Career Advice - A Community Blog

Erik Larson writes about the job market, resume improvement, and career advice

Background Checks: What Employers Need to Know

Written by Erik Larson, Community Blogger | Jan 29, 2018 9:49 PM

Depending on the type of business you run, it can be a good idea to perform background checks on your employees or anyone applying to work for your company. Background checks can be a great way to ensure the safety of your workplace, employees and customers, while also helping to lower the risk of employee theft. However, you could easily find yourself facing serious legal trouble if you don't do things correctly and follow all rules and regulations concerning employee background checks. For this reason, we'll now look at some of the most important things all employers need to know before asking their employees or applicants to submit to such a background check.

It Is an Employer's Legal Right to Require a Background Check

Under US law, employers have the legal right to ask their current employees or applicants to submit to various background checks. No specific laws exist preventing employers from asking about criminal history and employers also can legally ask questions about a person's background to find out more about their work history, education, etc.. Furthermore, employers can require a background check to look into the person's financial history or criminal record as well. The law also allows employers to use the information gained in the background check to make various personnel decisions, such as hiring, firing, promotions, demotions and reassignment.

You Must Notify Employees and Applicants About Background Checks and Get Their Permission

If you are using a third-party company to carry out the background check on your behalf, you face additional legal requirements as specified in the Fair Credit Reporting Act (FCRA). In this case, you are legally required to get the person's written permission prior to performing the check. In addition, you must also notify the employee in writing that the information from the background check can be used to make personnel decisions. This notification must be given in the form of a standalone document, which means that it cannot be included within the general employment application.

When submitting a request to the third-party company to perform the check, employers are also required to certify that they notified the person of the check and received their permission. The company must also certify that it followed all applicable rules under the FCRA and that they won't use the information obtained in the background check to discriminate against the person or in any other way prohibited by federal and state law.

Employers Must Treat All Employees and Applicants Equally

Although employers technically have the legal right to perform background checks, numerous companies have gotten in trouble in recent years for doing just that. The Equal Employment Opportunity Commission (EEOC) was formed to help prevent employees from being discriminated against. Most of these laws are based on Title IV of the 1964 Civil Rights Act, which prevents individuals from being discriminated against based on race, religion, ethnicity, national origin or sex. Nonetheless, the EEOC enforces numerous laws in an effort to prevent this type of discrimination.

This means that as an employer, you must ensure that you treat everyone equally and never use background checks to discriminate against any specific groups. The problem is that background checks can easily be used to discriminate against ethnic and racial minorities, and many companies have been fined after it was determined that their background check practices had a disparate impact on certain groups. This is true even in cases where the employers did not intentionally discriminate against a particular group, but it was still found that the background checks negatively impacted one group more than others.

This is why attorney Howard Ankin specifically states that all companies should keep detailed records about all criminal background checks and also records justifying the specific reasons for reviewing the person's background and also for acting on any information obtained during the course of the background check. Keeping detailed records such as these will generally make it easier for you to prove that your practices were not discriminatory, as you will be able to document the specific reasons for any actions you took based on the check.

The fact that some companies have faced huge fines due to their background check practices has led to a huge decrease in the number of companies performing these checks. Nonetheless, the fact is that background checks are still the most effective means of finding out important information about your employees and applicants. In this sense, it is essential that you follow all applicable regulations in order to protect your company from any potential issues that could arise.

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