Bankruptcies, Background Checks, and the Consequences
Depending on your specific industry, added research may be necessary for relation to the nature of the job opening you’re hiring for. Screening applicants with credit checks? Know your protections in this procedure and ease your hiring stress with these tips below.
It is unlawful for a public employer to refuse employment to an applicant due to a bankruptcy. Federal law prohibits employers from discriminating against applicants in this way. However, private employers who deem credit history a relevant job-related criteria are permitted to deny employment based on a bankruptcy filing. The federal Fair Credit Reporting Act (FCRA) prohibits background check companies from reporting bankruptcies that occurred more than 10 years prior to the date of the background check.
How To Protect Your Company with the 3 Rs:
Request: Always obtain written consent from the applicant to run their credit report. Not only does this protect your company, but also enables the applicant to decide whether or not this information is data they would like to share. An applicant with known financial challenges may opt out of this process to protect their own privacy. If an applicant refuses consent to a reasonable request for information, you have the legal right to refuse employment.
Under the Fair Credit Reporting Act, or FCRA (15 U.S.C. §1681), employers must receive an employee’s written consent before seeking that employee’s credit report. If your company decides not to hire or promote someone based on information in the credit report, you must provide a copy of the report and let the applicant know of his or her right to challenge the report under the FCRA.
Relevancy: Is your request relevant? A credit check for an applicant who is a web analyst or communications manager does not seem to be. However, if you are hiring for a financial manger, accountant, bank teller/banker, etc. then your request for a credit report is relevant to those sensitive, money-handling positions.
Reasonable: Don’t over-scrutinize. Background checks are a necessary step in the employment process, but no applicant is without fault. Ask the right questions and perform the appropriate research necessary to qualify or disqualify an applicant. Combine the best mixture of background research without going overboard.
In continuing your hiring process, understand that many applicants are trying to make improvements in their lives. A great majority of Americans are experiencing tough financial challenges. Use your best judgment of character in these situations. Protect your company with a wise use of background screening. If you have questions about what screenings are appropriate for your current needs, contact us at or 800.800.3374.
About Tammy Cohen
Tammy Cohen, an industry pioneer and expert in identity and employment screening, founded InfoMart 30 years ago. Deemed the “Queen of Screen,” she’s been a force behind industry-leading innovations. She was most recently the first-to-market with a fully compliant sanctions search, as well as a suite of identity services that modernizes talent onboarding. Tammy revolutionized the screening industry when she stepped into the field, developing the first client-facing application and a due diligence criminal search that has since become standard for all background screening companies. Cohen has received national awards and honors for her business and civic involvement, including Atlanta Business Chronicle’s Top 25 Women-Owned Firms in Atlanta, Enterprising Women Magazine’s Enterprising Women of the Year award, the YWCA of Northwest Georgia’s Kathryn Woods Racial Justice Award, and a commendation in the 152nd Congressional Record. To learn more about Tammy, visit www.tammycohen.com.
InfoMart has been revolutionizing the global background and identity screening industry for 30 years, providing businesses the information they need to make informed hiring decisions. They develop innovative technology that modernizes talent onboarding, including a first-to-market biometric identity authentication application and a verified sanctions search. The WBENC-certified company is a founding member of the Professional Background Screening Association, and they have achieved PBSA accreditation in recognition of their consistent business practices and commitment to compliance with the FCRA. The company is dedicated to customer service, speed, and accuracy, and it has been recognized for its success, workplace culture, and corporate citizenship with over 45 industry awards. To Get the Whole Story on InfoMart, please visit www.InfoMart-USA.com, follow @InfoMartUSA, or call (770) 984-2727.