In today’s market, running background checks on potential employees is considered a common and intelligent best practice. However, the process can be difficult to undertake and often requires companies to navigate regulations that can differ dramatically from state to state.
Though certain laws might differ across the nation, every background check is required to comply with the FCRA (Fair Credit Reporting Act). This federal legislation was designed to promote fairness and accuracy, and to ensure privacy for data used by consumer reporting agencies.
The FCRA directs employers to heed privacy laws and provide specific documentation to justify an applicant’s rejection after a background screening.
To be considered FCRA compliant, an employer must maintain a consistent background screening process that does not infringe upon any individual rights. This process can be broken down into five steps that are seemingly simple, but can involve a large amount of legal jargon and paperwork.
First, a company must ensure that it runs a screening for employment purposes only. If a background check is run for any personal reasons, this is considered a violation of privacy and the company can be subject to legal action from the candidate.
Second, a company must disclose that they are running a background check before beginning the check. It is illegal for a background check to be run on a candidate without his or her knowledge.
The second step may be absorbed into the third if the company obtains written consent from the potential employee before running the background check. A signed form will help cover your bases and help protect the company from lawsuits.
Next, should the company use an outside source for a background check, the business must submit a signed statement that the check is being run for employment purposes only and is not in violation of any state or federal regulations. Additionally, this statement should include an assurance that the company will follow the correct adverse action procedures should they decide not to hire a candidate based on the results of a background check.
Finally, should the company decide not to hire an applicant due to the background screening, the business should follow the legal adverse action procedure. The applicant must be informed that he or she will tentatively not be hired due to the results of the background check.
This communication, written, verbal, or electronic, should include the name and contact information of the background screening company that conducted the check. It should also notify the candidate that the third party shares no fault in the decision making process and cannot reveal why the applicant was not hired. The candidate will then have the right to dispute the report within 60 days.
Should the business receive no response from the candidate or screening agency within five days, the company can proceed with the final employment decision. A final notice should be sent to the applicant to alert them of the final decision.
Screening potential employees can become even more complicated if a company decides to conduct the background screening in house. This is why it is best to trust an experienced and reputable agency for any background checking services to ensure that all paperwork is addressed and that all parties are protected during the process.