Can Background Checks Be Shared?

By Michael Klazema on 3/12/2019

In most cases, an employer has no reason to share or disclose the results of employee background checks. However, there are situations in which an employee is working with, for, or on the premises owned by a customer or client. Staffing agencies, for instance, send their employees to work for outside organizations. Building companies hire sub-contractors to work on their job sites. Businesses and homeowners welcome technicians onto their property to handle repairs, maintenance, and installation work. In these cases, the employer that hired the employee is just one of several entities with a legitimate interest in that person’s background.

Is it appropriate, in situations such as these, for an employer to share an employee’s background check results with a customer or client?

To discuss this question in detail, let’s go back to the staffing agency example. When a temp agency makes a hire, it conducts thorough background checks to make sure that person trustworthy, safe, and qualified for the job. Say an outside company approaches the temp agency wanting to hire a temporary employee for a few months of data entry or something similar. The company will be welcoming the temp worker into its offices to work among its other employees and wants to make sure that the person doesn’t have any red flags in his or her background. The company asks the staffing agency to share the results of the employee’s original background check.

In this case, the staffing agency’s client does have a legitimate reason to want to know about the background of the employee--but this legitimate interest only takes the client so far. No employer can share an employee’s background check information with a third party unless it has written consent from that employee.

Employees have numerous rights that are protected under the Fair Credit Reporting Act, including a right to privacy. As a result, employers are not allowed to share personnel background check details, even with clients or customers.

There are two options for the client in this kind of situation. Option 1 is that the company hiring the temp worker for a short-term staffing engagement can require the employee to go through another background check. Companies with especially thorough background check policies may wish to carry out their own screenings, anyway, to fill in any gaps that may have been present in the staffing agency’s checks.

Option 2 is that the staffing agency can obtain written authorization from its employees to share background check information with clients. Employers are at their liberty to require that employees authorize the sharing of this information to be placed by the agency.

Generally, the most crucial component of background checks for employers is compliance. FCRA rules are concrete and need to be respected and followed to the letter. Respecting employee rights and privacy will not only protect your business from costly lawsuits but also boosts employee morale and protect your company’s reputation as an excellent place to work.

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