Posts Tagged ‘FCRA’

Background Checks – Three Questions to Consider

Thursday, April 14th, 2011

These days, most employers include background checks as a mandatory part of the hiring process, as they should.  When conducting background checks it is very important that you follow the letter of the law.  Here are three important considerations for your background checking process:

  1. Are you complying with the federal Fair Credit Reporting Act (FCRA)? A lot of companies get derailed on the word “credit” – they feel that since they are not looking at the financial record of their applicant/employee that the FCRA does not apply to them.  In reality, the FCRA actually applies to any sort of background check that is compiled by a third party, such as your background checking company.  It is almost impossible to avoid using a third party in some part of the background check.  Many companies and a lot of universities refer verification inquiries to third party companies that act as the repository, instantly bringing your background check under the purview of the FCRA.
  2. Is your decision point job related? The Equal Employment Opportunity Commission (EEOC) rules are clear—you should only hold items against your applicant that are job related.  If you are unable to show a correlation to the work your applicant needs to do, you are better off not considering the unrelated negative background check results when making your hiring decision.  In fact, the EEOC has said that you must take into accountthe nature and gravity of the offense or offenses for which the applicant was convicted; the time that has passed since the conviction and/or completion of the sentence; and the nature of the job held or sought.
  3. Should you look at financial credit reports? The answer is yes, if it is important to the job requirements of the position for which you are hiring.  Recent actions by legislators and the EEOC should make you take pause before requiring a financial credit report on all applicants.  A good litmus test (unless you are in Hawaii, Oregon, Washington and Illinois) is if the position includes any of the following characteristics:
  1. is a managerial position which involves setting the direction or control of the business;
  2. involves access to customers’, employees’ or the employer’s personal or financial information other than information customarily provided in a retail transaction;
  3. involves a fiduciary responsibility to the employer, including, but not limited to, the authority to issue payments, transfer money or enter into contracts; or
  4. provides an expense account.

CAI works closely with its Background Checking clients to ensure they are fully compliant with local and federal laws.  If you have questions about background checks, please contact Kevin von der Lippe at 919-878-9222 or 336-668-7746.

Photo Source: HaxNetwork