What Is a Legal Background Check?

By Michael Klazema on 1/15/2019

Is it legal to run a background check?

The simplest answer to this question is, yes. Background checks are standard in many situations from employers screening potential hires to landlords vetting prospective tenants. However, the legality of background checks is often more complex than a simple yes or no answer.

When they are structured and conducted in accordance with relevant regulations and guidance, background checks are an effective and fair way of providing more information on an applicant. If a background check oversteps those boundaries, it becomes a violation of compliance, an invasion of privacy, and even grounds for legal action.

To understand the difference between a legal and an illegal background check, consider background checks in the context of employment. Most often, when employers run background checks, they are using them to vet potential candidates for open positions. Employers are at liberty to require a background check as a prerequisite for employment.

A person’s background can impact his or her ability to perform a job effectively, reliably, safely, or even legally. For instance, someone with a history of DUIs and license suspensions is a liability in a job role that involves drivingA registered sex offender cannot legally hold a job that involves working with kids. And for jobs in which specific educational degrees or professional licenses are required, it is part of the due diligence process for an employer to make sure that top candidates have those necessary qualifications. Background checks can reveal all this information and more.

It is important to understand that an employer’s rights to run background checks are not limitless. Job applicants and employees have rights, too. Per the Fair Credit Reporting Act (FCRA), for instance, employers must follow numerous guidelines when conducting pre-employment backgrounds or making hiring decisions based on background check findings. A compliant FCRA background check must be conducted with the full awareness of the prospective employee and with their written consent.

If the candidate is rejected based on a background check, the employer must provide a copy of the report, provide the candidate with details about the company that prepared the background check report, and give the candidate a chance to dispute the accuracy of the findings, among other requirements. Failure to adhere to FCRA compliance guidelines can lead to costly lawsuits—often class action—for employers.

The FCRA is not the only law dictating what employers can or cannot do with background checks. Numerous parts of the country have ban the box legislation, which mandates the removal of criminal history questions from job applications and often delays the background check until after a conditional employment offer has been made.

Some jurisdictions ban the use of credit history checks in the hiring process. Rules on whether employers can consider arrest histories in hiring vary nationwide. And the Equal Employment Opportunity Commission (EEOC) recommends that employers consider every background check on a case-by-case basis, only rejecting candidates if their criminal histories are expressly relevant to the job at hand.

Before designing a background check process, employers need to be fully aware of laws, regulations, and guidance that might limit or shape their policies. Full compliance with federal, state, and local laws will ensure legal background checks and help employers avoid lawsuits and other issues. Work with today to craft a thorough and legal background check policy for your business.

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