Tips for Employers Performing Pre-Employment Background Checks

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Most employers will check a potential employee’s background to try and make sure they are hiring the best person for the job. When employers run a background check, they generally realize that they need to follow the Fair Credit Reporting Act (FCRA). However, they may not always be aware that there are other federal, state, and local laws that they need to comply with. Therefore, we are going to discuss some issues concerning background checks that employers should consider before conducting them.

When Can Background Checks Be Performed on Employees?

Federal law typically does not restrict employers from performing background checks on employees or potential employees or how they use the information they obtain, except for some restrictions on federal contractors who want to perform pre-offer criminal background checks. However, some state and local laws do place restrictions on when criminal background checks can be conducted on applicants or employees. 

What Notices Do Employers Need to Provide Employees When Conducting a Background Check?

If a business is using a third-party agency to conduct the background check. Then they must follow the provisions set forth in the Fair Credit Reporting Act (FCRA). When the FCRA does apply, the employer is required to provide a disclosure to the applicant or employee about their intention to conduct a background check and receive authorization from them to do so before conducting the background check. 

There may also be additional requirements if the employer makes a negative decision regarding the applicant’s or employee’s employment based on the information contained in the background check. Before making an adverse decision, the FCRA requires that employers give the applicant a pre-adverse action notice, a copy of the background report, and an opportunity to contest the information contained in the background report. The FCRA does not limit an employer’s ability to take adverse action based on the background check. It just requires the employer to provide the applicant notice before making the decision.

The Equal Employment Opportunity Commission

There is also non-binding guidance provided by the Equal Employment Opportunity Commission concerning the way in which employers should make use of the information they obtain from a criminal background check in their hiring decisions. This guidance states that employers should not automatically eliminate applicants due to prior arrests or convictions. Instead, they suggest that employers make an individualized assessment of the specific applicant’s situation. 

Employer Takeaways

There are some important things for employers to keep in mind when running background checks, such as having a policy that treats all applicants for a position equally. It is best not to run background checks only on certain people applying for a position. Additionally, it is important to comply with all federal, state, and local laws, and the FCRA, if using a third-party background check company.

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