Background Checks:
Doing them Wrong, Doing them Right
More companies than ever before are choosing to conduct background checks as part of their hiring process. The background check has become a vital tool in helping employers secure competent employees and avoid liability for wrongful hires.
But how do newcomers to the game determine how to perform a background check legally and effectively? Should you grab a trench coat, hike it up on your shoulders, and follow the job applicant around town for a day or two?
No, leave the trench coat in the closet. The better approach is to hire a respected consumer reporting agency to provide either a “consumer report” or an “investigative consumer report” (as further defined below) and carefully follow procedures and requirements set up under the Fair Credit Reporting Act (FCRA). Mistakes are possible. Here’s a few to avoid:
1.) Forget to first establish company policy.
Employers need to determine what they’re looking for and why they’re looking for it. You need to articulate the jobs for which background checks will be required and the specific types of information which will be considered legitimate grounds to disqualify an applicant for those jobs.
2.) Fail to advise the applicant about the background check process.
You must provide the applicant with notice that you will be obtaining a consumer report from a CRA (consumer reporting agency) and you might use the information in the report for decisions about his or her employment. This notice must be in writing and separate from the employment application. A consumer report is a report that bears on an applicant’s character, general reputation, lifestyle, creditworthiness, and similar matters.
3.) Misunderstand the difference between an investigative consumer report and a consumer report.
An investigative consumer provides much of the same information as a consumer report but derives it through personal interviews. If this type of report is to be obtained, you must also provide written notice to the applicant that you will be requesting an investigative report and that the applicant has a right to request written disclosure of the nature and scope of the investigation.
4.) Begin the background check process without written authorization.
You must get the applicant’s written permission to do the background check. Good practice is to include the authorization form as part of the document you use to notify the applicant that you will be obtaining the report.
5.) Fail to notify the consumer reporting agency that you have complied with all of the relevant FCRA requirements.
This certification must indicate that you notified the applicant of the background check process, received his or her authorization, and warrant that the company will not use the information received to discriminate against the applicant or otherwise misuse the information in violation of federal or state equal opportunity laws or regulations.
6.) Fail to provide required documentation to the applicant before taking adverse action.
If the decision is indeed to be thumbs down, you must provide the applicant with written notice that includes a copy of the report relied upon to make your decision and a copy of “A Summary of Your Rights under the Fair Credit Reporting Act,” before the negative action is taken.
7.) Fail to provide notice to the applicant of the negative employment decision.
Written notice of the decision is highly preferred. Information which must be part of the notice includes contact information for the consumer reporting agency, a statement that the reporting agency did not make the hiring decision, and notice that the applicant has the right to dispute the accuracy or completeness of the report
There’s much more to know about the Fair Credit Reporting Act and the impact of other laws such as those administered by the EEOC on the background check process. If you have any questions, please give us a call. We’ll ensure you sidestep the mistakes and help your company build a compliant and reliable background screening process. And we promise we’ll leave our trench coats at home.