Conducting background checks has become a routine practice in the hiring process for many employers. However, it isn't as straightforward as it seems, as there are legal implications involved. Several laws regulate how employers can perform background checks, and failure to abide by those laws can lead to legal consequences.
In this article, we'll discuss the legal implications of conducting background checks, including the laws involved and the repercussions of violating them. Additionally, we'll provide best practices for how employers can stay compliant with the applicable laws and protect themselves from legal trouble.
Laws Governing Background Checks
Several laws regulate the employment background check process in the United States. These laws are in place to safeguard employees' rights to privacy and ensure that employers do not discriminate against job seekers based on their background.
Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against job applicants and employees on the basis of race, color, religion, sex, or national origin. The Americans with Disabilities Act (ADA) prevents discrimination against individuals with disabilities in employment. The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing these laws.
The Fair Credit Reporting Act (FCRA) also regulates background checks. The law states that employers need written authorization from job candidates before performing a background check. They must inform the job applicant of their right to obtain a copy of the report and dispute any inaccurate information in it. Employers must also inform the applicant that adverse employment action can be taken based on the information on the report.
In addition to these federal laws, each state has its own laws governing background checks. Employers must be familiar with both federal and state laws to ensure compliance when performing background checks.
Consequences of Violating Background Check Laws
Employers who fail to comply with the laws governing background checks may be subject to legal consequences. The EEOC can investigate and file discrimination charges against employers who engage in discriminatory hiring practices. Employers can also face legal action from job applicants or employees whose rights are violated.
The FCRA provides for statutory damages of up to $1,000 per violation, as well as damages for any actual harm suffered by the job applicant. Employers may also face other penalties, such as fines or injunctions, for violating FCRA provisions.
A recent example of the consequences of violating background check laws is the case of Target Corporation. In 2018, Target paid $3.7 million to settle litigation with the EEOC after claims of bias in their hiring practices using criminal background checks.
Best Practices for Background Checks
To avoid legal trouble when conducting background checks, employers should follow best practices. Here are some guidelines:
1. Get consent in writing: Employers must obtain a job applicant's written consent before performing a background check. The consent form should be clearly written, identifying the nature and scope of the background check.
2. Conduct only relevant checks: Employers should only perform background checks that are relevant to the position being filled. For instance, there's no need to conduct a credit check for a job that doesn't involve financial responsibilities.
3. Use a reputable screening agency: Employers should use reputable screening agencies that comply with applicable laws, including the FCRA. The screening agency should also seek to verify the accuracy and completeness of the information it provides.
4. Give applicants an opportunity to dispute incorrect information: If an employer rejects a job candidate based on a background check report, the candidate must be given an opportunity to dispute any incorrect information in the report. In addition, the employer must inform the candidate of their right to see the report.
5. Do not use arrest records: Employers cannot use arrest records for employment decisions. They must only consider convictions.
Conclusion
Conducting background checks is an essential part of the hiring process, but it also comes with legal implications. Complying with applicable laws and regulations is crucial to avoid legal troubles. Employers should follow best practices, such as obtaining written consent, conducting relevant checks, and using reputable screening agencies. By being mindful of these legal considerations, employers can stay compliant, protect their hiring process from discrimination, and avoid legal penalties.
