Employee Rights Under the FCRA
In today’s competitive job market, employers may have to shuffle through stacks of resumes and applications to hire for one position. Paring down the applicant pool is the first step in the hiring process. Many employers have found that performing initial background checks helps eliminate “high-risk” applicants (for instance, those who have an extensive criminal history).
While employers have valid reasons for obtaining credit reports and other background checks, consumer advocates believe that improper handling of this sensitive information can lead to breaches in employee rights and civil liberties. Additionally, misuse of background-checking can lead to illegal and discriminatory hiring practices. The FCRA is one of many laws used to protect employees against such injustices, and to help employers avoid potential lawsuits.
What are Credit Reporting Agencies (CRAs)?
When performing background checks, employers may be looking for specific or general information about job candidates. Credit reporting agencies (CRAs) can conduct a consumer credit check, and other agencies can produce additional reports including information about medical records and payments, residential history, employment history, insurance claims, or criminal background checks.
What are the Benefits of Background Checks?
1. Build a team you can be proud of. Every employer knows that a high employee turnover rate can slow down profits and decrease morale for existing employees. Making the wrong hiring decision can create logistical, personal, and legal problems.
2. Create a safe workspace. Companies also have a “duty of care” to protect workers from employees that may pose a security risk. Investing time and resources by running criminal checks on all employees will help you find the most compatible and qualified candidates, while also preventing negligent hiring and other employment litigation.
3. Take extra precautions. Legal background checks help minimize the potential for risks, including theft or injury.
Employers should consider background screening as a way to verify facts. In a competitive job market, it is not uncommon for employees to cover up a previous dismissal, deny a criminal record, or even generate fake credentials. Understanding FCRA will help you perform a comprehensive background search while adhering to the law.
GoodHire recommends all employers to consult with legal counsel to develop a legally compliant adverse action policy.