What You Need To Know About Background Checks and Compliance

Michael Gaul

Regulation. Legislation. Litigation. These three issues trigger a range of corporate "compliance activities" and also form a resounding triple threat to the employment practices of companies of all sizes. They also serve to remind us that a one-size-fits-all mindset is not only often against the law; it’s more often contrary to the best interests of employees and organizations alike.

Regulation: Stay Informed of Compliance Requirements

Title VII of the Civil Rights of Act of 1964 prohibits discriminating against an employee or an applicant based on race, color, religion, gender, or national origin. Since the initiation of this important piece of legislation the Equal Employment Opportunity Commission has added numerous initiatives, as the need arises, in order to keep pace with discriminatory issues in the workplace. The guidance focused on criminal background checks and the disparate impact on protected classes.

The second key regulatory group, the Federal Trade Commission, administers the Fair Credit Reporting Act. Like its equal employment counterpart, the FCRA has stayed current with numerous actions aimed at creating an equitable hiring and employment environment, including the use of social media screening. Actions by the FTC highlight the need for cooperation by employers and Consumer Reporting Agencies (CRAs) in order to remain compliant with the current regulations in background screening.

Legislation: The Momentum of "Ban the Box" and New Laws Regarding Background Screening

As background screening has become a modern convention in the hiring process of corporate America, it has attracted the attention of greater legislation. Laws regarding the use of credit reports, criminal records, and social media information for employment have been enacted by both federal and state governments. Of note is a recent amendment to the FCRA introduced by Congress which could limit the use of credit reports for prospective and current employees.

Also gaining momentum is the "ban the box" movement, which prevents some employers from asking questions about a job a candidate’s criminal history on the written portion of the application process. Currently seven states and 42 local jurisdictions have enacted ban the box legislation, with 11 cities and counties extending the policy beyond local government to private contractors. We expect this trend to continue and possibly have serious implications for employers who fail to comply.

Litigation: Follow the Letter of the Law in Employment

Employers not enacting a best practices policy regarding background screening may find themselves in legal hot water. The recently updated EEOC guidelines have brought employment practices to the forefront and made this a hot button issue ripe for EEOC lawsuits, private litigation, and class action lawsuits. Hiring and retention practices that are remiss in following current law and updated guidance have been targeted and are making headlines. No corporation wants the negative publicity or the fiscal implications of a lawsuit.

When it comes to managing an employment screening program in light of these triple threats, employers are advised to work with their background screening provider and employment attorney to ensure their screening programs protect the interests of the employer, who needs to make quality hiring choices, and the rights of applicants/employees, who deserve fair consideration and treatment.