By adding background checks to the screening process for new employees, employers can verify applicant information, reduce the risk of theft and workplace violence and improve the general quality of the candidate pool.
Prior to performing any background screening, the employer should have a written policy in place which describes the details of the screening process. Some of the information that may be included is a description of who will be screened (i.e., applicants only, all employees, managers only), when screening will occur (i.e., pre-employment only, annually), what paperwork is necessary, what type of background check will be performed, who will have access to the information, who will decide how the information will be used, and who will be responsible for adhering to the Fair Credit Reporting Act (FCRA) and state law compliance.
Employers should consult legal counsel regarding how they use potentially adverse information as part of their hiring criteria. For example, many states prohibit the use of an applicant’s arrest record (as opposed to convictions) when making a hiring decision. Also, decisions based on criminal convictions may be subject to the nature/gravity of the offense, the time that has elapsed since conviction or sentence completion and the nature of the job assignment.
In general, employers will find it more cost efficient and accurate to hire a third-party background screening company. Many of these background screening companies are members of the National Association of Professional Background Screeners and will provide information to the employer about the legal requirements of the screening process.
The FCRA defines screening companies as “consumer reporting agencies” and the background reports are defined as “consumer reports.”
Under the FCRA, employers must:
1. Have a written disclosure to the individual that a consumer report will be obtained. This disclosure must occur before the background check is obtained and it must be a separate document from the employment application.
2. Obtain written authorization from the individual prior to requesting the consumer report.
3. If the employer plans on taking any adverse action based on the consumer report, the employer must provide two notices to the individual – one notice before taking adverse action and another when the adverse action occurs.
4. Before taking the adverse action, the employer must provide applicant/employee with a copy of the consumer report and a summary of the applicant’s/employee’s rights under the Act (these rights can be found at www.ftc.gov)
5. After providing this information the employer must wait for a period of time (usually 5 days) before taking the adverse action. This waiting period allows the individual to identify any inaccuracies in the consumer report.
6. Upon taking the adverse action, the employer must provide the individual with a Notice of Adverse Action taken, the contact information of the consumer reporting agency, and a notice of the consumer’s right to dispute the accuracy of the report with the reporting agency.
Employers should also make sure background checks have been performed on their temporary workers and independent contractors. If the employer is using a staffing agency, the employer must inform the staffing agency the employer has a background screening policy. All applicants that the staffing company refers should be screened and all FCRA and state laws followed, including getting written authorization from the applicant.
Bruce E. Loren & Associates specializes in drafting policies to enable your company to conduct background checks in compliance with applicable laws, and in advising businesses in the appropriate use of information obtained from background searches. Bruce E. Loren & Associates is an AV-rated business and construction litigation law firm, also specializing in all employment-related issues for our clients. If you have any questions about this article or any employment-related issue, please contact Bruce Loren or Cara Barrick.