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Rules of the Road - Background Checks

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For most companies, a background check comprised of a criminal search for a felony and misdemeanor report and a Social Security trace is sufficient in verifying the identity and validity of a candidate. But beyond these basics are other rules of the road that employers should be aware of. They must avoid crossing privacy lines with potential employees and take steps to avoid liability that could potentially harm their business. "Given the current atmosphere within the background screening industry, we have to protect the interests of our employer clients,” says Kym Kurey, Compliance Manager at A-Check America. “This means that employers must follow the Federal and state guidelines in place to ensure the most accurate and successful employment decision possible.”

Here are some of the basics employers should be aware of when they conduct background checks:

Make Sure All Inquiries are Related to the Position
A background request should deliver information which is pertinent to the position. In general, background screening must be conducted on the same basis for all applicants seeking a specific position or a type of position. In other words, all applicants for a particular position must be subject to the same screening. For example, if you are hiring a driver who will be responsible for delivering large amounts of cash, you can reasonably check for past criminal convictions. If you are hiring someone for a data entry position, however, a criminal background check is probably unnecessary. The law is looking for consistent practice and not a hit-and-miss type of program.

According to EEOC guidelines, employers can't automatically disqualify someone because of a past criminal record. You can take it into consideration, but you have to have a legitimate business reason for not hiring someone with a conviction. Before employers conduct a background check, you are on the safest legal ground when you ask for written consent. You may legally decide not to hire the worker if they refuse to consent to a reasonable request for information.

Dispute Resolution
When an applicant disputes information on a background report, employers must follow specific Federal Guidelines. The applicant is provided a toll free number to call the background screening company which provided the report. The background screening company has 30 days from the filing of the dispute to investigate and get back with the applicant to report their findings.  If a change on the report is required then the background screening company must also notify the hiring company which requested the report.  All this must be done per FCRA guidelines free of charge to the employer and applicant. More information on these guidelines can be found here.

Adverse Action Procedures
Per Federal regulations, adverse action procedures must be followed when an applicant is not hirable due to findings on the background report. Currently, if a consumer report influences an employer's decision to take an adverse employment action, before taking any action the employer must provide the applicant/employee with a copy of the report and a written summary of consumer rights as prescribed by the FCRA. Once the employer takes the adverse action, it must provide certain information to the individual. This notice may be provided orally, in a written form, or electronically and must include the following information:

  • The name, address and phone number of the agency that provided the report
  • A statement that the reporting agency did not make the decision to take the adverse employment action and is unable to provide the specific reasons for the decision
  • A statement of the applicant or employee's right to obtain a free copy of the consumer report from the consumer reporting agency by making a request within 60 days
  • Notice of the applicant's right to dispute the contents of the credit report

Differences Between Arrests and Convictions
Under the federal Fair Credit Reporting Act (FCRA) an employer is allowed to see records of arrest. A past arrest where the person was found not guilty is not reportable, though employers want to know this information.  For their protection this information is filtered out of the report as required by state laws. Reporting is regulated by both Federal and State guidelines. Federal is up to seven years, and state regulations are a lot more restrictive in certain states. In certain states that include Colorado, Texas and California, convictions cannot be reported after seven years. As a general rule of thumb, under state law you should not make a hiring decision based on records of arrest.

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