Federal Guidance for Background Checks

Thinking of performing a background check on a potential new hire? First determine if you really need to go through this process:

  1. Do your employees have access to sensitive information?
  2. Are they working in clients’ homes?
  3. Will the candidate have access to your accounting where fraudulent transactions can be recorded?
  4. Will the employees have access to private information such as new product development or, technology?
  5. Will the employees be working with children?

Thinking of performing a background check on a potential new hire? First determine if you really need to go through this process:

Equal Employment Opportunity Commission (EEOC) provides the following guidance:

  1. Do not discriminate by asking only certain groups/classes of employees for background information.
  2. Do not ask about medical conditions.
  3. Apply the same standards to all employees ( if you reject applicants because of certain financial histories, you must reject all applicants, regardless of race, sex, etc.)
  4. Be mindful of the unintentional discriminatory effect background checks have on certain members of a protected groups.
  5. Keep the application and other records related to hiring for at least one year. If your organization receives a charge, you must keep the records until the case is concluded.

Federal Trade Commission (FTC) guidance:

1. If you get background information during the hiring process, you must:

  • Notify the applicant in a written document that the information gathered may be used in the decision making process.
  • Obtain written permission from the applicant or employee to conduct the background check.

2. Before taking any adverse action based on the information in the background check, the organization must give the applicant notice (including, a copy of the consumer report and a copy of the “A Summary of Your Rights under the Fair Credit Reporting Act”, provided by the reporting company).
3. When taking the adverse action, tell the applicant that your decision is based on information in the background report. The applicant must be provided with the contact information for the company that ran the check and provided with a copy of the report.
4. Inform the applicant of their right to dispute the accuracy of the report.

Much more information is available at: http://www.eeoc.gov/eeoc/publications/background_checks_employers.cfm