Background Checks and compliance - where to start?

  • 7/11/2017
  • Raquel Trevino
Background Checks and compliance - where to start? image

As an employer, you want to ensure that you have the right people in the right place to meet and fulfill your business needs. From hiring, retention, promotion or reassignment, there are ways to evaluate your candidate or employees. But before you do let’s recap on a few important facts. 

Before You Get Background Information

In all cases, make sure that you're treating everyone equally so you have no compliance issues with the Equal Employment Opportunity Commission (EEOC). It's illegal to run background checks on applicants and employees when that decision is based on a person's race, national origin, sex, religion, disability, genetic information (including family medical history), or age (40 or older). For example, asking only people of a certain race about their financial histories or criminal records is evidence of discrimination.

Except in rare circumstances, don't try to get an applicant's or employee's genetic information, which includes family medical history. Even if you have that information, don't use it to make an employment decision. (For more information about this law, see the EEOC's publications explaining the Genetic Information Nondiscrimination Act, or GINA.) Don't ask any medical questions before a conditional job offer has been made. If the person has already started the job, don't ask medical questions unless you have objective evidence that he or she is unable to do the job or poses a safety risk because of a medical condition.

Policies and Procedures

If your business performs pre-employment screening in-house or by a third-party be sure to have proper written policies and procedures. This will allow you to have a good foundation to implement and educate your resources to comply with the FCRA and EEOC regulations to avoid any potential claim.

If you aren’t an HR person at heart, documentation will not be your favorite thing. But hear me out, if you document policies and procedures that are in compliance with federal, state and other regulatory entities that your business may be affiliated to, the process will be so much easier. The definition of policy itself is key, a course or principle of action adopted or proposed by a government, party, business, or individual.2 Once you have it in place, everyone involved in the evaluation process will have the same standards, which reduces your risks of discriminatory claims or non-compliance.

But what if it is outsourced?

Even if you receive the information from a legitimate background check company, which do not include those instant online searches, CRAs or Consumer Reporting Agencies are regulated by the FCRA and FTC to ensure that there is no misuse of information. You need to have a procedure that guides your hiring staff on how to handle the information from the moment it is requested to the candidate or employee.

Make sure all forms used are in compliance with the FCRA: how questions are worded, if it has to be on a stand-alone form, if you need to provide additional forms based on your state regulations, and so on. And let’s not forget that you need to have a defined job description! Once you collect all the information, you need to ensure all evaluations are done under the same standards. Lastly, it is best if you have just the information you need, in these cases more is not always best. Limit your background screening data to the requirements of the position. For example, if the position is not related to handling of cash or access to financial information, don’t request credit reports.

What happens next?

Let’s talk Adverse Action. It is a very delicate process to refuse someone for a job position, and it must be done as stated by the FCRA and your company’s procedures. If a candidate/employee is refused a position based in whole or in part by the information found on the background check report you must comply with what is called Adverse Action. This is a two-step process that the FCRA has deemed mandatory to ensure that the candidate/employee has time to evaluate the information found on the background check report is accurate.

Then there is the disposing of files that contain personal information. Any personnel or employment records you make or keep (including all application forms, regardless of whether the applicant was hired, and other records related to hiring) must be preserved for one year after the records were made or after a personnel action was taken, whichever comes later. Other areas such as medical and education have additional record preservation clause, make sure to review if that relates to your business.

These are a few basic compliance matters that cannot be overlooked. If you have any questions regarding any of the topics discussed here don’t hesitate to reach out to us!