Employment Background Check Guidelines:
Conducting background checks is both necessary and extremely risky — Business Management Daily, publisher of The HR Specialist and HR Specialist: Employment Law, has created this targeted report for employers and human resources professionals.
Employment Background Check Guidelines shows employers and HR professionals how to properly conduct reference/background checks, select third-party background firms and why screening candidates online on social networking sites is legally risky business.
Employers and HR professionals should make it their policy never to hire a candidate without an employment background check. Your organization could be held liable for “negligent hiring” or “failure to warn” should an employee turn violent on the job.
When conducting a job background check, make sure you comply with the Fair Credit Reporting Act, which regulates not only credit background checks but also checking criminal records and driving records.
Employment Background Check Guidelines: #1
Make sure you comply with the Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) regulates how employers perform an employment background check on job applicants. Contrary to popular belief, this federal law doesn’t cover just credit background checks. It covers any background report, such as driving records and criminal records obtained from a “consumer reporting agency” (CRA).
Under the FCRA, you’re typically free to conduct an employment background check and use the information if you have a clear business interest, such as hiring, firing, reassigning or promoting someone.
Editor's Note: For more information on the Fair Credit Reporting Act, visit www.BusinessManagementDaily.com.
But you can’t run a job background check on a whim. You must receive the person’s written permission before obtaining the report.
Two trends now compel more employers to conduct an employment background check. First, terrorism threats and incidents of workplace violence have made companies more aware of the need for job background checks.
Second, “negligent hiring” lawsuits are on the rise. Companies have a “duty of care” to protect workers and customers from employees the company knew—or should have known—posed a security risk.
Learn about the FCRA notification rules you must follow before obtaining a consumer report on an applicant or employee, or withholding a job offer based on an employment background check, in Employment Background Check Guidelines.
Employment Background Check Guidelines: #2
Steer clear of negligent-hiring lawsuits
If you fail to do an employment background check on applicants for certain positions, you could make your organization vulnerable to a negligent-hiring lawsuit by any worker or customer who’s been hurt by a violent employee.
A number of court decisions have established the principle that an employer has a “duty of care” to protect workers, customers and clients from injury caused by an unfit employee who an employer knew (or reasonably could have been expected to know) posed a risk.
For an employer to be held liable for negligent hiring, the plaintiff must prove:
1. An employee intentionally injured a co-worker, customer or client
2. Few, if any, pre-employment checks were performed, and that if they had been, those checks would have likely revealed a worker’s propensity toward violent behavior; or
3. The employer, knowing a worker’s propensity toward violence, did not provide proper supervision and security.
Employment Background Check Guidelines: #3
Checking references: Legal safeguards
Contacting an applicant’s former employers is an essential step in conducting an employment background check.
Caution: Keep in mind that you can’t ask a reference any questions you are prohibited from asking an applicant. Restrict your inquiry to job-related issues.
You must also check information furnished by all candidates without discrimination against any group. Many employers have been snagged for making cursory checks of white applicants but probing more deeply in the case of minorities.
Employment Background Check Guidelines: #4
Background-checking firms: Sort out the best from the rest
Not too long ago, just a few dozen companies offered employment background check, credit background check and criminal check services. But the industry mushroomed in size and scope—though not necessarily quality—after post-9/11 security concerns and ethics scandals drove up the demand for increased background screening.
The result: Nearly 1,000 vendors are in the screening industry now, making it difficult to sort out the top tier from the fly-by-night firms. Many sell cheap but incomplete background checks in minutes. Too often, they simply restate old information bought from private data brokers with no guarantee the data are current or correct.
Follow the benchmarks for gauging background-screening providers in Employment Background Check Guidelines.
Employment Background Check Guidelines: #5
Screening candidates: To Google or not to Google?
HR professionals and managers increasingly use search engines and social networking sites (like Facebook) to dig beyond the typical résumé and cover letter. Many of the “red flags” uncovered include Web postings by the candidates themselves—postings that the person obviously didn’t expect job recruiters ever to see.
The problem: Googling candidates can carry certain legal risks.
What if you Google only minorities? What if you inadvertently view information about a different person with the same name? What if your search shows a picture of the person in a wheelchair? All scenarios could raise discrimination charges if you reject the candidate. Two tips to avoid such legal risks:
1. Make sure you’ve got the right person. Even relatively rare names are duplicated, and many tall tales exist in cyberspace. “The way to deal with that is to bring (the Google result) to the person’s attention,” says Joe Beachboard, an employment lawyer with Ogletree Deakins in California. “I would always give the person the opportunity to confirm or deny it.”
