Before You Run an Employee Background Check You Need to Know These 6 Things

Staying compliant is harder than ever for human resources professionals. As laws and guidelines continue to change, here are six things to keep an eye on in 2018.

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BY Julie Loffredi - 20 Jan 2018

Before You Run an Employee Background Check You Need to Know These 6 Things

PHOTO CREDIT: Getty Images

It sounds simple. Run a background check on a job applicant. But, the practice is getting more complicated than ever. Employers and background screening companies must continue to stay up-to-speed on the latest laws and new guidelines in order to stay compliant.

As employers continue to place an emphasis on public and workplace safety, loss mitigation and fraud, background screening remains a top priority for employers and their background screening partners alike. However, there are a number of issues to key an eye in order to be fair and compliant.

With some help from the National Association of Professional Background Services (NAPBS) Board Chair Scott Hall, here's a list of what employers should be doing in 2018:

1. Stay FCRA compliant.

If you ever plan to run a background check, you must follow The Fair Credit Reporting Act (FCRA) in order to stay compliant. For example, an applicant must:

  • Give your consent for background reports to be provided to employers.
  • Be told if the information in his or her file or background report has been used against them (this is called Adverse Action).
  • Have the right to know what is in his or her report.
  • Have the right to dispute incomplete or inaccurate information found in a background check.

This is complicated stuff. Employers should seek legal counsel when crafting their own background check policy to be compliant and use a Consumer Reporting Agencies (CRA) that is up-to-speed on the law.

2. Use a Reputable CRA.

It may be tempting to run a background check on one of these cheap websites, but it may violate the FCRA. Employers generally use a Consumer Reporting Agency (CRA) to run legal checks. These agencies can also often integrate with software used by human resources professionals.

Employers should craft an RFP (Request For Proposals) and send to potential vendors before hiring a CRA. The Background Verification Request for Proposal Guide is a good place to start.

3. Consumers will become more proactive.

With background screening now a common part of the onboarding process by most employers, it has become increasingly important for consumers to take an active role in the process.

Consumers should feel empowered to ask questions, review the disclosure form provided before authorizing their prospective employer to conduct a background check, seek clarification, review the results of their background screening report and provide appropriate information upon request so the process can be completed in a timely manner and they can be placed for work.

Employers can expect consumers to be more aware of the law and take a more active roll in the process.

4. "Ban the Box" legislation will evolve.

As important steps are taken to re-integrate those with a criminal history back into society, "Ban the Box" legislation is likely to get thoughtful consideration by both state legislatures and even local municipalities.

With the massive introduction of "Ban the Box" policies over the last several years, researchers are just now beginning to evaluate whether the legislation is helping to serve its intended purpose or whether greater racial discrimination is occurring post "Ban the Box" legislation. The issue needs and will surely get more study and those efforts should be supported.

Employers and CRAs need to keep policies up-to-date and regularly check on revisions to "Ban the Box" laws.

5. More companies to perform background screenings.

In a 2017 survey conducted for National Association of Professional Background Services by HR.com, nearly all the employers surveyed--96 percent stated their organization conducts one or more types of employment background screening. Public safety was overwhelmingly cited as the top reason employers conduct background checks. Employers that are currently not requiring background checks for applicants, should consider it.

6. Litigation is on the rise.

Litigation continues to be on the rise in the background screening industry, because the Fair Credit Reporting Act, unlike other consumer protection statutes, does not provide a cap on statutory damages in class actions. This makes the industry a target for class action litigation, most often in cases where the consumer has suffered no demonstrable harm.

When all parties take their compliance responsibilities seriously an engaged applicant can quickly become a productive employee. If you want to start offering background checks to applicants but not sure where to begin, seek legal advice.

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