The Fundamentals of Pre-Employment Background Screening

In general, there are three primary purposes of pre-employment background screening: hiring the most qualified applicant for the position, ensuring workplace safety, and preventing negligent hiring lawsuits. Whether your business is new to pre-employment screening or simply looking to ensure your program’s compliance and thoroughness, the following are key fundamentals for success.

Understand that pre-employment background screening is heavily regulated; educate yourself and those involved in your hiring decisions accordingly.

Even though you may work with a 3rd party provider for screening services, it’s important to understand that you are responsible for compliance with federal, state and local laws and specifically with the Fair Credit Reporting Act (FCRA). While a 3rd party provider is responsible for providing accurate reporting information, your company is responsible for maintaining compliance with how that information is used in hiring decisions. Your company is also responsible for the way the information is communicated to applicants.

Establish a policy and procedure for how your company will use pre-employment background screening results to make hiring decisions.

The EEOC provides explicit guidelines for employers using background screening results in hiring decisions. For more in-depth information on establishing policies and procedures for your business, see our post on 5 Steps for Ensuring Compliance in Adverse Action Decisions.

Properly disclose to your applicants that you conduct pre-employment background searches and obtain their written consent.

You must provide applicants with a clear and conspicuous disclosure as notification that you may request a consumer report for employment purposes. You must also obtain their written consent/authorization prior to beginning any background screening. The FCRA has strict guidelines relative to the disclosure to and consent of applicants which can be found in more detail in this article from the Federal Trade Commission (FTC) website.

Avoid a one-size-fits-all pre-employment background screening program.

Each position in your company is unique and requires different types of background searches. Review your job descriptions and determine what background searches are relevant to success in the position. The EEOC requires you to apply those background search standards to everyone being considered for the position regardless of their race, national origin, color, sex, religion, disability, genetic information (including family medical history) or age (40 or older).

There are dozens of different types of background searches spanning common categories like:

• Bankruptcy, Civil & Credit Reports – typical searches are a review of bankruptcy filings, federal and county civil litigation including lien and judgement filings and credit reviews. These searches are typically used for hiring in the financial services industry as well as other positions that require fiscal responsibility.
• Criminal Records – these searches provide information on any criminal history (misdemeanors, felonies, etc.). Please note that the most complete and accurate review of criminal records includes accessing information directly from the courts on both a county and state level and cross-referencing it with information from the Federal District Court repository.
• Drug & Alcohol Testing – these tests are used for a variety of positions and are required by the Department of Transportation in hiring individuals for safety-sensitive positions.
• Motor Vehicle Records – these searches review the status of Commercial Driver’s License from all 50 states, insurance lapses, license suspensions, revocations, accidents and traffic violations. They are most often used for hiring in the transportation industry.
• Verification Services – these services confirm levels of education, past employment and professional licensing on telephone interviews with applicant-provided references.
• Prohibited Parties Searches – these searches help identify individuals who are forbidden to work in the U.S. or are subject to certain sanctions relative to employment (known terrorists, narcotics traffickers, sex offenders, designated nationals, healthcare-sanctioned individuals, among others).

When selecting a provider to conduct your background screening, look for a qualified partner that will review your applicants as thoroughly as possible.

For example, some screening providers only provide a criminal record check using national criminal databases. These databases are often outdated and lack complete information, and they usually do not include every jurisdiction. At Rexus, we partner directly with state repositories and utilize researchers at the municipal level in order to provide the most comprehensive criminal record reporting available.

Follow proper adverse action procedures.

When your business chooses to discontinue a hiring or promotion process due to information found in a background screening, it becomes an adverse action. The FCRA requires strict compliance with their guidelines for taking an adverse action . Non-compliance can result in fines as well as become the basis for a class-action lawsuit. For more information on compliance in adverse action procedures, see 5 Steps for Ensuring Compliance in Adverse Action Decisions and How to Communicate Employment Adverse Actions.