As a human resource professional, it is a given that applicants, employees, and management will come to you with all of their questions, and expect for you to know the answers. While you may not always be able to provide them with the ideal solution to their problems, it is expected for you to at least know the labor laws surrounding their concerns. This can be done by familiarizing yourself with the 7 crucial components about employment background screening.
The background screening policy will help employers with reducing claims of discriminatory treatment brought by applicants who have not passed the employment background screening process. The policy is meant to promote a safe workplace by breaking down processes that will be used to perform the background check. An example of this would be having the applicant complete the authorization form and then providing the employer with compliant notices.
Employers are protecting their assets which includes their employees and property by conducting background checks. It would set parameters for disqualification due to an adverse background check while confirming compliance with Federal and state regulations. A policy may be required if companies want to do business with the federal government.
By having a compliant policy, organizations will effectively limit their exposure to litigation and reduce operating costs by decreasing employee turnover.
The Fair Credit Reporting Act (FCRA) was created in 1970, specifically to address issues regarding consumer credit. The FCRA’s previous purpose was to promote accuracy, confidentiality, and relevancy of information being reported on consumers. It was amended in 1996, and now its main purpose is to regulate the use of consumer report information and other background information received about applicants from consumer reporting agencies.
The FCRA is not just limited to credit reports. It also includes other information that has bearing on a consumer, including public records which include employment history, educational history, and driving history. A complete version of the Fair Credit Reporting Act may be found on the Federal Trade Commission’s website.
Section 604E, Subsection 2 of the Fair Credit Reporting Act states that employers are required to provide specific disclosures to the consumer, also known as the applicant disclosure and authorization form, before requesting an employment background report. Employers must disclose to the applicant that a background report will be procured to determine their suitability for employment.
It is essential that the disclosure clearly and accurately discloses to the consumer that a consumer report including information about the character, general reputation, and mode of living may be obtained.
The federal notice is called the FCRA Summary of Rights. This document explains the applicant’s rights under the Fair Credit Reporting Act. This must be given to each applicant nationwide.
There are additional state specific forms that employers must be aware of due to Ban the Box and Fair Chance Act laws:
This process is also known as the applicant dispute process, which states, “If an employer decides to take adverse action in whole or in part on information contained in the consumer report, the employer must take the following actions: Send the applicant a copy of the report procured along with the pre-adverse action letter, this letter states that adverse information has been reported and the subject of the report has the opportunity to dispute the information with the organization that provided the results. The applicant must also receive a copy of the FCRA “Summary of Rights” stating their rights under Federal Law. After 5 business days have past and no re-investigation is needed then the adverse action letter is sent and the applicant is no longer considered for employment with your company.”
More than half of the disclosure and authorization forms used are guilty of violating federal law. The most common violation is a waiver by the consumer of his or her rights, not allowing them specific notices, or their rights if the employer decides not to hire them based on the background check.
There are steps employers can take to recruit the highest quality applicants:
One out of every six crimes occurs in the workplace and homicide is the second leading cause of workplace death in the U.S.
National Credit Verification Service reports that 25% of the MBA degrees it verifies on resumes are false.
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.