by Angela Rud, Esq.
When an employer conducts a background search on an applicant entirely in-house using only the employer's staff, background-check laws generally don't apply. However, when an employer pays an outside entity to screen applicants, it must obey background-check laws, including the Fair Credit Reporting Act (FCRA) and applicable state laws.
That includes vendors that search social media sites like Facebook and Twitter for information about job candidates.
The FCRA establishes several legal requirements for obtaining a background report, including notice, consent and various procedures that must be followed before taking any adverse employment action based on a background check, such as withdrawing a job offer. Even some in-house checks may trigger FCRA obligations, such as using an out-of-state agency to pull court records.
After years of debate, the EEOC published controversial new guidance on employers' use of background-check policies and practices. Then, it used those guidelines to file a pair of important lawsuits — against BMW and Dollar General — alleging violation of federal discrimination law. Every employer needs to be in compliance.
Internal, external risks
Background checks bring legal risks, whether they are done internally or through a service.
If doing background checks internally, employers should take steps to ensure consistency in processes, and be familiar with the many different laws that apply to applicant screening, including federal and state discrimination laws, EEOC rules on background checks, data privacy laws and specific state requirements.
If using a background-check service, employers should make sure the vendor follows FCRA requirements. Many service providers claim to follow all applicable laws, but not all do.
FCRA basics
Always provide notice and obtain consent from the employee or applicant before starting a background check. Make sure the notification form complies with FCRA by making it a separate document designed solely to notify applicants that you are seeking a background check and need their consent.
Consider the best timing for conducting background checks. A conditional job offer is not required in order to obtain a screen; however, it rarely makes sense to screen every applicant.
Consider the amount of time you want the search to cover. Generally, employment background checks (other than criminal history information) should be limited to a seven-year look back. Limit your inquiry to information you are authorized to receive, and instruct service providers not to disclose information beyond this limitation.
If you reject an applicant based on background-check information, make sure he or she receives a "pre-adverse action notice." Provide an opportunity to dispute the information. At the time of rejection, send a "final adverse action" notice to the applicant containing the language required by FCRA.
Pepsi thought its background checks were in compliance. The company believed it was using background checks in a nondiscriminatory way. But the EEOC saw things differently. The result: Pepsi paid $3.2 million to settle an EEOC race-bias charge. Kmart also thought it was in compliance, but it was hit with a class-action lawsuit alleging violations of background-check laws including the federal Fair Credit Reporting Act. The result: Kmart paid a $3 million settlement. The list of well-reported companies continues to grow … will you be next?
Checks and social media
The practice of searching applicants' social media accounts for background information is drawing increasing scrutiny. Several states now prohibit employers from requesting applicants' social media passwords.
When deciding whether to check applicants' social media content for background-check purposes, consider these questions:
What information are you looking for and why? It's unlawful to consider an applicant's gender, race, national origin, sexual orientation, age, disability or religion when making hiring decisions. Social media may reveal all that information.
Is the information relevant to the hiring decision? Social media posts often contain information that warrants rejection of a candidate. But a lot of the information may be questionable in terms of making a decision. How will you fairly evaluate that information?
Is the information reliable? It is possible to discover important and truthful information about an applicant using social media checks, but it is also likely to be a very unreliable process. Traditional background checks are generally reliable because they rely on courts, schools and past employers. By contrast, social media sources may contain false, doctored and biased information.
Social media posts can easily be forged. Photographs and other information are easily manipulated and distorted with today's technology.
If seemingly negative information is revealed during a social media check, give the candidate an opportunity to offer an explanation or dispute the information. The applicant's explanation could reveal maturity and honesty, or it could show evasiveness and dishonesty.
How will this help hiring?
Periodically review your applicant screening practices to determine if your approach has improved the effectiveness of the organization's hiring process and the quality of new hires. Answers to these questions will provide perspective:
- How, if ever, should checks supplement more traditional means of vetting applicants' credentials and pre-employment screening for adverse information?
- What types of information does the organization need and how will that information be weighted?
- Will the information be gathered through in-house resources or an external service provider? If the latter, how will FCRA compliance be worked into the social-check process?
Don't wait for a lawsuit or EEOC charge to make sure you're in compliance. It's vital — for your company and your career — to get in line now with the EEOC's Enforcement Guidance on the Consideration of Arrests and Conviction Records.
Join us Monday, September 26, for Background Checks: Best Practices & Legal Compliance. You'll discover: - The legal risks of background checks (both criminal and credit).
- When, if ever, you can consider arrest records in hiring.
The elements of a valid, legally compliant background-check consent form (the subject of almost all new FCRA class-action lawsuits).- How to comply with the EEOC Guidance, so that you perform an "individualized assessment" on applicants screened out by background checks. (Understand the 9 key factors to consider!)
- The most important, practical takeaways from the EEOC Guidance and FCRA class-action lawsuits.
Best of all, your trainer for this presentation will be a true expert on this topic, attorney Scott Brutocao. You can also ask him your own questions about this issue during the Q&A portion of the webinar. Register now!
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