As convenient as online background screenings are, they can land you in hot water as an employer and rack up major legal costs. It’s important to know the laws governing them, including the Fair Credit Reporting Act (FCRA) and the regulations set forth by the Equal Employment Opportunity Commission (EEOC). Additionally, there is a number of antidiscrimination statutes to reckon with.
The FCRA applies to all companies that function as reporting agencies. This means every company that provides any kind of information, which can be used to yield insight into a candidate’s financial history. This law covers reports about an applicant’s lifestyle, character, personal traits, or general reputation that may be used to make an employment decision. Any such decision you make using background checks will fall under these laws.
How Common are Screenings?
Statistics show that just under 70 percent of employers use criminal history screening to check job candidates. Of these, more than 60 percent carry out checks after making an offer. Almost a third do so immediately after the job interview.
According to EEOC guidelines, employers must take a few things into account to decide whether a background check is legal and relevant. These include the type of job, the type of crime committed (where one has been), and how much time has passed since then. The FCRA mandates that applicants have to be informed a background check will be conducted and asked for their consent. Moreover, the applicant has the right to challenge the findings of a background report.
On Ban the Box Legislation
A number of states have these laws, which ban recruiters from looking at criminal records before making a job offer. Such inquiries are said to impact minorities disproportionately. This doesn’t apply to positions that require criminal history screening by law.
Data Providers vs. Reporting Agencies
It’s important to tell the difference between these before running a background check. All data providers do is sell data. They are not necessarily compliant with the FCRA.
How to Stay Safe
To ensure compliance, employers can follow several best practices regardless of whether they use a background check service or a simple website or app. Apart from getting written consent from the subject and giving them an opportunity to challenge negative findings, they should exercise caution when checking social media. It’s easy to come across prejudicial information. It will be hard to convince anyone it had no impact on the decision if the company doesn’t end up hiring the person, for which it can be sued.
You might see a lot of posts from a disgruntled female applicant complaining about her old boss or from a male one who’s livid he lost custody of his child and insulting women on social media. This won’t make a good impression.
You could find your applicant is older than you believed. The company can be sued for discrimination if the plaintiff’s attorneys can prove age influenced the employment decision.
How to use Social Network Information Legally
It’s possible to glean useful information from social media legally. You might find a candidate’s social media presence shows he has great interest in the job he has applied for. You can use social media as an extension of someone’s cover letter or resume, especially if the job requires familiarity with social media. It is a conversation starter that will provide greater insight and understanding of an applicant. An applicant for a marketing position who knows how to “sell” themselves on social media will stand out among other applicants assuming all other conditions are equal.
Nobody is Immune to Liability
Finally, you need to make sure the information you obtain is relevant to the position you’re hiring for. Even corporations can have problems when they don’t follow these simple procedures. For example, Pepsi had to pay more than $3 million for using arrests to screen applicants. As a result, they denied people permanent employment if they had been arrested, even when this didn’t result in a conviction.
The Federal Trade Commission has shifted focus to this matter. They sent warning letters to some app developers, pointing out that a disclaimer doesn’t do away with liability for the use of an app.
They reached a settlement with data providers InfoTrack and Instant Checkmate. The latter was offering a service to check on a potential partner but also marketing it to employers and landlords, which would put it within the scope of the FCRA. The broker had no procedure to make sure the people using its reports had a way of verifying the information or even a reason to access them.
