Background checks have become an integral part of the hiring process for most employers. The Professional Background Screeners Association (PBSA) reports that more than 94% of employers are conducting some form of background check. With this widespread use of background checks it is imperative that employers have a background screening policy to guide the implementation of their checks.

Why is a background check policy important?

A well designed, comprehensive and legally compliant background screening policy protects your business, employees and visitors to your facilities.

A well design policy will define and provide guidance regarding the parameters around which your organization’s expects your managers to operate. It is a critical component of providing governance and control. When policies and procedures are in writing, there is a greater degree of assurance that similar situations will be handled consistently. For example, when an employer decides to implement background checks it must consistently deploy them and not pick and choose the situation when they want to conduct a background check on an applicant.

In addition, your policy will define the responsibilities and accountabilities of your managers to guide them in effectively implementing the policy.

A background check policy should not only define how your company conducts background screening. It is also an effective tool that documents and communicates to candidates and employees your background screening process; how often background checks are conducted, and the consequences of negative information being discovered via a background check. A well-designed policy incorporates best practices and regulatory compliance updates to help you minimize hiring risk and move candidates smoothly through the background check process. It also helps your company create a better candidate and employee experience.

Also, if an applicant files a complaint against the organization about their background checking process, one of the first items you can expect to be addressed will be your background screening policy. One way to ‘nip a complaint in the bud,’ is to prove that you have a written policy and can demonstrate you follow it consistently.

What should be included in a background screening policy? Or reviewed in a current policy?

Given that state and local level background checking legislation can vary widely as well as new federal laws, the client’s background screening process should be checked for compliance, accuracy, and formally updated on a regular basis.

1) Types of Background Checks. A background screening policy should explain the types of screening that will be conducted, from education and credentials, employment verification, identify verification, criminal history to drug screening and driver records searches. This should include which screening activities apply to specific job categories or descriptions. For example, background checks for employees who drive on your behalf will include a motor vehicle record check while this search would not be required for employees in roles that do not drive for you.

2) Screening consistency. Are you conducting the same type of screening for similar job roles? Is every new employee subject to education and employment verification as well as a drug screen, or is the policy different based on location, job type or other factors? Consistency in screening for similar roles is imperative and a legal requirement since different screening activities for different people could be perceived as discriminatory.

3) Legal Compliance. Industry regulatory changes must be taken into account, as well as federal and state laws. You should make sure that your Legal Counsel and/or your background screening provider keeps you informed about regulatory, legal, and compliance requirements that may apply to your organization. Your HR staff should make sure they are on top of legal changes.

Also, you should have your legal counsel regularly review your background screening policy for compliance. Regulations and cases regarding background checks are evolving and changing on a regular basis so we recommend that you review your policy every six months to ensure you are in compliance. I know it is likely that this review time frame is shorter than your practice for reviewing your HR policies, however, you should remember that there is continuous flow of FCRA lawsuits of which most are driven by not being in compliance with a regulation. 

4) Continuous screening. The policy serves as a guide for your managers and employees regarding the screening activities that may be conducted as well as the consequences should screening discover derogatory information. This is particularly important because continuous screening deals with employees who have a higher level of legal protection than pre-hire job applicants. For an in depth discussion of how to implement and handle continuous screening download ‘A Guide for Employers to Implement a Continuous Screening Program at https://preemploymentdirectory.com/continuous-screening-resource-center/  

5) Disclosures and authorizations. An employer’s background check policy should include Fair Credit Reporting Act (FCRA)-compliant disclosures and authorizations language. Non-compliant disclosure and authorization forms can result in significant fines and potential lawsuits. Additionally, under the FCRA notification is required prior to taking an adverse employment, retention, or promotion action. This must be included in your policy.

A newer practice that has emerged that may help reduce potential adverse employment action complaints is to provide an advance copy of the background screening report to candidates. This approach will help to verify identity and provide the chance for the candidate to point out any discrepancies that may need to be re-investigated before it is reported to you.

As an extra layer of compliance, it is recommended that you consider including language in your policy to support adherence to anti-discrimination laws and the FCRA:

Consider using language like this:

We will apply the same standards to all applicants, internal and external, for all protected classes and characteristics as defined by law.

We will get an applicant’s or employee’s written permission to conduct a background check on a standalone document. If you want authorization from an applicant to allow you to get background reports throughout the person’s employment a.k.a. continuous screening, make sure this is clearly and conspicuously stated. Please note that many labor attorneys and screening experts suggest that this post employment right to conduct a background check should be on a separate document. Consult with your legal counsel to get guidance on the best approach to get authorization for this process for your organization.

