6 Things To Know When Using Background Checks
Demand for privacy and fair hiring practices prompted federal regulators to create guidelines for screening and background investigations, including the Fair Credit Reporting Act.
Recruiting trends highlighted the many organizations coming under fire in the news for improper screening practices, and forecasted increased litigation for companies failing to comply with FCRA regulations in the future.
The following are six things employers must keep in mind when performing employment background checks and other screening procedures:
1. Only Use Applicable Data
The information collected through background checks should help employers make decisions for hiring, promotion, reassignment or retention, according to the Fair Credit Reporting Act. The Equal Employment Opportunity Commission also states data discovered during employment screening should relate to an individual's ability to perform a job and fit into a company's culture.
2. Notify Applicants With Disclosure
Jobseekers must be aware of what role employment screening will play in an employer's consideration. This gives applicants a chance to withdraw from the process or protest the decision. Eater, a food industry news source, reported Whole Foods recently settled a lawsuit for $803,000 due to claims the company violated FCRA regulations pertaining to proper disclosure.
The lawsuit put forth by former job applicants suggested Whole Foods was not forthcoming about its background screening process and written authorization forms. Applicants must not only be informed of the screening process the employer will use, but must sign documents stating they understand the procedure and consent to it.
3. Use A Stand-Alone Disclosure Document
The FCRA requires disclosure forms have no extraneous information but the disclosure. The consent may be combined with the disclosure although many attorneys recommend two separate documents. They cannot be part of the application. Bussiness.com reported Home Depot got in trouble because it also included a third section about the company's liability in the screening process.
SHRM Connect reported Chuck E. Cheese got in similar trouble for failing to offer its authorization form as a singular document. This accusation cost the company $1.75 million in settlements. Regulators insist that background disclosure forms exist as stand-alone documents without additional information to prevent confusion.
4. Provide Applicants With A Copy When Necessary
Litigators also claimed the Chuck E. Cheese forms did not include a box for applicants to request a copy of their consumer report, which is required in California, Oklahoma and Minnesota. Applicants can request a copy of the report that the company completed on them for the employers as required by the FCRA.
Companies should provide an option for applicants to see what information is collected by employment screening, as well as a summary of their rights, if screening leads to an adverse action.
5. Observe Adverse Action Regulations
When an employer uses background information to take adverse action, the company must provide the individual with a before adverse action letter, a copy for the report and the Summary of Rights. After a reasonable time period, if the applicant has not disputed the report, then the final adverse action letter should be sent with the Summary of Rights. The final adverse action letter should include the contact information of the organization that performed the screening, a statement saying the screening partner did not make the decision, opportunities to request another copy of their background report and the Summary of Rights. Littler, an employment and labor law company, suggested companies may see future FCRA litigation focused on adverse action requirements.
Delhaize America, the owner of the Food Lion grocery store, had to pay $3 million in 2015 because of two lawsuits. The first raised concerns regarding the business' stand-alone disclosure form. The second took issue with pre-adverse action procedures.
6. Prioritize Accurate Information
When the lawsuit forced Food Lion to disclose its background reports to a fired employee, the documents revealed the individual was mistakenly labeled as a convicted felon, according to Law360. Employers always want accurate data to ensure they make the best decisions for their employees and the overall organization.
If employers want to ensure their data is accurate and in compliance with federal and local regulations, a professional employment screening service can provide the experience, technology and strategies necessary to collect relevant data and follow the laws of information application and communication.
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