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Tip of the Month

Tip #4: What are the Legal Ramifications or Restrictions for Conducting Background Checks?

For each “tip of the month” this year we will focus on 12 different recommendations for creating a non-discriminatory employment background screening program.

When an employer decides to hire or promote an employee they should have a non-discriminatory legally compliant background screening program in place. Not only does this help employers ensure they are hiring the right person for the position, it also limits exposure to negligent hiring claims.

For this month we will focus on the question, “what are the legal ramifications or restrictions for conducting background checks?”

All employment background screening reports must comply with Federal Law (FCRA) and state law where applicable. The Fair Credit Reporting Act states that only certain information can be contained on an employment screening report. For example, bankruptcies that are older than 10 years are not reportable on an employment credit report. Criminal convictions that have been disposed (meaning a verdict was given in the case) that are older than 7 years are not reportable on an employment background screening report.

  • Only records that have resulted in a conviction or "no contest" plea are reportable
  • Records are reportable up to 7 years from the disposition date (When the case was disposed)
  • Bankruptcies and Collection accounts are reportable up to 10 years
  • If a criminal case resulted in a prison sentence then the 7 year period will start from the date the applicant was released from prison
  • Criminal Records are indexed by a name and date of birth match

Employers Choice Online Tip of the Month is provided as a free service to clients, friends and subscribers of Employers Choice Online, a division of Diversified Risk Management, Inc. The intent is to provide information of value to attorneys, human resource, security, and risk management professionals. The information contained in this e-mail alert is intended to provide useful information on the topics covered, but should not be construed as legal advice or a legal opinion. Your comments are appreciated. E-mail corporate

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Facts

Workplace Violence One out of every six crimes occurs in the workplace and homicide is the second leading cause of workplace death in the U.S.

Education Falsification National Credit Verification Service reports that 25% of the MBA degrees it verifies on resumes are false.

Statistics

72% of shrinkage is due to employee theft.

34% of all job applications contain lies.

30% of small business failure is caused by employee theft.

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