Employee Management

Background check guidelines

What you need to know about conducting background checks, from start to finish.

By HR360

As part of the hiring process, employers sometimes want to consider the backgrounds of individual applicants — for example, a person's work history, education or criminal record. While additional facts may help an employer make a more informed decision, it is essential that employers comply with federal, state and local laws governing access to, and use of, background information.

Before you begin

While federal law generally does not prohibit employers from asking questions about an applicant's background or requiring a background check, many state and local laws prohibit or limit an employer's use of salary history, consumer credit reports, criminal records and certain other components of a background check.

Certain states and localities also prohibit discrimination based on credit or criminal history information. Therefore, it is prudent to consult with a knowledgeable employment attorney prior to conducting any background check to be sure your company's actions comply with the law.

Employers that get reports from companies that are in the business of compiling background information must comply with the federal Fair Credit Reporting Act (FCRA). Among other things, the FCRA requires these employers to:

  • Notify all job applicants that background information may be used to make employment decisions; and
  • Obtain an applicant's written authorization prior to getting a background report.

Obtaining written permission before conducting a background check may also be required under state or local laws.

Using background information

Regardless of where background information is obtained, it is illegal for employers that are subject to federal nondiscrimination laws to discriminate against employees and applicants based on race, color, national origin, sex, religion, age (40 or older), disability or genetic information when requesting or using background information for employment purposes. States and localities may have similar nondiscrimination laws that apply to smaller employers or include additional protected groups. 

Keep the following do's and don'ts in mind when using background information:

  • DO treat everyone equally. The decision to check an applicant's background — and any employment action taken as a result of the information revealed — should not be based on the person's race, national origin, color, sex, religion, disability, genetic information, age or other protected characteristic.

  • DON'T seek out information that is not relevant to the position. As a general rule, information obtained and requested during the pre-employment process should be limited to that which is essential for determining whether a person is qualified for the job. Also, keep in mind that a growing number of states and localities prohibit employers from asking candidates about their salary history.

  • DON'T use a policy or practice that excludes people with certain background issues if it significantly disadvantages individuals of a particular race, national origin, or other protected group. Unless the policy or practice is "job related and consistent with business necessity," it may be in violation of the law.

  • DO be prepared to make exceptions for problems revealed during a background check that were caused by a disability. The federal Americans with Disabilities Act and many state disability discrimination laws require employers to provide reasonable accommodation to a job applicant with a disability, unless doing so would cause significant financial or operational difficulty for the employer.

  • DO maintain applicant records in accordance with the law. Under laws enforced by the U.S. Equal Employment Opportunity Commission, any personnel or employment records an employer makes or keeps (including all application forms, regardless of whether the applicant was hired, and other records related to hiring) generally must be preserved for one year after the records were made, or after a personnel action was taken, whichever comes later.

  • DO keep background check information confidential. Information pertaining to an applicant's background may be sensitive or private and should be kept confidential. Keep in mind that some states now require employers to protect certain types of personal information that they keep about their employees.

  • DO provide required notices in the event of a negative hiring decision. The FCRA requires employers to provide certain notices to an applicant who is not hired because of information obtained from a company in the business of compiling background reports.

Background checks can be an effective means of helping employers determine which applicants are most qualified for a particular job. At the same time, employers must proceed with caution and ensure that their policies and practices related to the use of the information they obtain do not violate federal, state and local laws. Due to the complexities of the law in this area and the sensitive nature of personal information, it is important to consult with an employment attorney before conducting any background check.

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The content herein is provided for general information purposes only, and does not constitute legal, tax, or other advice or opinions on any matters. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy.

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