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Due to the sensitive personal information involved, pre-employment background screening is a tightly regulated process. Below you’ll find common questions about the legal landscape.
What laws are relevant to pre-employment background screening?
The Bureau of Consumer Protection, a Federal agency, has compiled an excellent summary of compliance standards for pre-employment background screening here
There is a broad regulatory framework covering pre-employment background checks, including:
The Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act (FCRA) regulates how employers perform employment background checks on job applicants. It protects individuals by ensuring the accuracy, fairness, and privacy of information gathered by the consumer reporting agency (CRA). Beyond credit checks, the FCRA covers any background report, such as driving records and criminal records obtained from a CRA like GoodHire. Read the full text of the Act here.
Fair and Accurate Credit Transactions Act
This act helps prevent identity theft and improves the resolution of consumer disputes, accuracy of consumer records, and use of and access to credit information.
Americans with Disabilities Act
The statute prohibits employers from discriminating against individuals with disabilities who are qualified to perform essential job duties.
Civil Rights Act of 1964
Title VII of this act prohibits discrimination by covered employers (those who have fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year) on the basis of race, color, religion, sex, national origin, gender identity or transgender status. The U.S. Equal Employment Opportunity Commission is the federal agency responsible for enforcing laws against workplace discrimination, including Title VII. See the What You Should Know page on their official site for more information.
In addition some states have unique background check laws. Be sure to review your state background check laws to ensure are in full compliance with the law.
Why can’t I just Google candidates?
What you learn about a candidate from an Internet search engine may include relevant personal information, but the law dictates that background data for employment evaluation be assembled by a “consumer reporting agency” that “regularly” prepares reports for a fee to employers. A search of a person’s name through an Internet search engine does not generally meet this definition. More important, Internet search results lack credibility and are often easily manipulated and inaccurate. In addition, the FCRA stipulates that only information about a candidate from the past seven years may be considered when making a hiring decision. Google searches do not apply this filter to the information they return. Finally, a Google search can expose you to information about a candidate that you are not legally allowed to consider in making an employment decision (like disability status, gender identity and more), leaving your company vulnerable to charges of discrimination. With GoodHire, you can rest easy.
How can I ensure that I’m adhering to the law?
GoodHire exists to make pre-employment background screening easy, legal, and ethical. We offer step-by-step instructions to assist you in complying with federal law, including the relevant forms when necessary. In addition, we have federal notices for your reference, and a compliance certification for review. We cannot offer legal advice, but you can have legal counsel review your proposed screening processes to consider and ensure that you are complying with federal, state, and local law.
How do I get a copy of the FCRA compliance rules?
What is negligent hiring, and how do I protect my company from negligent-hiring liability?
Negligent hiring is a claim made by an employee against their employer, alleging that if the employer had engaged in more due diligence when screening the worker, a history of similar conduct would have been revealed which should have disqualified the worker from consideration. For your company to be held liable for negligent hiring, the plaintiff must prove that:
- An employee intentionally injured a co-worker, customer or client, AND
- Few, if any, pre-employment checks were performed, and that if they had been, those check would have likely revealed a worker’s propensity toward violent behavior, OR
- The employer, knowing a worker’s propensity toward violence, did not provide proper supervision and security. Some states have even stricter standards for employers to meet. Because the exact standards for a finding of negligent hiring vary from state to state, you should check with an employment law attorney familiar with negligence law in your state.
In short: establish policies and use thorough background screening from GoodHire to comply with all employment laws and indemnify yourself from liability!
What do I do with the background report after making a decision?
The Federal Trade Commission’s Disposal Rule mandates that when you're done using a background report, you must securely dispose of the report and any information you gathered from it to prevent unauthorized access to or use of the information. If you have paper copies, shred ‘em! GoodHire takes care of the digital copies, by deactivating reports after one year (but of course we still list them in your history). Read more
One of our GoodHire applicant reports came back with a criminal record. Can we automatically exclude an applicant because of this criminal conviction?
No. The Equal Employment Opportunity Commission prohibits blanket exclusions. Employers must evaluate each candidate’s criminal record on a case-by-case basis. If a rejected candidate has been convicted of a crime that is not job-related and correlated to a business necessity, the employer may be in violation of Title VII of the Civil Rights Act of 1964.
If the conviction meets this criterion, the employer must still follow FCRA rules that give the candidate notice in advance and provide the candidate with an opportunity to explain or contest the veracity of the information. Read more
What if I am concerned about the information found in my candidate’s background report?
Before you decide to reject a job application, reassign or terminate an employee, deny a promotion, or take any other adverse employment action (“adverse action”) based on information in a background report, you must give the applicant or employee a Pre-Adverse Action notice that includes:
- A copy of the report you relied on to make your decision
- A copy of A Summary of Your Rights Under the Fair Credit Reporting Act
This procedure allows candidates to review their reports to make sure that there is no inaccurate or incomplete information. If your organization does not already have this notice, GoodHire provides a sample to our users.
What is the Adverse Action process?
If you do decide to take adverse action based on information found in a background report, you must give the applicant or employee a notice of that fact – orally, in writing, or electronically. An adverse action notice tells people about their rights to see information being reported about them and to correct inaccurate information. The notice must include:
- The name, address, and phone number of the consumer reporting company that supplied the report;
- A statement that the company that supplied the report did not make the decision to take the unfavorable action and can't give specific reasons for it; and
- A notice of the person's right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if the person asks for it within 60 days.
GoodHire provides all of this information for users who indicate that they would like to initiate an adverse action. For your protection, we recommend that you consult with legal counsel to develop a fully legally compliant adverse action policy. Read more
Under the FCRA, what information must be excluded from background reports?
The FCRA prohibits making employment decisions based on any arrest records or adverse information older than seven years. This time limit does not apply to records of conviction or employees reasonably expected to earn $75,000 or more per year. Read more
Are the legal requirements for obtaining consent from contractors and volunteers the same as those for employees?
What should I do when I can’t verify a candidate’s social security number?
An employer hiring an individual who does not have a social security number - or whose number cannot be verified - is still required to pay social security tax for that employee, even if they are not entitled to receive social security benefits. A failure to pay this tax can result in civil or criminal penalties.
Moreover, a company that does not complete, or does not correctly complete, an I-9 Form (employment verification form with proof of citizenship) on behalf of each employee within the first three days of employment faces possible penalties of $110 to $1,100 for each violation. In addition, an employer who signs an I-9 form containing false statements may be charged with perjury.
If you require additional assistance, please speak with local counsel.