Employee Background Check Compliance

How to stay compliant with federal, state, and industry-specific regulation on criminal history screenings

It is well known that employee background checks are regularly used by businesses and organizations to make better informed hiring decisions. If you are a business manager, then you understand the consequences of bringing the wrong person onto your team, which is why it is critical to find out everything you can about a potential hire before making the call.

Background checks are an irreplaceable hiring tool for employers – however, there are certain laws in place that protect the privacy of the individual in question. Failure to comply with these regulations can result in steep fines or legal action. Unfortunately, these constantly changing laws are making it increasingly difficult for businesses to stay compliant.

Here are the primary guidelines your business or organization must carefully follow when conducting a background check:

The Fair Credit Reporting Act (FCRA)

As an employer, if you rely on a third-party to run criminal background screenings on potential job candidates or existing employees, there are several standards you adhere to. One of these standards is the federal Fair Credit Reporting Act (FCRA) , which was enacted to protect the rights of individuals by seeking fairness, accuracy, and privacy of information obtained by Consumer Reporting Agencies (CRA).

Here is a basic breakdown of achieving FCRA compliance in 5 steps:

•  Permissible Purpose. Ensures that you are conducting a background screening for employment purposes only. “Employment” can include a broad category of actions, including hiring, retention, promotion, transfers, and outside contractors. ( Section 604 )

•  Disclosure. Stipulates that you must inform the applicant, in a written document, that you intend to run a background check as a condition of employment. ( Section 604(a)(2) )

•  Authorization. Before ordering a background check, you must obtain written consent from the individual. ( Section 609 )

•  Adverse Action. If information you obtain during a background screening causes you to make a negative employment decision, you must take the proper actions to notify the applicant. This includes providing a written, oral, or electronic pre-adverse notice, followed by a final adverse decision if the employee does not dispute the report. ( Section 603 )

•  Certifications. You must confirm to the screening firm that you will not violate any federal or state equal opportunity laws and that you will fulfill the compliance steps listed above. ( Section 604(f) )

Employers who fail to comply with FCRA guidelines can face legal repercussions.

State Law Compliance

In addition to federal pre-employment screening guidelines, employers must also be sure they are abiding by their local and state-specific laws on background checks. Each state has their own specific set of guidelines, including how often a criminal history screening may be conducted and to what extent. Furthermore, these regulations are subject to frequent change, making it harder to stay compliant.

Industry-Specific Compliance

In some cases, legal compliance also requires employers in certain industries to take extra steps when conducting background screenings. For instance, in Georgia, lawmakers recently passed a law requiring additional screening for childcare workers hired on or after January 1, 2014. The law also mandates that background screenings be updated every five years.

Additionally, financial institutions, healthcare organizations, and businesses selling firearms all face a maze of both state and federal screening regulations, with steep fines if they fail to stay up-to-date.

An End-to-End Background Check Solution

As you can see, staying compliant with constantly changing federal, state, and industry-specific pre-employment screening guidelines is easier said than done. Properly managing a secure, efficient, and accurate background check platform that keeps you in compliance is critical for making sure you don't end up in court facing a heavy lawsuit or fines.

The InnovativeBCS suite modernizes and maintains compliance with the myriad of laws and rules by using a hosted, secure product solution to investigate and monitor the criminal history of job applicants and current employees.

Not only does Innovative BCS help you meet the challenges of compliancy, but our background screening solution also organizes, monitors, and tracks all of your applicants during the validation process and throughout their employment period – helping you to make wise hiring and employee advancement decisions.

Get started using the InnovativeBCS suite by submitting the details of your organization today.