Advise all applicants when you plan to ask their previous employer to provide information above and beyond dates of employment, salary (where allowed by law), nature of the job the person performed because this could be deemed an investigative report. In this case, you must also tell applicants of his or her right to a description of the nature and scope of the investigation.

The EEOC has extensive guidance regarding the use of arrest and conviction records in the hiring decision. Consider citing this guidance in your policy.

Before taking adverse action, as an organization, we will consider:

1. The nature and gravity of the offense or conduct,
2. The time that has passed since the offense, conduct and/or completion of the sentence,
3. The nature of the job held or sought.¹

After this assessment process, if you decide to take adverse action based on background information obtained through a consumer report before you act, you must do the following according to the FCRA:

1. “Give the applicant notice that adverse action is being considered based on information found in their background check, including a copy of the consumer report that was used to make a decision.
2. A copy of “A Summary of Your Rights Under the Fair Credit Reporting Act,” which you should have received from the company that sold you the report.

By giving the person the notice in advance of taking adverse action, the person has an opportunity to review the report and explain any negative information or dispute incorrect information. Not only is this fair, but it’s the law.

After you take an adverse employment action, the employer must tell the applicant that he or she was not selected because of information in the report and provide the following information:

1. The name, address, and phone number of the company that sold the report.
2. That the company selling the report didn’t make the hiring decision, and can’t give specific reasons for it; and
3. That he or she has a right to dispute the accuracy or completeness of the report, and to get an additional free report from the reporting company within 60 days.”²

You may also want to consider including the following information in your policy:

• The function or department that is responsible for overseeing the process.
• Affirm that the organization is committed to keeping applicant and employee information confidential.
• Information regarding the retention and disposal of information in your policy.

The EEOC requires all employment records you make or keep (including all application forms, regardless of whether the applicant was hired, and other records related to hiring) must be preserved for one year after the records were made, or after a personnel action was taken, whichever comes later. (The EEOC extends this requirement to two years for educational institutions and for state and local governments. The Department of Labor also extends this requirement to two years for federal contractors that have at least 150 employees and a government contract of at least $150,000.) If the applicant or employee files a charge of discrimination, you must maintain the records until the case is concluded.³

The Federal Trade Commission’s report, ‘Disposing of Consumer Report Information? Rule Tells How,’ provides guidance to employers regarding how to dispose of reports – and any information gathered from them in a secure manner. This may include burning, pulverizing, or shredding paper documents and disposing of electronic information so that it can’t be read or reconstructed.

Tips when developing or revieing your policy:

1. Identify any overlap with existing policies. For example, confidentiality, retention and disposal information is likely to appear in other employment related policies. Make sure your language is consistent.
2. The most effective approach for developing a policy should include using cross functional representatives, at minimum, include HR, Security, Legal and Operations.  
3. Be very conscious of using words that reduce subjectivity and are subject to interpretation with the goal of minimizing any misunderstanding of the intent of policy provisions.
4. Include an exceptions process with accompanying documentation requirements. All exceptions to the policy should require sign off by a senior level manager, preferably the firm’s HR VP

In the final analysis the background checking process is a gatekeeping process that is designed to protect an employer from making ‘bad hires’ and to improve the likelihood of hiring the right person for a job.

The renowned Red Auerbach, one of the winningest coaches in the NBA is credited with saying, “If you hire the wrong person, all the fancy management techniques in the world won’t bail you out.” Follow Red’s advice and conduct your due diligence on the front end of the hiring process. A well-designed background checking policy will help you to accomplish this.

For more information on our company and how we help process background checks visit https://nsshire.com/contact/

Bibliography

1. Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act; https://www.eeoc.gov/laws/guidance/enforcement-guidance-consideration-arrest-and-conviction-records-employment-decisions
   
2. Using Consumer Reports: What Employers Need to Know; https://www.ftc.gov/business-guidance/resources/using-consumer-reports-what-employers-need-know
   
3. EEOC Record Keeping Requirement, https://www.eeoc.gov/employers/recordkeeping-requirements#:~:text=EEOC%20Regulations%20require%20that%20employers,from%20the%20date%20of%20termination.
4. Disposing of Consumer Report Information? Rule Tells How; https://www.ftc.gov/business-guidance/resources/disposing-consumer-report-information-rule-tells-how