Performing Background Checks
Many businesses are required by law to check the backgrounds of employees, potential employees, independent contractors, and volunteers. These include businesses or positions within a business that work with children, the elderly, the physically or mentally disabled, bank employees, alcohol permit holders, truck drivers, and others. Other businesses may choose to perform some type of background check to be certain applicants have accurately reported information on their application or resume and don’t have issues that may negatively affect their job performance, such as an alcohol or drug problem. A current employee’s background may be checked before offering a promotion or a move to a more sensitive position. Individuals who may be granted a security clearance are subject to even more scrutiny. Care must be taken to avoid discrimination in any way when performing or securing a background check.
Pre-employment checks – At minimum, a pre-employment background check should include verification of references, past employment, Social Security number and education as reported on a resume or employment application. It may also include fingerprinting, checking the applicant’s driving record and/or past alcohol or drug use and/or past criminal history. If your business works with children or vulnerable adults, you may need to check the state sex offender registry.
Privacy issues – Employers have limited rights when investigating an employee or potential employee’s background and personal life beyond what is included in an application or resume. Before performing a background check you must obtain permission in writing. The request cannot be contained in an employment application or contract. It must be a separate, clearly stated request containing a statement indicating that information obtained may influence hiring or promotion decisions.
The federal Fair Credit Reporting Act (FCRA), administered by the FTC (Federal Trade Commission), sets national standards for background checks, which are considered a form of consumer report. The Act covers information that can and cannot be collected about a person’s “character, general reputation, personal characteristics, and mode of living.” The Act also limits access to information contained in a background check to certain key individuals within a company. Some professions, such as law enforcement, may be exempt from FCRA requirements if they have their own documented procedures.
For an employment background check to qualify as a “consumer report” under the FCRA, it must be prepared by an outside agency, not by your business. Internet sites that search public records and sell the results are considered outside agencies and are therefore subject to the FCRA. For more information, see Employment Background Checks.
Polygraph (lie detector) tests cannot be used as part of an employee or potential employee screening process. See Employee Polygraph Protection Act on the U.S. Department of Labor’s website.
If the background check reveals information that might negatively affect hiring or promotion, the applicant or employee has the right to verify the accuracy of the information.
Credit checks – Employees and potential employees have a right to privacy in credit checks. Written consent is required before initiating a credit check. If you perform a credit check, the three major credit reporting agencies (Experian, TransUnion, and Equifax) will provide a modified version of a standard credit report called an “employment report.” An employment report includes information about an applicant or employee’s payment history and other credit habits from which employers might draw conclusions. When background checks and/or credit reports are used to make employment decisions, including hiring, retention, promotion or reassignment, the employer must comply with the Fair Credit Reporting Act (FCRA).
Bankruptcies, which are public records, may not be used as a reason to discriminate against someone, either in hiring or promotion. A bankruptcy cannot be considered at all after 10 years. Civil suits or judgments cannot be considered after seven years.
Medical information – Medical records are private and cannot be requested or checked. According to the Americans with Disabilities Act, employers may inquire only about an applicant’s ability to perform specific job duties, either with or without reasonable accommodation. Workers compensation claims, which are public records, can be consulted only to determine whether a past injury may affect an employee’s current ability to perform required duties, such as lifting.
Genetic information related to a family predisposition to an illness or condition is protected by Title II of the Genetic Information Nondiscrimination Act of 2008.
Military records – Military service records may be released only in limited circumstances, and consent is generally required.
College/high school transcripts – Consent is required to obtain these records, which are covered by the Family Educational Rights and Privacy Act.
Criminal Records – Employers may not be able to reject potential employees solely on a past criminal record. Doing so may violate Title VII of the Civil Rights Act. For information, see EEOC Enforcement Guidance. Records of crimes for which a person has been convicted (not just accused) are public record. Arrests cannot be included in a background check after seven years, but convictions may be reported indefinitely. See the Fair Credit Reporting Act for details.
Businesses that hire ex-offenders may be eligible for the Federal Bonding Program which protects businesses who hire ex-offenders against employee dishonesty. See Idaho Department of Labor Federal Bonding Program for details.
Social Media Use – It is legal to check an employee or potential employee’s social media use. Should questions arise, such as finding frequent photos of the person under the influence, further investigation may be needed to determine whether a problem exists that may affect employment.
Volunteers – If your business, church, school, sports league, or non-profit organization uses volunteers who come in contact with children or vulnerable adults, they may be required to be fingerprinted and/or undergo a criminal background check. This includes church volunteers, sports coaches, volunteer teachers/aides and more.
Independent Contractors – The backgrounds of independent contractors may be checked. The same restrictions apply as if the person was an employee.
Performing a Background Check – Not all businesses have the expertise or the time to perform a thorough background check and may therefore choose to use the services of a company specializing in background investigations. Be certain the company you choose has a record for accuracy. (This is a particular problem with online companies.) If you want to begin the process yourself, helpful information can be found on the Idaho State Police website. ISP performs criminal background checks in five northwestern states. To make a nationwide check, visit the FBI website. The employee or potential employee, not the employer, must submit the request for an FBI background report.
TransUnion, the credit reporting agency, has created a website, ShareAble, where small businesses (30 or fewer employees) can check an applicant’s background in minutes, including credit, identity and criminal background checks.
Disposal of Background Check Information – The Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) set the requirements for the length of time employee records, applications and background checks must be retained and how to properly dispose of old records. See “Disposing of Consumer Report Information? Rule Tells How” on the FTC website.
For more information about performing background checks, visit the Equal Employment Opportunity Commission (EEOC) website.