The Importance and Challenges of Background Checks for the Real Estate Industry

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The Importance and Challenges of Background Checks for the Real Estate Industry

The real estate industry is an integral part of communities. The workers in this industry help many people, assisting with personal and financial information as part of their everyday responsibilities. Managing such information makes it crucial for employers in this industry to know that their employees are trustworthy. Therefore, background checks are an essential part of their hiring process.

Background checks have been a necessary part of the hiring process for a long time, and the Fair Credit Reporting Act (FCRA) has regulated these screenings since 1971. The Act regulates how employers can obtain consumer reports and what they must do when using them. 

For example, employers must request and receive authorization from the individual before acquiring the report. When ordering a background check report, they must also supply a stand-alone disclosure form to the applicants or employees. Employers who fail to follow the FCRA requirements risk fines and other penalties.

Due to labor shortages and changes in the laws, many real estate employers have adjusted their hiring processes. Many states and local areas encourage employers to screen out fewer candidates. In contrast, one state recently passed a law requiring more stringent background screening for certain positions in the real estate industry. Because of these varying laws, all employers performing background checks must be vigilant about what laws regulate the screenings. Here are several recent developments in regulations affecting background checks.

Drug Screening for Marijuana 

Many states have legalized the use of cannabis for recreational purposes. Since the legalization, some state laws now regulate drug testing for marijuana use. Real estate employers must consider these laws when hiring and any liability concerns for employees in safety-sensitive positions. However, there are exceptions to these laws for safety-sensitive jobs. The United States House of Representatives has also passed the Marijuana Opportunity Reinvestment and Expungement Act. This Act would take cannabis off the federal schedules of controlled substances and decriminalize the use of cannabis on a federal level. Finally, the United States Senate has drafted legislation intended to decriminalize marijuana. This Act is called the Cannabis Administration and Opportunity Act. Employers should keep an eye on the progress of these laws.

Ban the Box Laws

Ban the box laws, also known as Fair Chance Acts, typically restrict an employer’s access to applicants’ criminal history until after offering conditional employment. These laws encourage employers to look at an applicant’s qualifications for the job before seeing their criminal history. These laws can vary considerably between states and within local areas in a state. As a result, real estate employers must check the laws local to where they are hiring, ensuring compliance and protecting themselves against negligent hiring and retention claims.

Equal Employment Opportunity Commission

Employers must also comply with Equal Employment Opportunity Commission (EEOC) laws. For example, employers must ensure their hiring policies do not disproportionately or negatively affect any protected class. In addition, the EEOC provides employers guidance when conducting background checks or using the information in the screening reports. This guidance recommends always running a personalized assessment when basing any hiring decision on an applicant’s criminal history, which is necessary for some areas.

Final Thoughts

Given the fast-paced nature of the real estate industry, keeping abreast of the ever-changing legal landscape of background checks can be challenging. However, to protect your business, employees, and clients, it is crucial to perform this due diligence.

This difficulty is why partnering with a background check furnisher you trust is crucial. Ensure you find a company that stays up-to-date with all current laws and regulations. The right background check company will help you comply with the ever-changing rules, ensure you hire quality employees and guarantee your hires are assets to the business.

Easily verify your employment qualifications when you switch to pre-employment background checks. Talk to a sales representative today.