, making sure they’re the right match for your needs. These screenings can also help you avoid litigation related to negligent hiring.

But, without proper strategies in place, background checks themselves can leave you vulnerable to discrimination claims, privacy violations and other legal liabilities.

Use these six approaches to maintain compliance and enhance the value of your background checks:

  • Be transparent.
  • Be selective.
  • Be consistent.
  • Be open to explanations.
  • Be aware of applicable laws.
  • Be vigilant about third-party vendors.

Be transparent

The Fair Credit Reporting Act (FCRA) requires you to inform job candidates that you are using a background check to help with hiring decisions. This notice must be separate from your application.

In addition, you must get the candidate’s written consent to perform the check. If the report leads you to eliminate them from consideration, you must give them a copy of the report and their rights under the FCRA.

To be transparent, succinctly explain your business reasons for requiring a background check. Then provide a link through an online portal, email or text message. This link should direct candidates to a user-friendly screening process that allows them to quickly fill out the necessary information.

Be selective

A full background check is rarely required. Assess which information is most pertinent to open roles at your company. Common examples include job history, education and references to verify applicants’ qualifications.

The extent of the background check is typically tied to the nature of the job. For example, background checks for high-level financial roles might include credit reports and criminal histories related to fraud or other money matters.

ADP recommends conducting a background check after making a conditional job offer rather than doing it for all applicants. Beyond being a best practice, this is mandated by some state and local laws.

Be consistent

Use background checks consistently and equally. You can alter the process to make the search more robust for highly sensitive positions within your company. But you cannot require a background check for some candidates and not for others if they’ve applied for the same position. This practice could violate equal employment opportunity laws and give rise to discrimination claims.

Say your background check reveals that a candidate has a criminal record. You can dismiss them only if you would have done the same for any other candidate with a criminal record, regardless of race, gender, age or another protected characteristic.

Be open to explanations

People make mistakes. But individuals can also learn and change. Don’t be quick to dismiss candidates based solely on criminal history.

Automatically eliminating every candidate with a criminal record could subject you to discrimination claims. The Equal Employment Opportunity Commission (EEOC) requires employers to demonstrate that a denial based on criminal history is related to the job and business necessity.

In addition, you should give candidates an opportunity to explain any situation that might disqualify them from consideration. This can bolster your organization’s reputation and help you avoid claims of unlawful hiring practices.

Be aware of applicable laws

Staying compliant with background checks starts with understanding federal, state and local laws.

The federal FCRA explains employer requirements regarding consent, disclosures and notices when using a third-party vendor to conduct background checks. Many states have their own versions of the FCRA, too, so be sure you’re in compliance with those as applicable.

In addition, you must be aware of state and local laws that ban employers from including criminal history inquiries on job applications.

Certain states prohibit you from making hiring choices based on credit reports. You must be able to prove your business reasons for requiring this information as part of a background check.

The privacy of your candidates is another important legal matter. Information found in background checks can only be used to make a hiring decision. It must not be shared with anyone who isn’t directly involved in the hiring process.

Be vigilant about third-party vendors

Your job candidates aren’t the only ones who need vetting. You should also perform due diligence on vendors that provide background checks.

As mentioned above, third-party providers must comply with the FCRA. The FCRA allows individuals to file class-action lawsuits for failure to use qualified forms or provide proper notice, among other core tasks. These suits can lead to liability for up to $1,000 per claimant, not to mention legal fees, court costs and punitive damages.

Legal responsibility ultimately lies with the employer, not the vendor. So you’ll want to be thorough. Examine the vendor’s reputation and experience, talk to current and former clients, and thoroughly examine the forms and processes they use for your candidates.

The Professional Background Screening Association runs an accredited program for screening companies to demonstrate best practices, legal compliance and consumer protection.

More information

To get more out of your background checks, talk with us. We can help you find reputable third-party providers to conduct your employee screenings. If you perform background checks in-house, we can provide the latest compliance news and best practices.

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