2. Be consistent with your searches. As with other recruiting tools, you shouldn’t discriminate when Googling based on the person’s race, age, gender or name (national origin bias). Realize that Googling may pull up photos, which means you may have to explain whether you considered the individual’s race/age/disability in your hiring decision.
Employment Background Check Guidelines: #6
How to protect yourself from Internet-related liability
When employers gather information about job candidates through websites such as Google, Facebook and Twitter, they expose themselves to discriminatory failure-to-hire lawsuits.
When it comes to discrimination, ignorance is often bliss. It’s impossible for an employer to discriminate based on information it does not have. Usually, employers take care not to ask applicants about their age, race, gender, disability or other protected characteristics. But viewing a candidate’s Facebook page may provide some of that information—and possibly much more. By accessing such information, the employer loses the ability to claim ignorance.
On the other hand, using the Internet in an employment background check can provide valuable information that the employer might not otherwise learn. Employers need to balance the risks and benefits.
Advice: Don’t consider the Web a reliable substitute for traditional hiring practices. A YouTube video may provide a glimpse of a candidate’s personality, but a face-to-face interview will probably reveal much more of a candidate’s true personality. Plus, it won’t expose your company to liability.
Employment Background Check Guidelines: #7
Should employment background checks include sex-offender registries?
Each state’s law is different. That means employers must check the rules before using sex-offender registry information. For instance, California law prohibits employers from searching for a job applicant’s name on the registry unless they can demonstrate they are doing so to protect a “person at risk.” But the law doesn’t clearly define “person at risk.”
Employers in most states can—and probably should—scan the registry if an applicant will work around children or the disabled on the job, or will work unsupervised in people’s homes.
Several states require employers to notify applicants if they plan on checking a sex-offender registry. Again, laws vary by state—a common regulation requires providing a public record to the applicant within a certain number of days.
Other convictions: Always check state law to see how you can use criminal convictions when making hiring decisions. Most states have a statewide criminal record database, which can be searched—usually for a fee. Call your local police department to find out which state agency handles criminal records in your state.
Employment Background Check Guidelines: #8
Prevent new type of lawsuit: Credit-check discrimination
If your organization uses credit background checks in the hiring process, you’d better have a sound business reason for doing so or you could face a new type of litigation: Minorities who’ve been turned down for jobs because of their credit history are arguing that employers are using credit checks as a way of illegally discriminating against minority applicants.
Credit background checks are becoming increasingly popular. Surveys by the Society for Human Resource Management found that 40% of employers were pulling credit reports as part of the screening process in 2010 (up from 35% in 2003).
Find out how to avoid “disparate impact” lawsuits and claim affirmative defense under Title VII in Employment Background Check Guidelines.
The bottom line: Credit background checks fill the employer’s psychological need to “do something” when hiring a person who will be responsible for handling money. But credit checks offer no guarantee of sorting out the “bad eggs” in hiring.
If you use credit background checks in your hiring process, make sure you can point to a clear business necessity.
Also, focus on other nondiscriminatory approaches that can vet candidates and prevent theft more effectively than credit background checks.
Employment Background Check Guidelines: #9
Refusing to hire former criminals: Is it race discrimination?
Stay away from across-the-board bans on hiring anyone with a criminal record. Consider each case individually.
The EEOC’s Compliance Manual on Race and Color Discrimination says employers must “be able to justify [banning hiring based on a conviction] as job-related and consistent with business necessity. This means that, with respect to conviction records, the employer must show that it considered the following three factors:
“1. The nature and gravity of the offense;
“2. The time that has passed since the conviction and/or completion of the sentence; and
“3. The nature of the job held or sought.
“A blanket exclusion of people convicted of any crime thus would not be job-related and consistent with business necessity.”
So, when faced with an applicant with a criminal record, evaluate the position for the risk that potential employees would pose. For example, jobs that allow access to customers’ homes may justify cleaner criminal records than jobs with limited public contact.
Also, take into account the nature of the offense and how it relates to the position. Barring applicants with traffic violations for a fast-food job is excessive, while barring applicants with violent convictions may be justified.