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Thursday, June 22, 2017

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’Small’ background screening errors can become big problems

’Small’ background screening errors can become big problems

Background screening mistakes can cost applicants job opportunities and disrupt livelihoods. What's more, even seemingly small screening errors may lead to costly class actions against the employers themselves. Reviewing background check practices is always a good idea for businesses seeking to these avoid pricey pitfalls.

Do the 'Rights' thing

To begin, make sure to supply your applicants with the most up-to-date version of the federal document titled, "A Summary of Your Rights Under the Fair Credit Reporting Act." Although a revised edition of this notice was released on January 1, 2013, many employers unintentionally continue to use the old version.

New copies of the notice reference the Consumer Financial Protection Bureau, as opposed to an older version which cites the Federal Trade Commission. In 2013, Kmart settled for $3 million as part of a lawsuit claiming the retailer sent an outdated Summary of Rights form to job candidates.

Remove the release

Employers should also consider removing a release of liability from their background screening form. Including release language in a Disclosure and Authorization document may be deemed in violation of an FRCA requirement stating that a background check disclosure must "stand alone" from the liability release.  

Taking action

Any adverse action based upon a third-party background screening report requires organizations to provide affected applicants with both a pre- and post-adverse action letter. This notification allows candidates to identify errors in their background checks before an employer rejects them based on information from the screening.

However, some companies forget this step, an error which has led to more than $2 million in settlements over the last several years, based partially upon allegations that employers failed to follow correct adverse action procedures.

Risks of blanket policies

Companies may simply enact a blanket policy that excludes anyone convicted of a crime from employment. The risks of such a strategy have increased in recent years, to the point where the Equal Employment Opportunity Commission (EEOC) has suggested that employers undertake a deep-dive analysis on an ex-convict or felon before refusing them for work.

Part of the impetus for EEOC's stance is how broad criminal history policies have a particularly negative impact on minorities.  Pepsi Beverages paid $3 million in a 2012 suit alleging its background check policy excluded applicants who had been arrested but never convicted of an offense. According to the EEOC, Pepsi's policy had a disparate impact on African-American applicants by disproportionately excluding them from employment.

This case, along with other examples of supposedly small background check mistakes, demonstrates the need for companies to continually update their screening processes.

OPENonline is a trusted source for comprehensive background screenings. For more information, visit our website

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