For many employers, background checks are an important proactive tool in hiring. Proper background checks can uncover discrepancies in how recruits or new employees describe themselves in job interviews and, in some cases, can help limit a company’s liability if something happens on the job.

Things Employers Should Consider Before Making Employee Background Checks a Company Policy

While background checks can be helpful in the hiring process, there are also some things that employers should consider before they make it company policy:

  1. Some background checks require consent. Employers can call a recruit’s former boss or check their social media channels without any formal notice. Under the Fair Credit Reporting Act, the employer needs written consent from the recruit or employee if they use a third party to conduct a background check.Under this same law, the employer has to issue an “adverse action notice” if they decide not to hire the recruit or terminate the employee based on the results of the report. The notice must include the reason for the decision and a way to contact the company that performed the background check.
  2. Background checks can be simple or in-depth. Not all employers need to conduct the same level of background check on their workers. A background check can encompass everything from a simple verification of a social security number to avoid fraud, all the way to a deep dive into someone’s credit history and criminal background. Employers should consider what types of information are pertinent to the job before deciding on the background check.If an employee will be driving on the job, a peek into his or her driving records is probably a good idea. If the employee will be handling money, checking for embezzlement or theft charges makes sense. Extensive background checks for no reason can be expensive and can pry unnecessarily into someone’s life.
  3. Some information is off-limits. Not all the information that’s likely to be gleaned from a background check can be used in making a hiring decision. Federal laws explicitly ban discrimination based on race, color, national origin, sex, religion, disability, age, or genetic information, which includes medical history. While conducting a job search, employers will likely obtain much of this information, but if it influences the hiring decision, then the employer is open to a lawsuit.
  4. Background checks must be equal. Employers cannot determine which employees should receive background checks, based on the categories mentioned above. For example, it would be illegal if an employer only asked applicants of a certain race to get a background check and not others.
  5. Check your state laws. Some states have laws that go beyond the federal rules on background checks. Some states limit how far back an employer can check on someone’s criminal record or what they require employers to get consent for. Be sure to check local laws before contracting a company to conduct a background check.

At LBMC Employment Partners, we specialize in helping our clients be proactive in their hiring decisions. To learn more about how LBMC EP can help your company, contact us today.